Placing the Indian civil nuclear liability regime in context: the extent of supplier’s liability

Abstract

Few legislative provisions have created as much controversy as Section 17 of the (Indian) Civil Liability for Nuclear Damage Act, 2010. This provision effectually creates supplier liability by providing a right of recourse for the operator of nuclear establishment. The paper explores the contours of this heated debate. The answer as to why India, in its Civil Liability for Nuclear Damage Act, 2010, has moved away from the standard international template of legal channelling of liability lies in the historical rationale for exclusive operator liability and the context in which India’s liability law was drafted. The verdict in Bhopal Gas Tragedy case and the shabby manner of dealing with the disaster necessitated a victim-centric approach. While it is necessary to balance the double insurance economic argument against tortious liability principles, the cap provisions and lack of incentives in the overall legal framework for supplier to take preventive actions tilts the balance in latter’s favour. The Act, however, is intended not only to respond to past events but also to govern future situations of nuclear incidents. Thus, a holistic and thorough discussion of related provisions of the Act assumes paramount significance. The enforcement of this legislation was subsequently followed by promulgation of Rules which have, in turn, further complicated the issue. In this paper, the author starts by outlining the basic principles underlining the international civil nuclear liability framework, with specific focus on channelling of liability and right of recourse, vis-a-vis the supplier. Having explained the broader international framework, the author then analyses the 2010 Indian Act and subsequent 2011 Rules, explaining the complications created through the same. Moreover, the author also delves into exploring how the Indian legislative framework will operate in practice. The author concludes that the Indian enactments have not been given a thorough consideration. The task shall be upon both, the Legislature and the Judiciary, to clarify this area of law that has significant implications on the industry as well as on the common public.