Solutions proposed to settle civil nuclear liability issues

By Akshay Jaitly and Kartikeya Panwar, Trilegal
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In 2008, India and the US entered into the Agreement for Cooperation Concerning Peaceful Uses of Nuclear Energy. This permitted nuclear equipment manufacturers, suppliers and service providers to participate in India’s nuclear energy market despite India not being a signatory to the Treaty on the Non-Proliferation of Nuclear Weapons. However, US-based suppliers have been hesitant to go ahead because of their concerns regarding India’s Civil Liability for Nuclear Damage Act, 2010 (Nuclear Liability Act).

During US president Barack Obama’s state visit to India in January, he and Indian prime minister Narendra Modi announced that breakthroughs had been achieved on these concerns.

Current situation

Nuclear power currently accounts for less than 5% of the total electricity produced in India. To fulfil its power generation needs, India aims to greatly enhance nuclear energy production.

Akshay Jaitly
Akshay Jaitly

Private players are not permitted to operate nuclear power plants. Section 22 of India’s Atomic Energy Act, 1962, states that only the government (GoI) has the authority to generate nuclear power and to operate atomic power stations. The Nuclear Liability Act also defines an “operator” to mean the GoI or any authority or corporation established by it or a government company which has been granted a licence under the Atomic Energy Act. Private players are allowed to supply equipment, materials and services to establish and operate a nuclear power plant.

Nuclear suppliers had been sceptical about their prospects in the Indian nuclear energy market even after the US-India nuclear agreement was signed because of the absence of a legal regime governing civil liability following a nuclear incident. The Nuclear Liability Act was promulgated to bring certainty in this regard. Its aim is to provide for civil liability pursuant to nuclear incidents causing nuclear damage and compensation to the victims of nuclear damage. The act stipulates a strict, no-fault liability regime which primarily holds the operator liable.

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Akshay Jaitly is a partner at Trilegal and Kartikeya Panwar is an associate. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad.

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New Delhi

311 B, DLF South Court,

Saket, New Delhi – 110 017

India

Tel: +91 11 4163 9393

Fax: +91 11 4163 9292

Email: akshay.jaitly@trilegal.com

kartikeya.panwar@trilegal.com

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