N-plant Mishap Victims Can't Sue Suppliers in Foreign Court

The External Affairs Ministry released information in the form of 19 FAQs, which could be used by operators and suppliers as a guide.

Published: 09th February 2015 06:00 AM  |   Last Updated: 09th February 2015 07:49 AM   |  A+A-


NEW DELHI: Two weeks after Prime Minister Narendra Modi and US President Barack Obama stood side-by-side to announce the N-deal breakthrough, the Ministry of External Affairs on Sunday released details of the “understanding”, which asserts that Right to Recourse by operators is not a mandatory provision in a contract, and that suppliers can’t be sued for claims under other acts and neither can they be dragged to foreign courts by victims.

As reported by Express first, the External Affairs Ministry released information in the form of 19 Frequently Asked Questions (FAQs), which could be used by operators and suppliers as a guide to draw up contracts and finally kick-start the process of setting up nuclear power plants by US firms.

N-plant.JPGThe information in the FAQs is gleaned from the memorandum that India has given to the US, which enshrines the “understanding” reached following three rounds of meetings of the India-US Contact Group in New Delhi, Vienna and London in December and January.

The FAQs and the memorandum are not legal documents. If the courts are brought in to adjudicate on a claim, they will be only parsing the contract.

The MEA’s FAQs makes it clear that Right to Recourse in section 17 of the 2010 Civil Liability for Nuclear Damage (CLND) Act is “not a mandatory but an enabling provision”, which means that it does not necessarily have to be included in a contract. This clause was the most worrisome for both Indian and American suppliers — having been inserted after pressure from the Opposition, led by the BJP, under the shadow of the Bhopal gas tragedy.

Of course, it is the BJP-led NDA government which is now trying to interpret the CLND Act in such a way that it removes roadblocks in the flow of nuclear commerce — stalled all these years due to this piece of legislation. The Budget session starting from February 23 is expected to see the Opposition, especially the Left, embarrass the government on this issue over the interpretation of the Act.

Incidentally, the FAQs assert that the US also sees the Act as largely in line with the IAEA Convention for Supplementary Convention for Nuclear Damage, which India has signed but not ratified. However, this clarification on section 17 may not mean much on the ground, as the state-run Nuclear Power Corporation India Limited is the sole operator as per the Atomic Energy Act.

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