Civil Liability for Nuclear Damage Act

Background and evolution

After the India–US civil nuclear agreement of 2008 and the waiver from the Nuclear Suppliers Group, India needed a law on liability for nuclear accidents so that foreign companies could build reactors. International conventions generally channel liability to the operator and protect suppliers, to keep the industry insurable. But in India the memory of the Bhopal gas disaster of 1984, where victims received limited compensation and the foreign parent company largely escaped liability, shaped public opinion.

Parliament passed the Civil Liability for Nuclear Damage Act in 2010 after intense debate. It followed the operator-liability model but added a provision allowing the operator to seek recourse from suppliers if an accident results from defective equipment or services. This made India's law different from international norms and became the main reason why foreign suppliers hesitated to sign contracts.

Key features and provisions

• No-fault liability: the operator is liable for damage regardless of fault, with limited exceptions such as grave natural disasters or armed conflict.
• Liability cap: the operator's liability is limited to ₹1,500 crore per incident; beyond that, the Union government is liable up to the rupee equivalent of 300 million Special Drawing Rights, with more available under international arrangements.
• Operator: currently the Nuclear Power Corporation of India Limited (NPCIL), a public sector company.
• Right of recourse: under Section 17, the operator can recover compensation from suppliers if the contract provides for it, or if the accident results from latent or patent defects in equipment or services, or from wilful acts.
• Claims: a Claims Commissioner and, for serious accidents, a Nuclear Damage Claims Commission decide compensation.
• Other laws: Section 46 states that the Act is in addition to other laws, raising concerns that suppliers could also be sued under tort law.