CII seeks clarity on nuclear liability law

New Delhi: Amid apprehensions among foreign companies over the nuclear liability law, the CII today sought clarity on certain sections, particularly those relating to the operator`s right to seek compensation from suppliers in case of an accident, to make the measure "more effective".

The industry body said three clauses under a section of the Civil Liability for Nuclear Damage Act that deals with the operator`s right to recourse were mutually exclusive and could lead to overlap on claims arising out of supply of defective equipment.

It also wanted the Act to be consistent with the Convention on Supplementary Compensation (CSC), a demand made by some foreign countries with whom India has signed civil nuclear cooperation agreements.

"There is no clarity on whether the limits can also be extended to claims by an Operator under clauses 17 (b) and 17 (c)," the CII said in a statement here.

As per Section 17 of the Act, an operator can seek compensation from supplier of equipment to a nuclear plant if the right is expressly provided in the contract; if the accident has occurred due to the act of a supplier or his employee, including due to supply of defective material or sub -standard services; and due to act of commission or omission of an individual with an intent to cause damage.

"As a result, there could still be a degree of overlap on claims arising out of supply of equipment or material with patent or latent defects or substandard services especially since it is open to interpretation that the causes of action under all the three clauses of section 17 are mutually exclusive," the CII said.

The industry body said it was critical that the Rules or an amendment to the Act expressly set out the legislative intent that the total limit of supplier`s liability under laws and contractual conditions will be as expressly provided in the contract.

The CII pointed out that the Act uphold the right to fix criminal liability and raise tort claims in case of a nuclear accident. "Clarification is required to ensure that this provision does not alter the exclusive channelling of any claims for nuclear damage on a strict liability basis only to the Operator, who owns the plant," it said.

The CII also pitched for developing specific customised insurance solutions for suppliers as insurance providers in the country do not offer any policy to cover risks involved in nuclear power plants.

"A balanced legislation will send out the right signals to investors/suppliers and will expedite the progress of the country`s nuclear power program," it said.