More than four months after Prime Minister Narendra Modi and U.S. President Barack Obama announced a “breakthrough understanding” to resolve a long-standing impasse in the bilateral civil nuclear energy agreement, forward movement has apparently ground to a standstill and neither the government nor the private sector here held out hope for a speedy resolution.
Responding to queries from The Hindu this week a State Department spokesperson said that there was “nothing new to announce on the civil nuclear deal at this time.”
Even as early as February, a top State Department official, Assistant Secretary for South and Central Asian Affairs Nisha Biswal, indicated that there may not be much more that the two governments could do to smooth the path for U.S. corporations to supply India with nuclear reactors.
Ms. Biswal said that while Washington was “still in the process of taking what [India’s latest] top-line commitments were and trading paper to be able to find the more detailed understandings,” for the U.S. resolution of this “lingering challenge” hinged on the convergence between India’s 2010 Civil Liability for Nuclear Damage Act (CLND) and the 1963 CSC.
She emphasised that with the “breakthrough understanding” reached in January, “now it will be up to the companies to assess for themselves the business case scenarios and make their own decisions based on the commercial aspects – how to move forward.”
“Nothing happening”One industry source, who spoke to The Hindu on condition of anonymity this week, noted that there was “nothing happening” since February 8, 2015, when India’s Ministry of External Affairs provided an FAQ-style “clarification” regarding Section 17 (b) and Section 46 of India’s liability law, which is seen as the primary obstacle to continued momentum in this space.
Commenting on the much-touted summit meeting between the two leaders in January and the announcement on the nuclear deal, the source said: “It depends on whom you talk to as to whether it’s a breakthrough understanding or not. Each [U.S. nuclear supplier] company makes its own decisions.”
The source added that regarding the MEA’s arguments on the interpretations of the liability law that could apply in the event of a nuclear accident, New Delhi may have “made selective use of the legislative history,” both on Section 17 (b) and 46.
For Section 17, the validity of the Indian government’s inclusion of the word “and’ inserted between clauses (a) and (b) has been questioned, effectively challenging the idea that “channelled liability” of the supplier by the nuclear operator, was possible only if the contract between the parties explicitly provided for it in writing.
The understanding on this side of the Atlantic also appears to be that no contract could hope to supersede the statute or the Constitution of India.
On Section 46, which may allow victims of a nuclear incident to sue the operator or the supplier for damages using tort law, U.S. nuclear corporations, as yet, appear to be unconvinced that the liability faced by suppliers will not be prohibitive.
The MEA in February sought to provide assurances on Section 46 citing in favour of its interpretation the fact that two amendments moved on the section in Parliament, by D. Raja and Sitaram Yechury respectively, which sought to include suppliers in this provision, were both negatived.
However not only are there doubts in the U.S. about whether these parliamentary debates were definitive on this subject, they even questioned the very legislative interpretation of the remarks made.
