Just when the government felt it had sorted out all the wrinkles in the Nuclear Liability Act, eminent jurist Soli Sorabjee has said the crucial rule restricting the liability of supplier to just five years in case of an accident is ultra vires and invalid.
Mr. Sorabjee was answering questions from international environment activist group Greenpeace on the detailed guidelines for the Nuclear Liability Act, announced on the eve of last month's Manmohan Singh-Barack Obama meeting in Bali.
The United States, France and Russia — the major equipment suppliers for India's nuclear power plants — had all protested the unlimited liability period mentioned in the Act. None has publicly commented after the detailed rules restricting the liability period under the operator's right of recourse to five years were notified.
But Mr. Sorabjee's opinion that this rule could be successfully challenged in courts is likely to lead to renewed anxiety among the three suppliers as well as the Government of India just when it thought it had addressed the concerns of the suppliers.
Asked whether the Convention on Supplementary Compensation (CSC) for Nuclear Damage was inconsistent with the Indian law, Mr. Sorabjee replied in the affirmative. This view could upset the three suppliers even further, besides the government, which insists that the Nuclear Liability Act is compatible with the CSC.
According to Mr. Sorabjee, “Article 10 of the CSC is repugnant to Section 17(b) of the Nuclear Liability Act, which would prevail over the CSC and have overriding effect even if India ratifies the CSC.”
The second question was about the rules notified by the government and whether they are repugnant to the parent act. He answered: “It is plain that the proposed Rule 24 is unduly restrictive as it limits the amount which can be claimed by exercise of the right of recourse to the extent of the operator's liability or the value of the contract, whichever is less...
“Moreover, in my opinion, Rule 24(1) is clearly inconsistent with Section 6 of the … Act, read with Section 17, in as much as it scales down and reduces the liability prescribed by the … Act. Consequently, the … proposed Rule is ultra vires the … Act and is invalid.
“Therefore, the proposed Rule 24 (2), which restricts the time limit, cannot be said to be carrying out the purpose of the … Act but is in fact in conflict with it. Therefore, in my opinion, Rule 24 (2) is clearly ultra vires of the … Act and is invalid.”