Fog hangs over nuclear 'breakthrough'

Experts not sure if a memorandum of law can supersede statute

U.S. nuclear suppliers have neither been informed of the details of the “breakthrough understanding” achieved in the India-U.S. civil nuclear agreement nor has a date been set to brief them on how the publicly funded insurance pool will satisfy the vendors on their concerns over Section 46 of the Indian Civil Liability for Nuclear Damage Act.

Experts close to the discussions, who spoke to The Hindu on condition of anonymity, said that even if the $244 million proposed for the pool were to be used to indemnify suppliers against claims under Section 17(b) of the liability law, they “don’t see how a memorandum of law could supersede the statute.”

In prior remarks, U.S. Ambassador to India Richard Verma was quoted as saying that the breakthrough understanding achieved during discussions between President Barack Obama and Prime Minister Narendra Modi in New Delhi over the weekend could operate “through a memorandum of law within the Indian system.”

This would be a necessary step to give U.S. nuclear suppliers confidence that, firstly, the insurance pool would help them meet the obligations, implied by Section 17(b) in the event of a nuclear accident, of “strict, no-fault liability” and victims’ right to recover damages from the supplier if the accident was caused by defective equipment or services.

Second, with Indian officials firmly backing away from any suggestion that the language of the liability law could be changed to accommodate U.S. nuclear suppliers’ concerns, experts noted that an effort to “read down” the meaning of Section 46, which gives victims the right to tort remedies regardless of whether they received compensation under no-fault liability, may be required.

However, doubt still hangs over the question of whether, at some point in time, any assurances given by the Indian side to U.S. suppliers in the near term would have to be followed up with a “legislative undertaking,” as Mr. Verma mentioned.

Ambiguity on this matter stems from the fact that typically it is only the Indian Parliament that enacts statutes and it is either Parliament or courts that are empowered to interpret them.