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LATEST NEWS UPDATES | Govt notifies Rules: N-supplier liability to be ‘limited in time’ by Amitabh Sinha

Govt notifies Rules: N-supplier liability to be ‘limited in time’ by Amitabh Sinha

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published Published on Nov 16, 2011   modified Modified on Nov 16, 2011

The foreign suppliers of nuclear material to Indian nuclear power plants would not be held liable for accidents caused by defective or faulty equipment supplied by them if the accident takes place after a guarantee period specified by them.
 
According to the Rules of the Civil Liability for Nuclear Damages Act, which was made public today, suppliers of nuclear material would be allowed to specify a ‘product liability period’ beyond which they would not be held liable for any accident.

The operator of the nuclear power plant concerned would therefore have no ‘right of recourse’ against the suppliers after this period is over.

“The provision for right of recourse... shall be for the duration of initial licence issued under the Atomic Energy (Radiation Protection) Rules, 2004, or the product liability period, whichever is longer,” the Rules say. All licences issued under the Atomic Energy (Radiation Protection) Rules, 2004, are valid for an initial period of five years.

The Civil Liability for Nuclear Damages Act, commonly known as the Nuclear Liability Act, was passed by Parliament in August last year after much debate.

The notification of the rules paves the way for its operationalisation.

The law makes the operator of a nuclear power plant in India — so far only the government-owned Nuclear Power Corporation of India (NPCIL) and the Bhartiya Nabhikiya Vidyut Nigam Limited (BHAVINI) — solely responsible for paying compensation to the victims of a nuclear accident. After much political debate, a provision was included in the law enabling the operator to seek damages from the suppliers of equipment—mostly foreign companies—in case the accident was found to have happened because of equipment malfunction or defective material.

But the rules made public today make it clear that while the operator carries the liability for the entire lifetime of a nuclear reactor, the liability of the suppliers would be valid only for a fixed time.

A liability law was an essential pre-requisite for foreign companies to engage in nuclear commerce with India. New Delhi had been kept out of international nuclear commerce after its first nuclear test in 1974. That de-facto ban ended only after the United States signed a civil nuclear agreement with India in 2008 and the Nuclear Suppliers’ Group—a group of about 45 countries—made an exceptional waiver for India and cleared its re-entry into nuclear commerce.

Liability Rules

Nuclear Liability Act says operator of a nuclear facility solely responsible for paying compensation to victims of a nuclear accident.

Maximum financial liability of an operator is capped at Rs 1,500 crore. But this liability extends till the lifetime of the reactor.

In the event of the accident being caused by a defect or malfunctioning of an equipment, the operator has a ‘right of recourse’ against the supplier of the equipment.

Right of recourse valid till the ‘product liability period’ specified in contract between operator and supplier.

Operator’s claim against supplier cannot exceed the total compensation paid by it.


The Hindu, 17 November, 2011, http://www.indianexpress.com/news/govt-notifies-rules-nsupplier-liability-to-be-limited-in-time/877062/


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