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India’s Nuclear Trade — Inching Forward?*

posted Feb 1, 2015, 6:43 PM by Administrator NLA   [ updated Apr 14, 2015, 8:17 PM ]

Els Reynaers Kini**

* Chapter 6, "Key Developments in Environmental Law 2014",


India elected a new government in May 2014, and it is too early yet to observe any major policy changes in the energy sector, or to predict precisely how it will resolve the current reluctance by suppliers to sign contracts with the Indian operator.[1] Some of the modalities currently being reviewed to cut this Gordian knot will be touched upon in this paper.

Much has already been written about the Civil Liability for Nuclear Damage Act, 2010 (CLND Act) and CLND Rules, 2011,[2] and its possible interpretation.[3] There are also seems to be an increasing interest in trying to better understand how courts in India would hypothetically interpret the CLNDAct and its Rules. Therefore, we will first provide an overview of the role the central Supreme Court and the State-level High Courts have carved out for themselves and what type of judicial decision-making typifies them, and in which instances judges tend to adopt a “social engineering” role. With this aim in mind, we will highlight the patterns in environmental case law which can be discerned, and will offer some pointers in how technical (nuclear) legal disputes could be approached by the Indian courts, particularly in the absence of any apparent void or failure on the part of the executive branch and in a sphere where a clear (nuclear) policy has been laid down by the government.

There are not that many cases directly relating to the nuclear energy sector, but the 2013 Judgment of the Supreme Court pertaining to the commissioning of the Kudankulam Nuclear Power Plant (KK Judgment),[4] clearly falls under the case law where the interest of the public at large and the larger benefit to society in terms of electricity generation is given greater weight than the individual or more local “right to life” concerns of people. The KK Judgment in this sense confirms the discernable pattern in the Supreme Court case law when it addresses large public infrastructure projects, as will be illustrated in the first part of this paper. In the second part, we will touch upon the importance which a Supreme Court would attach to parliamentary debates as “external aids” while interpreting laws, as was borne out in a recent high-stake case pertaining to India’s patent laws. In this context, detailed account is given of some of the crucial exchanges that took place in Parliament while adopting the CLND Act. Given that these debates could very well be relied upon when interpreting the CLND Act, sufficient attention is paid to the intent which can be distilled from these debates, which predominantly revolved around the right of recourse provision. This also leads us to more closely assess the contemporary relevance of the right of recourse provision, as well as the flexibility offered under the CSC Annex to contracting parties.

 As mentioned, in the last part of this paper, we will touch upon the possible options currently being reviewed by the newly elected government to activate its nuclear trade and propel its long-term nuclear energy ambitions. Some of these long-term energy security policies in which nuclear energy has a role to play, are increasingly being attached to domestic policies to combat climate change as well. This macro perspective is all the more relevant as these developments in 2014 may well be played out in a more significant manner during the COP 21 of the UNFCCC to be held in December 2015, where a more meaningful binding agreement is expected to be concluded between all contracting parties, and where the twain may very well meet.[5]

** Partner, M.V. Kini&Co., India, and General Secretary Nuclear Law Association (NLA), India