India, US one step closer to ending N-deal logjam

A meeting of Indian and US officials in London on Wednesday is said to have made “significant progress” in removing the roadblocks for a bilateral civil nuclear cooperation agreement between the two countries.

The latest meeting was the third of the India-US contact group on civil nuclear cooperation and saw discussions on a possible way to break the liability logjam and implement the landmark deal inked in 2008.

Implementation of the deal has been riddled with contentious issues as US nuclear companies have expressed concern over certain clauses of India’s Civil Liability for Nuclear Damage (CLND) Act 2010, particularly over Clause 17(b). 

Sources told Deccan Herald, however, that New Delhi’s fresh proposals to address these concerns were by and large accepted by US representatives with certain mutually accepted modifications.

This particular clause allows operators of a nuclear plant to claim damages from suppliers in case a mishap occurs due to a “patent or latent defect” in the equipment supplied or sub-standard services. 

US companies have been arguing that the provision of the particular section of the legislation is contrary to the global norm, where all liability is channeled to the operator. 

The Indian government later in 2011 brought in rule 24 while framing rules for the CLND Act, thus limiting liability in terms of amount to Rs 1500 crore or value of contract, whichever is lower, or time—five years or product liability period—whichever is longer. But US companies were still not convinced. 

Sources said that Washington had now in principle accepted New Delhi’s modified proposal for creating an insurance pool led by General Insurance Corporation of India with links to other international pools to cover the liability of US suppliers. But US apprehensions over other clauses of the CLND Act, including 46, have not been resolved and are likely to be by Prime Minister Narendra Modi and American President Barack Obama in New Delhi next Sunday.

The US Government and the nuclear industry have continued to insist that this particular section of the legislation be amended as it does not protect suppliers from other civil claims, making their liability potentially unlimited. 

Meanwhile, New Delhi, while ratifying the international deal it signed in 2010, may record a note of reservation to Article 10 of the annex to the Convention on Supplementary Compensation (CSC). The note may seek to end contradiction between the CSC and the Section 17 (B) of the CLND Act.

The contact group on civil nuclear cooperation was set up when Modi visited Washington and met Obama in White House on September 30 last. The group earlier met in New Delhi and Vienna over the past two months.