Civil nuclear energy carries inherent risks despite high safety standards. A nuclear accident can cause large-scale loss of life, environmental damage, and long-term health consequences. To ensure quick and adequate compensation to victims and to create legal clarity for nuclear operations, countries adopt special nuclear liability laws.

In India, the Civil Liability for Nuclear Damage Act, 2010 provides the legal framework governing liability and compensation in case of a nuclear incident. The Act became particularly significant after India entered into international civil nuclear cooperation agreements and sought to expand its nuclear energy capacity.

Background and Need for the Act

Before 2010, India lacked a comprehensive domestic law dealing with civil liability for nuclear damage. The need for such a law arose due to multiple factors:

• India’s civil nuclear cooperation agreements, especially after the 2008 India–US Nuclear Deal
• The requirement to reassure citizens about compensation in case of nuclear accidents
• The need to align with international nuclear liability principles
• Expansion of nuclear power as part of India’s clean energy and energy security strategy

The Act was enacted to balance public safety, victim protection, and investor confidence.

Enactment and Legal Status

• The Civil Liability for Nuclear Damage Act was enacted by Parliament in 2010
• It provides statutory backing to India’s nuclear liability regime
• It governs liability arising from nuclear incidents involving nuclear installations or nuclear material under Indian jurisdiction

Objectives of the CLNDA

The Act aims to:

• Ensure prompt and adequate compensation to victims of nuclear accidents
• Clearly fix responsibility and financial liability for nuclear damage
• Create a predictable legal framework for nuclear energy development
• Establish institutions for claims settlement and dispute resolution

International Context and Legal Basis

The Act is broadly aligned with global nuclear liability principles reflected in international conventions such as:

• Vienna Convention on Civil Liability for Nuclear Damage
• Paris Convention on Nuclear Liability
• Brussels Supplementary Convention

These conventions emphasize victim-centric compensation, strict liability, and channeling of liability to operators to avoid prolonged litigation.

Core Principles of the Act

The Act incorporates the following fundamental principles:

• Strict liability: The operator is liable even without proof of negligence
• No-fault liability: Victims do not need to establish fault to claim compensation
• Channeling of liability: Primary responsibility rests with the operator of the nuclear installation

These principles are intended to simplify compensation and protect affected individuals.

Liability Structure under CLNDA

Operator’s Liability

• The operator of a nuclear installation bears primary liability
• Liability is capped at ₹1,500 crore
• The operator must maintain insurance or other financial security to cover this amount

Government Liability

• If compensation claims exceed the operator’s liability limit, the Government of India steps in
• Government liability is capped at the rupee equivalent of 300 million Special Drawing Rights
• This amounts to approximately ₹2,100–₹2,300 crore depending on exchange rates

Supplier Liability and Right of Recourse

A distinctive feature of the Indian law is the provision allowing operator’s right of recourse against suppliers.

• The operator may seek compensation from suppliers in cases of defective equipment or services
• This deviates from global practice where suppliers are usually insulated from liability
• This provision has raised concerns among foreign nuclear suppliers

This aspect has been a major reason behind delays in foreign nuclear power projects in India.

Compensation Mechanism

The Act provides a structured mechanism for compensation:

• Covers death, personal injury, property damage, and environmental harm
• Prescribes time limits for filing claims
• Ensures centralized and streamlined claims processing

This mechanism prioritizes speed and fairness in compensation delivery.

Institutional Framework

The Act establishes and empowers key institutions:

• Atomic Energy Regulatory Board (AERB)
  
  • Responsible for reporting nuclear incidents within a stipulated timeframe
• Nuclear Damage Claims Commission
  
  • Adjudicates claims related to nuclear damage
  • Ensures equitable compensation
  • Resolves disputes related to liability and compensation

Challenges and Criticisms

Despite its victim-centric approach, the Act has faced criticism:

• Supplier liability provisions deter foreign investment
• Liability caps are considered misaligned with international standards
• Insurance availability and costs remain a challenge
• Several nuclear power projects with foreign collaboration remain stalled