Which Interpretational Route Will the Supreme Court of India Follow When Faced with the Contentious Civil Liability for Nuclear Damage Act, 2010?

Which Interpretational Route Will the Supreme Court of India Follow When Faced with the... Abstract The Civil Nuclear Liability for Damages Act of India enacted in 2010 has been a matter of concern to international suppliers and vendors. This is due to the perceived deviation of the law from the principle of legal channelling of liability (to the operator) which is at the heart of international nuclear liability jurisprudence. Specifically, this notion arises from allowing recourse to suppliers under outside of the circumstances mentioned in the Annex of the Convention for Complementary Compensation. Sections 17 and 46 which embody this notion are subject to different interpretations, some of them implying the compliance of the Indian regime with the international nuclear liability regime and many others equally suggest otherwise. In 2015, Government of India through a detailed Frequently Answered Questions clarified the nature and meaning of these sections. However, interestingly, there are two cases pending before Supreme Court of India contesting the constitutionality of the legislation in which these two specific provisions are also disputed. The article attempts to explain and resolve the ambiguity through a study of Supreme Court’s approach to statutory interpretation. I undertake an analysis of the reasoning given under the 2015 FAQ in the light of the disputed Sections 17 and 46 and bring out a probable prediction of Court’s interpretation of the Sections of the Act. INTRODUCTION The Indian Civil Liability for Nuclear Damage Act, 2010 (henceforth referred to as ‘the Act’) which came into force in 2011 is significant as it has bearings on how India will participate in the global nuclear commerce. In addition to being the first legislation to lay down a compensation regime for nuclear damage in India, it is in many ways the foundation for India’s integration into the global nuclear architecture after four decades of nuclear isolation. The development, control, and use of atomic energy was earlier solely governed by the Atomic Energy Act of 1962,1 but this legislation does not contain a scheme for compensation for damages arising from a nuclear incident. India is neither a signatory to the Non-Proliferation Treaty, 1968 nor a part of the Vienna and Paris Conventions which have been the traditional legal regimes for civil liability for nuclear damage.2 However, in 2010, India signed the Convention of Supplementary Compensation for Nuclear Damage, 1997 (henceforth referred to as ‘the CSC’) in order to secure greater international cooperation.3 The CSC, like the Vienna Convention and Paris Convention, channel the liability for compensation arising from damage to life and property resulting from a nuclear incident exclusively to the operator. All signatories of the CSC who are not members of the Vienna or Paris Conventions are required to enact domestic legislation which is in compliance with the Annex of the CSC; this entails enacting legislation to provide for, inter alia, legal channelling of liability to the operator.4 It was to comply with this requirement and thus secure greater international cooperation in the nuclear sector, that India had enacted the Civil Liability for Nuclear Damages Act, 2010.5 The Act has been subject to intense scrutiny both domestically and internationally. Countries which are likely to supply nuclear reactors and nuclear material to India are of the view that the Act allows suppliers of nuclear material and equipment to be held liable to compensate for damages to life and property which arise out of a nuclear incident. These concerns revolve around Sections 176 and 467 of the Act, both of which are perceived to be in breach of the internationally prevalent principles of nuclear liability, namely, ‘legal channelling’ of all liability to the operator, and restricted circumstances under which the operator has a right of recourse against the supplier. It would be interesting to see the approach the Supreme Court of India is likely to take when interpreting Sections 17(b) and 46 of the Act. Will it be a textual approach8 and rely on the plain meaning of the text or take a more purposive approach9 in ascertaining the intention of Parliament, and consequently the meaning of the Sections. Such an inquiry is necessary as there are two petitions which are currently pending before the Supreme Court of India challenging the constitutionality of the Act, based on, inter alia, Section 17 and Section 46.10 This article complements the existing discourse with respect to the compliance of the Indian civil nuclear liability regime with the CSC by examining the manner in which the Supreme Court is likely to interpret the Act. This is significant because the Supreme Court of India as the apex court will ultimately have the final say in case there is a dispute concerning the meaning of the Act. More specifically, I will look into the purposive and textual approaches of statutory interpretation and attempt to determine which of these the Court is likely to follow when interpreting the Act. As a corollary of the aforementioned inquiries, the article will test the validity of the ‘Frequently Asked Questions’ (FAQs) brought out by the Ministry of External Affairs (‘MEA’) in the light of existing judicial precedent.11 Before understanding how the Indian nuclear liability regime deals with legal channelling and the Supreme Court’s likely to interpretation of the same, it is important to understand the significance and meaning of legal channelling as a concept in nuclear liability. LEGAL CHANNELLING OF LIABILITY FOR NUCLEAR DAMAGE: AN EXCEPTION TO TORT LAW In order to understand the origins of ‘channelling’, it is important to go back to the early 1950s where (quite similar to the situation in India at present) nuclear power plants were operated exclusively by the state.12 This made suppliers and designers require ‘hold harmless’ clauses to be a part of their contract which made the state bear the full liability of any damage that resulted from a nuclear incident. These clauses did not prevent third parties (victims of a nuclear accident) from suing the suppliers or designers, rather, they ensured that any financial liability arising out of the nuclear accident would be borne by the state.13 This is known as economic channelling and was given legislative sanction by the Price-Anderson Act, 1957. In a system of economic channelling, victims are not legally precluded from suing the suppliers of nuclear material or designers of a nuclear installation.14 However, the financial burden for damage from a nuclear incident is finally borne by the operator who takes out insurance policies not only for covering third party liability, but also the liability of suppliers, designers etc.15 Thus, the suppliers and designers are indemnified by the operator.16 Legal channelling refers to the exclusive channelling of liability for the payment of damages arising from a nuclear accident to the operator, thus one is precluded from exercises remedies against the supplier or designer which would otherwise have been available under ordinary tort law.17 This is irrespective of the operator’s actual contribution to the nuclear accident, otherwise referred to as the no fault liability principle.18 Legal channelling is provided for by precluding victims from suing the suppliers and designers of a nuclear reactor and allowing them only one recourse in case of any damage arising from a nuclear incident—the operator. Despite having a compensation paradigm based on economic channelling within the country, at the end of the 1950s, US suppliers and designers lobbied to have legal channelling of liability incorporated into the international Conventions on nuclear liability.19 This push for legal channelling was with the intention to secure the interests of US suppliers and designers as they began to export nuclear raw material, technology and other expertise to Europe, whose nuclear energy sector was still in its nascent stage at that time.20 The rationale behind legal channelling can be found in the ‘Harvard Report’ which was drafted under the auspices of Harvard Law School and the Atomic Industrial Forum Inc. The Report noted that suppliers and designers often ‘lose control’ over their products and services once these have been delivered.21 Another rationale which was identified was that the insurance pool available would increase if there were fewer entities (for instance, only operators) which would be required to purchase insurance.22 Thus, since the 1950s, nuclear liability has been an exception to tort law wherein the third party would be allowed to sue for any damage caused to them even if they were not privy to the contract. Those who defend legal channelling say that it makes it easier for victims to access remedies by providing for claims to be processed through a single forum. Having a single forum would also prevent ‘forum shopping’ on the part of the victims.23 Victims would have the convenience of needing to sue only one entity on a strict (no fault) liability basis. This would considerably reduce the costs otherwise involved in instituting suits in multiple fora. There are also those who are more sceptical of legal channelling and see it as nothing short of corporate immunity.24 Persons holding this view would contend that victims are benefited to a larger extend when they can sue suppliers and designers who often have deeper pockets than the operators. Critics of legal channelling also argue that the impetus for suppliers and designers to implement safety standards and quality control will reduce when they know that they cannot be held liable for any damage that might arise despite the fact that it is linked to their design or the material supplied by them.25 It is thus hard to conclusively decide on the merits of each model of compensation, there are already some countries that seem to be moving away from legal channelling. For instance, Austria enacted a law in 1999 to abolish legal channelling.26 Austria itself has an anti-nuclear state policy and the 1999 enactment was mainly prompted by Austria’s concerns with respect to its neighbouring countries which have nuclear reactors (for instance, Slovenia, Hungary, Switzerland).27 Irrespective of the merits of the Indian nuclear compensation regime and whether or not it actually encapsulates the principles of legal channelling, it is worth exploring the controversial provisions of the Act so as to be able to predict how the Supreme Court is likely to interpret and give effect to them. TRENDS OF THE SUPREME COURT WITH RESPECT TO STATUTORY INTERPRETATION In order to understand the approach that the Supreme Court is likely to use when interpreting Sections of the Act and whether this will allow the Act to give effect to the principle of legal channelling, a brief overview of the trends of the Courts’ approach to statutory interpretation is depicted. This is done through a brief overview of the Supreme Court’s use of tools of statutory interpretation with respect to statutes that are based on or which are intended to give effect to international conventions, and the way and extent to which it uses the purposive approach to statutory interpretation. There exist several aids to interpret legislation which include the long title, marginal notes, headings, deeming provisions, punctuations, etc.28 All of these are internal aids to interpretation which help in discovering the context in which a particular provision is placed and this context must be considered when ascertaining the provision’s meaning.29 However, aids to interpretation may also be found outside the legislation in the form the statements of objects and reasons, legislative history, Parliamentary debates etc. These are known as external aids to interpretation and are used to ascertain the intention of the legislation when the meaning of a particular provisions is vague or unclear.30 The use of the external aids to interpretation in order to ascertain legislative intention and the meaning of statutory provisions is not permitted by the textual approach to interpretation, which strictly limits the interpretation of a statute to what is provided in its text. The purposive approach is more flexible and allows the courts to consider external aids to interpretation (also known as extra-statutory material) and the consequences of a particular interpretation when ascribing meaning to a provision. Thus, it may be said that the willingness of the Court to permit the use of external aids to interpretation depends on its approach to interpretation, that is whether it is inclined towards a literal approach or a purposive, more flexible approach while ascertaining the meaning of the words used in a Section of a statute. As discussed later in the article, this is of great significance when interpreting Sections of the Act since they can differ significantly when ascertained by using the purposive approach or the textual approach. WHEN IS THE USE OF EXTERNAL AIDS OF INTERPRETATION PERMISSIBLE? Though the use of external aids to interpretation is avoided when the meaning of the text is clear and unambiguous, there are instances wherein extra textual sources are used to interpret the meaning of a provisions despite there not arising ambiguity from its literal interpretation.31 For instance, the Supreme Court will presume the constitutional validity of a statute and prefer a construction that is in conformity with the provisions of the Constitution of India.32 The Court will also use international conventions and international customary law as an aid to constructing domestic laws so long as there is no inconsistency between them.33 The Court has often read Articles of the Constitution along with Articles of international conventions in order to give a more liberal construction to the former. A significant case in this regard is that of Vishaka v. State of Rajasthan which read international conventions into articles 14, 19, and 21 in the Constitution to hold that the right to work in an environment free from sexual harassment was a fundamental right.34 In the past, the Supreme Court of India had been sceptical with respect to the use of any pre-enactment history, such as the acceptance or rejection of amendments to a Bill, in order to interpret the meaning of legislation.35 In fact such a position in the case of East and West Steamship Company, George Town, Madras v. Ramalingam Chettiar36 dealt specifically with statutes having an ‘international character’. The Court had held that when dealing with statutes that seek to give effect to international conventions, the court must emphasise the grammatical meaning of the words ‘more than usual.’37 However, there has been a gradual change in this position of the Supreme Court (with respect to various types of statutes) as has been indicated by the Court’s willingness to consider the rejection of an amendment to be indicative of the intention of law makers.38 The use of other Parliamentary material, such as speeches of ministers with respect to a Bill are also initially rejected as evidence of legislative intention by the Supreme Court of India, however, the case of Pepper v. Hart39 has had the effect of changing this. It has now become common practice for the Supreme Court of India to refer to debates of the Constituent Assembly while interpreting the provisions of the constitution.40 There are also several instances where the Court has referred to the speeches of ministers with respect to a Bill to ascertain the rationale behind a particular provision or the “mischief” that it was intended to cure.41 RELEVANCE OF THE PURPOSIVE APPROACH IN INDIA In the recent (2017) case of Abhiram Singh,42 the Supreme Court had dealt with Parliamentary history as a tool of interpretation. The way in which this tool of interpretation was used in this case may be relied on since this case was decided by a constitutional bench comprising seven judges. The Court rendered its decision by a majority of 4:3, holding that Section 123(3) of the Representation of People’s Act, 1951 must not be read strictly. Briefly put, the question before the Court was whether in the phrase, ‘…appeal by a candidate… to vote or refrain from voting for any person on the ground of his religion, race, caste, community, or language (…)’, the word ‘his’ restricted the scope of the section to appeals based on the candidate’s religion alone. Though this would be the plain meaning of the section, the majority held that the section included appeals based on the elector’s religion, race, caste, community, or language as well. The majority opinions relied on an amendment to Section 123(3) made in 1961 by which its scope was expanded. They also referred to the law minister’s speech when proposing the amendment which pointed to the need to curb communal and sectarian tendencies. Importantly, the majority pointed to how there existed no Parliamentary material in the form of notes accompanying the Bill or statement of objects and reasons that indicated Parliamentary intention to restrict the scope of the Section, thus significantly basing their interpretation of the scope of the Section on legislative history and statements made while piloting the amending bill. The dissenting opinion (authored by Justice D.Y Chandrachud for himself, Justice Goel, and Justice Lalit) preferred a more literal and plain meaning construction of the provisions,43 because petitions alleging corrupt practices during an election have a quasi-criminal character.44 Interestingly, even the dissenting opinion used Parliamentary history in its interpretation of Section 123(3). The discussion of legislative history in the dissent focused on the law minister’s speech which explained the introduction of the word ‘his’.45 This is important because, despite broadly favouring different approaches to interpretation, the majority and dissenting opinions both made use of legislative history, that is external aids to interpretation. Further, this was done sans any ambiguity in the plain meaning of the statute. THE USE OF INTERNATIONAL CONVENTIONS TO INTERPRET DOMESTIC LEGISLATION Legislation which has been enacted to give effect to an international convention is normally interpreted, as far as possible, so that it are consistent with the relevant convention.46 The relevant branch of international law, and customary rules of international law which are not contrary to domestic law are also considered.47 The Court’s consideration for international convention seems be contingent on the existence of ambiguity or (at least one) reasonable alternative interpretation of the provision. In the case of V.O Tractotoexport Moscow v. Tarapore and Company,48 the Supreme Court had emphasised the need for the existence of ambiguity in order to deviate from the natural meaning of the text so as to make it consonant with an international convention. In this case, the Court interpreted the word ‘submission’ in Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 restrictively. This was despite the realisation of the Court that such an interpretation would contravene the purpose and objects of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.49 However, in another (later) case—R.M Investments and Trading Companies Private Limited v. Boeing Company50—which dealt with the word ‘commercial’ in the same Section of the same Act as V.O Tractoroexport Moscow, the Supreme Court interpreted the term more liberally despite there not being any ambiguity arising from a plain reading of the provision. In R.M Investments, the Supreme Court referred to the meaning of the word ‘commercial’ in the Model Law prepared by the United Nations Commission for International Trade Law in arriving at the liberal interpretation of the word. Though the Court maintained that the final meaning ascribed to the word must be one that can be reasonably carried by its natural and grammatical meaning, the Court held and recognised that the Act was ‘…calculated and designed to sub serve the cause of facilitating international trade and promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration…’ The use of a more purposive approach to statutory interpretation without the existence of any ambiguity is a trend which can be identified in Abhiram Singh as well. It is thus safe to say that international conventions become relevant in interpreting the provisions of an Act (even when the Act purports to give effect to the international convention) only when there are two possible alternative constructions that can reasonably be borne by the provision. In such a situation, the construction that is consonant with the international convention will be preferred.51 Though the requirement for ambiguity in order to turn to international conventions or other extra statutory material is being relaxed, there are counter currents to this trend. Examples may be made of Trutuf Safety Glass Industries v. Commissioner of Sales Tax (U.P),52State of Kerala v. P.V. Neelakandan Nair and Ors.53 (both discussed later in the paper), and the dissenting opinion in Abhiram Singh. In either case, it is very likely that the Court will resort to extra textual material in order to interpret Section 46 of the Act. The reason for this is that that there does appear to be considerable ambiguity with respect to the scope of the Section (even from a plain reading) which needs to be resolved. USING THE CSC AS AN EXTERNAL AID TO INTERPRETATION Though the Supreme Court has used international convention to interpret legislation, it has done so only when Parliament manifests an intention to comply with those conventions. The trend with respect to such legislations (which are enacted to give effect to an international convention) has been to make such an intention clear in the long title or preamble of the legislation. An example may be made of the Carriage by Air Act, 1972, the long title of which begins by stating that it is an Act ‘…to give effect to the Convention for...carriage by air signed at Warsaw of the 12th of October, 1929…’54 Other examples include the preambles of the Environment (Protection) Act, 1986, the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013, and the Arbitration and Conciliation Act, 1996, all of which explicitly referred to the relevant international convention. The Civil Liability for Nuclear Damage Act, 2010 is different from other legislations enacted with the intention to comply with international conventions. The Act received the assent of the President of India on 21st September, 2010 when India had not ratified the CSC. India went on to ratify the CSC on 27th October, 2010. One may contend that the chronology of events is a reason to believe that the Act was not meant to give effect to the provisions of the CSC or the nuclear liability regime (legal channelling) they enshrined. Such contentions do not take into account the fact that compliance of domestic laws with the Annex of the CSC is a pre-requisite to a country signing the CSC.55 Thus, unlike the case of other intentional conventions, India had to make sure that its domestic regime was in compliance with the CSC before it became a part of the Convention. The Parliament was cognizant of this requirement for becoming a member of the CSC when passing the Act, this is evident from the Act’s statement of objects and reasons.56 The statement of objects and reasons recognises the CSC as a ‘free standing instrument’ which any country may become a part of after bringing its national legislation in compliance with the Annex of the CSC.57 The statement of objects and reasons acknowledges the lack of legislation to govern nuclear liability and compensation in India, given that the nuclear industry had (before the existence of the Act) been governed only by the Indian Atomic Energy Act 1962. It concludes by stating that the Act must be enacted for the aforementioned reasons and in order to become a part of an appropriate international nuclear liability regime.58 The statement of objects and reasons and the manner in which the Act has reproduced (in verbatim) most of the Annex of the CSC in its provisions59 are strong indications that the Parliament intended to ratify the CSC. Further, the intention to ratify the CSC through the Act has been expressed by the MEA in its FAQs on the subject.60 The statement of objects and reasons are an external aid to interpretation which the Court has relied on in order to ascertain the meaning of a provision. In the case of Novartis A.G. v. Union of India,61 the Supreme Court confirmed that the statement of objects and reasons could be relied on in order to ascertain the objective of a legislation.62 Thus, the provisions of the CSC and its Annex can legitimately be an external aid to interpretation which the Supreme Court relies on while ascertaining the meaning of the provisions of the Act, especially Sections 17 and 46 which deal with supplier liability and legal channelling respectively. LEGAL CHANNELLING AND THE INDIAN NUCLEAR LIABILITY REGIME Even though legal channelling of liability is provided for in the long title in the Act, Sections 17 and 46 of the Act have raised doubts about whether the objectives set out in the long title will actually be effectuated.63 Such concerns are shared by both domestic and foreign suppliers (Reference). It is also important to note the specific position of countries like Russia, France, and the USA which had used considerable diplomatic capital to obtain an exemption for India from the Nuclear Suppliers Group (the NSG).64 This is significant given that normally, only countries that are signatories to the Non-Proliferation Treaty can trade with the NSG. The exemption allowed the Indian nuclear sector access to the NSG’s resources without being a member of the Non-Proliferation Treaty. These countries that had lobbied for India’s exemption felt let down by India’s domestic nuclear liability law.65 Within India, the concerns which surround the Act are with respect to the constitutionality of the Act which has been challenged before the Kerala High Court and the Supreme Court. There are multiple grounds on which the challenge are based, including that certain authorities which the Act creates are not autonomous enough to carry out their functions impartially; that certain provisions in the Act suffer from excessive delegation and the limit placed upon the compensation which the operator of a nuclear installation is liable to pay; and would thereby be violating the right to life under Article 21 of the Constitution of India. The Writ Petition filed before the Kerala High Court was disposed upholding the validity of the Act.66 However, as this paper is being written, there are two petitions67 before the Supreme Court challenging the validity of the Act which are awaiting their final hearing. These petitions challenge the monetary cap imposed by the Act on the liability of an operator for nuclear damage. The petitioners contend that this is in contravention to the polluter pays principle and the absolute liability principle which have been recognised by the Supreme Court of India. SECTIONS 17 AND 46: INNOVATION IN COMPLIANCE OR INTERNATIONAL NON-COMPLIANCE? Section 17 and Section 46 of the Civil Liability for Nuclear Damage Act, 2010 have been at the heart of the concerns raised by the international community as well as domestic suppliers and vendors. These Sections raise questions about whether the Act in its provisions remains true to the objective of legal channelling of liability (to the operator) that it sets out in its long title. The perception of some authors68 is that the principle of legal channelling is considerably diluted by allowing existing laws, and consequently, the remedies available to victims under them to continue to operate.69 This concern is exacerbated by allowing an operator to have recourse to a supplier(s) under conditions that deviate from what are currently acceptable conditions for recourse against the supplier under international conventions.70 International conventions provide for the right to recourse of the operator of a nuclear facility against the supplier where it is provided so in writing under a contract or where the nuclear incident was a result of any act or omission done with the intent to cause nuclear damage.71 The Indian law provides for an additional circumstance where such right of recourse may be exercised by the operator. Section 17(b) of the Act provides that the operator shall, after paying compensation to the victims, have a right to recourse against the supplier where the nuclear incident which gave rise to the operator’s liability was a result of an act of the supplier or his employee, including the supply of equipment or material having latent or patent defects or sub-standard services. Unlike clauses (a) and (c) of Section 17 (which are in consonance with international conventions), Section 17(b) neither requires that such right be provided for in a contract nor that there exists any intention with respect to the defect in the equipment or material. Section 46 of the Act provides that the Act shall be in addition to and not in derogation of any of the laws in force, and that nothing contained in the Act shall exempt the operator from any proceedings which may be instituted against him, other than under the Act itself. For the sake of discussion, this Section may be divided into two parts. The first part being the one which speaks about the Act not being in derogation of any other laws, and the second part being the one which speaks specifically about the liability of operators. Though the second part of the sentence contained in Section 46 clearly refers to the operator, the first part does not. The first part could arguably be interpreted to mean that the laws that currently allow for recourse against suppliers and which do not recognise legal channelling of liability will continue remain in force (for instance, tort law or product liability law).72 An example may be made of Section 3 of the Consumer Protection Act, 1986 which states that the Consumer Protection Act is in addition to and not in derogation to other laws. This is the same as the first proposition of Section 46. The Supreme Court has interpreted Section 3 of the Consumer Protection Act to confer a wide jurisdiction.73 Thus, the provisions of the consumer protection Act will have jurisdiction despite the fact that other forums/courts have the jurisdiction to adjudicate upon the lis.74 If laws such as product liability laws which continue to apply, there may not be legal channelling of liability towards the operator despite what may be stated in the long title. THE NEED FOR USING EXTERNAL AIDS WHEN INTERPRETING SECTIONS 17 AND 46 As already discussed, there exist internal and external aids to interpreting a statute. These may be used to interpret a statute if the text of a provision is unclear or ambiguous, then the interpreter may use the long title and the preamble to understand the object and purpose of the statute and use this to ascertain meaning from its text.75 Since the Civil Liability for Nuclear Damage Act, 2010 does not have a preamble, its object and purpose may be derived from its long title.76 The Act’s long title lays down, inter alia, the objective of providing prompt compensation to victims, and to do so through a no-fault liability regime which channels liability to the operator. Section 4 of the Act, provides that the operator shall be liable to compensate for the damage caused by a nuclear incident. From these provisions of the Act it is clear that the liability is to be channelled to the operator, however, the language of the Act does not posit that the liability must be exclusively channelled to the operator. Thus, in the present case the internal aids of interpretation have not been useful in allaying the concerns of suppliers and the international community. In fact, the inconsistency that seems to exist between the long title and the text of the Act is what creates confusion with respect to the legislation’s intention to apply legal channelling to nuclear liability.77 For these reasons, there is a need to examine interpretational aids which do not lie within the Act and take a more purposive approach to interpreting the same. APPLYING THE PURPOSIVE APPROACH TO THE INDIAN NUCLEAR LIABILITY LAW When considering the Civil Liability for Nuclear Damage Act, 2010, the Parliamentary material provides clarity on the meanings of Sections 17(b) and 46. From the preceding discussion, it can be concluded that it is highly likely that the Supreme Court would at least consider (if not rely on) extra textual sources to ascertain meaning of provisions of the Act. The inferences which may be drawn from these extra-textual sources with regard to the Indian nuclear liability law is examined below. Section 46 Section 46 contains two ‘propositions’.78 The first proposition is that the Act is in addition to and not in derogation of existing laws in force. The second proposition is that victims’ access to other recourses against the operator will remain unaffected. It may be noted that the first proposition of the Section can be found in many Indian statutes,79 however, the second proposition is specific to Section 46 of the Act. If other laws are also to remain applicable, as per the first proposition of the Section, then consumers and operators (as buyers) would have recourse against the suppliers under existing Indian laws such as the Consumer Protection Act, 1986 and the Sales of Goods Act, 1930, which collectively can be referred to as product liability laws. The second proposition of the Section refers specifically to the continuation of existing remedies with respect to the operator, what is unclear is whether the first proposition is also intended to be applied in a limited fashion, that is, only with respect to the operator, thus not allowing for the continuance of existing remedies against the supplier. Such ambiguity in the meaning of the Section increases when reading it along with the long title which stipulates channelling of liability to the operator. As discussed in an earlier section, this channelling makes the liability exclusively fall upon the operator and this would be in contravention to existing product liability laws. Thus, the first proposition of the Section raises question as to how effectively the Act might channel liability to the operator of the plant. The MEA of the Government of India has clarified through answers numbered 11 and 12 of the FAQs published on their website that Section 46 does not provide a basis for victims to bring claims against suppliers.80 In the answer numbered 12, reference is made to certain amendments that were proposed by the Standing Committee and rejected when drafting the Bill. This was interpreted as indicative of Parliament’s intention to exclude suppliers from the ambit of Section 46. The Ministry refers to two cases (each decided by a division bench of the Supreme Court)—Trutuf Safety Glass Industries v. Commissioner of Sales Tax (U.P)81 and State of Kerala v. P.V. Neelakandan Nair and Ors.82 to support its interpretation of the Section. These cases are briefly studied hereunder to understand whether the precedent set by them supports the Ministry’s approach to interpreting Section 46. For the purposes of this discussion, it is not necessary to delve in to the factual matrix of Trutuf and P.V. Neelakandan Nair further than stating that the cases deal with the interpretation of Rule 60 of the Kerala Service Rules (Part I) and Rule 62 of the Kerala Education Rules 1959, and Entry 2 of Annexure I of a notification under Section 4-B of the U.P Sales Tax Act, 1948, respectively. The MEAs was correct in identifying that these cases held that every statute is to be interpreted with in accordance with the intention of the legislature. However, all approaches to statutory interpretation would agree that a statute is to be interpreted so as to give effect to Parliament’s intention. The difference in opinion and approach is with respect to how this intention is ascertained and when it considered to interpret a Section. Textualists would maintain that the only relevant intention is that conveyed by the plain meaning of the legislation through its enactment; purposivists would allow the consideration of extra-textual material. When considering Section 46 of the Act, a plain reading of the statute’s text seems to allow for suppliers to be made liable for the damage by the operation of existing laws.83 It states that the statute will be in addition to and not in derogation of existing laws in force. It is only when one looks at the Parliamentary discussions with respect to the Bill that such an interpretation seems incorrect. However, Trutuf and P.V Neelakandan Nair seem to favour a textual approach to interpretation. In these cases, Supreme Court did not inquire into Parliamentary history or other extra textual material in order to ascertain legislative intention in these cases. In fact, the Court cautioned against making a priori judgements about intention and using these to ascertain the meaning of a statute when the plain meaning of the provisions was not ambiguous. Trutuf explicitly states that the judiciary assumes ‘…the functions of legislators when we depart from the ordinary meaning of the precise words used, merely because we see, or fancy we see, an absurdity or manifest injustice from an adherence to their literal meaning.’ Both these cases dealt with provisions which (in the opinion of the Court) were unambiguous which did not necessitate the Court to go beyond the text of the statute to ascertain their meanings. Thus, the Ministry’s decision to rely on these two cases may not lend support to its (purposive) approach for interpreting Section 46 (by using extra-statutory material). It is for the aforementioned reasons that the subsequent discussions in the paper will rely on the principles laid down in the cases like Abhiram Singh and even earlier cases like Har Sharan Verma v. Tribhuvan Narain Singh84, and not the ones cited by the Ministry with respect to Section 46. The Standing Committee’s Report on the Civil Liability for Nuclear Damage Bill, 2010 contains the background of the Bill in its preface. There, the obligation of contracting parties to contribute a certain amount to the fund established under the CSC is mentioned along with certain key features of the CSC. But the intention to comply with the CSC and the principle laid down in its Annexure through the proposed legislation has not been mentioned explicitly. Nevertheless, India has ratified the Convention on 27th October, 2010 and has also made the required deposit under the Convention on February, 2016. There were two notes of dissent attached to the Report of the Standing Committee. The basis for the second dissenting note, inter alia, was that Section 46 did not include suppliers within its ambit and the author of the second dissent found this scope was too narrow. According to this dissenting note, the position was clarified before the Standing Committee that that the scope of Section 46 was limited to judicial review as provided under Article 226 and 32 of the Constitution. The author of the second dissenting note was of the opinion that, the Clause as it stood in the Bill (and as it stands in the enactment) was limited to operators and not suppliers. The author of the second dissenting note also proposed an amendment which explicitly made suppliers and designers (along with the operator) liable under proceedings instituted outside the scope of the Bill. However, Standing Committee and Parliament rejected this amendment, and the Bill was passed by Parliament without the proposed amendments to Section 46. Such rejection of amendments has been used as a basis to ascertain what a statute means (or does not mean) by the Supreme Court.85 From the abovementioned observations of the Standing Committee Report on the Bill and the manner in which its recommendations were treated, it is quite clear that neither the Standing Committee nor the Parliament (which had access to the dissenting note of the Standing Committee) wanted to amend Section 46 so as to bring suppliers within its ambit. With respect to the first part of the Section, it seems to be clear that the intention of Parliament was to restrict the scope of ‘being in force’ to Articles 22686 and 32.87 However, for the Section to be able to carry such a meaning, the natural meaning of its words will have to be circumscribed to only include to remedies which are in force and exclude other remedies (such as those under product liability law). Section 17(b) Section 17(b) of the Act has been a matter of concern for the international community, especially among countries such as Russia, France, and the USA which have contracts to supply nuclear reactors to India (Reference). As already mentioned, the Section makes an addition to the accepted instances wherein the operator has a right to recourse against his suppliers. Sections 17(a) and 17(c) are compliant with the CSC. Section 17(b) gives the operator the right to recourse in case there is a latent or patent defect in the material or equipment supplied as a consequence of an act of the supplier or his employee, and if such defect had resulted in the nuclear incident. This removes the need for a written contract and the need for intention (on the part of the supplier) in order for the operator to avail the right of recourse. The MEAs’ FAQs gave detailed explanations to address the concerns of the international and national nuclear community.88 The Ministry stated that clause 17(b) is a clause which is normally found in most commercial contracts and that parties normally agree upon and elaborate on these clauses.89 If this is indeed the case, it is unclear how Section 17(b) of the Act is different from Section 17(a) which states that the right to recourse exists where it is provided for in a written contract. In the Standing Committee, it was suggested to amend Section 17(a) of the Bill so as to add the word ‘and’ after the end of clause (a) of Section 17.90 With the addition of the word ‘and’ after Section 17(a), a written contract would become a prerequisite to invoke clause (b) of Section 17 that would follow the word ‘and’. The proposed amendment was rejected and the word was not included at the end of Section 17(a). It is thus clear, from the reading of the Standing Committee’s Report and the manner in which its suggestion was treated, that the right of recourse available under Section 17(b) was not meant to be tied down to the criteria of recourse as (already) provided for under Section 17(a), i.e., the existence of a written contract. The Ministry also maintains that Section 17(b) is within the ambit of Article 10 of the Annexure of the CSC by stating that Article 10 does not restrict the content of the contract which is to be entered between the supplier and the operator. This is true, the scope of the contents of the contract which may be entered into between the operator and supplier is not restricted by Article 10. However, Article 10 of the Annex unequivocally restricts the circumstances under which the right to recourse may be made available to the operator against the supplier. The Article states that such right may be made available ‘only’ when in it is provided for by a contract in writing, or when the nuclear incident is a result of an act or omission done with the intention to cause nuclear damage. This interpretation arises from a plain reading of the Article and is also the interpretation as given by the US Department of State.91 It might be contended that the words of Section 17(b) can be reasonably construed to bear the meaning given to them by the MEA in their FAQs. That said, two problems arise by taking such a view. Firstly, whenever one strays away from the natural meaning of a provision, it is based on some evidence that the resulting meaning would give effect to the intent of the legislature. In the instant case, this is not so. When piloted, Section (Clause) 17(b) required ‘gross negligence’ to be proven on the part of the operator before using the right of recourse against the supplier; gross negligence is normally difficult to prove. The rationale of the Standing Committee for adding the word ‘and’ after clause (a) was that without a written contract, suppliers might escape liability under clause (b) of Clause 17 of the Bill as it existed then. The Standing Committee’s recommendation to substitute gross negligence for ‘latent or patent defect…’ was accepted but the recommendation to add ‘and’ at the end of clause (a) of Section 17 was not accepted. Thus, it cannot be said that Parliament had the intention to limit the supplier liability under Section 17(b) to a written contract. It also cannot be said that the Parliament intended that Section 17(b) merely represent a clause normally present in written contracts. The Supreme Court has held that it must avoid the rejection of words in a statute as meaningless.92 Such rejection is precisely what is required in order to give Section 17(b) the meaning that the MEA has given it. Secondly, if the plain meaning of the words of a text and the legislative intention behind enacting the same do not provide for the meaning that is arrived at, it may be stated that the Court (or the executive) must refrain from giving it such meaning. The reason being that in such a case, there is no basis for the same except the subjective perception of legislative intent by the executive or the judiciary.93 This must be avoided; the legislative intention of elected representatives is not to be substituted in a democracy. The Government of India seems to be in a catch-22 situation when interpreting Sections 17 and 46 of the Act. The Government needs to use legislative history (as it has done) to substantiate the interpretation of Section 46 as given in the FAQs. However, the same legislative history does not support the interpretation of Section 17(b) of the Act, or the opinion given in the FAQs regarding the Section’s compliance with Article 10 of the Annex of the CSC.94 It is thus clear that the objectives of the Act are not restricted to effectuating the CSC. As has been observed in the Standing Committee Report, the Act balances the objective of fulfilling international obligations with other Indian interests, this is something that the Supreme Court will consider when determining the meaning of the Act’s provisions.95 CONCLUSION This article attempted to interpret Sections 17 and 46 of the Act using the purposive method of interpretation and in the process, took aid from the same resources. The conclusions reached after this process of interpretation are somewhat different for those reached by the MEA as expressed in their FAQs. This might be because thus far, the Government has been mitigating concerns and is not in a position to impartially examine the meaning of the Sections. The real question which needs to be answered is how the Supreme Court will approach these Sections since it is the Court’s interpretation that will ultimately decide the rights and liabilities of the parties involved. Though the interpretations discussed above are in line with the general trends of the Supreme Court, the fact remains that the weightage given to interpretations using textual and purposive approaches will differ from case to case and there is no way to predict the Supreme Court’s interpretation of a statute with absolute certainty, but what is clear is that the Supreme Court is at least willing to rely on external material to interpret a statute. Thus, though the extra textual material shows that Section 46 was meant to be restricted only to judicial review under Articles 226 and 32, this does not automatically mean that the Supreme Court will interpret the Section in such a manner. That articles 226 and 32 do not need to be sanctioned by legislation in order to remain available is common knowledge. This may lead the Court to not consider an interpretation of the Section which restricts it to these Articles as it would have the effect of making the Section meaningless within the scheme of the Act.96 But until the Supreme Court has an opportunity to interpret the Act’s provisions, the Government must ensure (to the best of its ability) that the provisions’ meanings are ascertained uniformly, with some methodology in place for the same. Otherwise, the interpretation might appear to be arbitrary. But most importantly, these interpretations must be in line with precedents set by the Supreme Court. If not, any success achieved by the Government in allaying fears would only be temporary and inaccurate. Author thanks Vishakha Raj for research support, and Els Reynaers Kini and Praachi Misra for helpful comments. Footnotes 1 Department-Related Parliamentary Standing Committee on Science and Technology, Environment, and Forests, Two Hundred and Twelfth Report on ‘the Civil Liability for Nuclear Damage Bill, 2010 (Rajya Sabha 2010–2011, 212) (212th Report) 6. 2 ibid 4. 3 EM Ameye ‘United States and India: Two Nuclear States with Legislation that Truly Holds Responsible Parties Liable in Case of a Nuclear Accident’ [2014] J Risk Res 1, 10. 4 Convention on Supplementary Compensation for Nuclear Damage (adopted 12 September 1997, entered into force 15 April 2015) (CSC) art 2. 5 212th Report (n 1) 6. 6 Civil Liability for Nuclear Damage Act 2010, S. 17: “17. The operator of the nuclear installation, after paying the compensation for nuclear damage in accordance with section 6, shall have a right of recourse where- (a) such right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services; (c) the nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage.” 7 Civil Liability for Nuclear Damage Act 2010, S. 46: “46.The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator from any proceeding which might, apart from this Act, be instituted against such operator.” 8 DA Farber ‘Do Theories of Statutory Interpretation Matter-A Case Study’ [1999] 94 Northwestern University Law Review1409, 1411–1414; JT Mallot ‘The Rise and Fall of Textualism’ [2006] Columbia Law Review 106, 1. 9 K Tokeley ‘Interpretation of Legislation—Trends in Statutory Interpretation and the Judicial Process’ [2002] Victoria University of Wellington Law Review 965, 967, 33; N Lee, ‘A Purposive Approach to the Interpretation of Tax Statutes?’ [1999] Statute Law Review 20 (2), 124; SC Styles, ‘The Rule of Parliament: Statutory Interpretation after Pepper v. Hart’ [1994] Oxford Journal of Legal Studies 14, 151. 10 Special Leave Petition (C) No. 27335 of 2012 along with SLP(C) 29121 of 2012 and WP(C) 407/2012. 11 ‘Frequently Asked Questions and Answers on Civil Liability for Nuclear Damage Act 2010 and related issues’ (Ministry of External Affairs-Government of India 8 February 2015) www.mea.gov.in (12 November 2017) (Frequently Asked Questions). 12 Ameye, ‘United States and India’ (n 3) 3. 13 ibid. 14 ibid. 15 ibid 5. 16 ibid. 17 Ameye, ‘United States and India’ (n 3) 1–3. 18 EM Ameye, ‘Channelling of Nuclear Third-Party Liability Towards the Operator: Is it Sustainable in a Developing Nuclear World or is there a Need for Liability of Nuclear Architects and Engineers?’ [2010] European Energy and Environmental Law Review 33, 34. 19 Ameye, ‘United States and India’ (n 3) 3. 20 ibid. 21 ibid. 22 Ameye, ‘Channelling of Nuclear Third-Party Liability Towards the Operator’ (n 18) 39. 23 ibid 36–39. 24 Nobert Pelzer, ‘The Indian Civil Damage for Nuclear Liability Act, 2010 – Legislation with Flaws?’ [2011] 56 ATW – International Journal for Nuclear Power 1, 3. 25 Ameye, ‘United States and India’ (n 3) 9. 26 ibid. 27 ibid. 28 MN Rao and A Dhanda, N.S Bindra’s Interpretation of Statutes (10th edn, LexisNexis 2007) 685. 29 ibid 685–689. 30 Justice GP Singh, Interpretation of Statues (10th edn LexisNexis 2006). 31 Abhiram Singh v. C.D Commachen [2017] 2 SCC 629. 32 Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar [1958] Indlaw SC 34; Olga Tellis v. Bombay Municipal Corporation [1985] Indlaw SC 525. 33 Githa Hariharan v. Reserve Bank of India, [1999] 2 SCC 228. 34 Vishaka v. State of Rajasthan, [1997] AIR SC 3011. 35 Ashwini Kumar Ghose v. Arabinda Bose, [1952] AIR 369. 36 1960 Indlaw SC 465 (Supreme Court). 37 ibid [12]. 38 Justice G.P Singh (n 30) 227. See also, Express Newspapers (Pvt.) Ltd. v. Union of India, [1958] AIR SC 578. (Supreme Court); Har Sharan Verma v. Tribhuvan Narain Singh, [1971] AIR SC 1331 (Supreme Court). 39 Pepper (Inspector of Taxes) v. Hart [1992] UKHL 3. 40 S.R Choudhury v. State of Punjab [2001] 7 SCC 106 [33]. 41 Justice G.P Singh (n 30) 224–226. 42 Abhiram Singh (n 31). 43 ibid [100]–[104]. 44 The Representation of People’s Act 1951, s. 8A. 45 Abhiram Singh (n 31) [130–135]. 46 Justice GP Singh (n 30) 584. 47 ibid 572. 48 [1969] 3 SCC 562. 49 Justice GP Singh (n 30) 585. 50 [1994] AIR SC 1136. 51 Chairman Railway Board v. Chandrima Das [2000] AIR SC 988. 52 [2007] 9 SCALE 610 53 [2005] 5 SCALE 424 54 See also the long title of The Narcotic Drugs and Psychotropic Substances Act 1985. 55 CSC (n 4) art. 2. 56 212th Report (n 1) 41. 57 ibid. 58 ibid. 59 Pelzer (n 24) 6. 60 Frequently Asked Questions (n 11), refer to answers numbered 4, 5 and 6 61 2013 (6) SCC 1. 62 ibid [27–28]. 63 Pelzer (n 24) 5–6. 64 Mohit Abraham, ‘Nuclear Liability—A Key Component in the Public Policy Decision to Deploy Nuclear Energy in Southern Asia’ (American Academy of Arts and Sciences, 2014) 48 www.amacad.org/multimedia/pdfs/publications/researchpapersmonographs/nuclearLiability.pdf (15 November 2017). 65 ibid 56. 66 Yash Thomas Mannully v. Union of India W.P.C No. 27960 of 2011, decided on 21 August, 2015. 67 Special Leave Petition (C) No. 27335 of 2012 along with SLP(C) 29121 of 2012 and WP(C) 407/2012. See also, Ram Mohan M.P ‘Nuclear Liability Law of India: an appraisal of extent of recourse, right to liability and transboundary applicability’ [2014] 17 Journal of Risk Research 115, 122. 68 Ameye, ‘United States and India’ (n 3) 6; Mohit Abraham (n 64) 13; R.B Grover, ‘The Civil Liability for Nuclear Damage in India: An Engineering Perspective Regarding Supplier’s Liability’ [2017] Progress in Nuclear Energy https://www.journals.elsevier.com/progress-in-nuclear-energy (22 November 2017). 69 The Civil Liability for Nuclear Damage Act (2010) S. 46. 70 ibid s.17. 71 CSC (n 4) Art 2. 72 Pelzer (n 24) 2. 73 State of Karnataka v. Vishwabhati House Building Coop. Society and Others [2004] 1 SCC 305 74 ibid [48]. 75 MN Rao and A Dhanda (n 28) 43; Justice G.P Singh (n 30); Re: Kerala Education Bill [1958] AIR SC 956 (Supreme Court); Bishwambar Singh v. State of Orissa [1954] SCR 842 (Supreme Court). 76 Union of India v. Elphinstone Spg and Wvg Co. Ltd. & Ors. [2001] 4 SCC 139 [17]. This case held, ‘the…long title is a part of the Act itself and is admissible as an aid to its construction.’ 77 Pelzer (n 24) 3. 78 212th Report (n 1) 25. 79 Electricity Act 2003, S.175; The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Traditional Rights) Act 2006, S.13; The Assam Rifle Act 2006, S. 20 and S. 159; The Airports Economic Regulatory Authority Act 2011, s.50; The Pension Fund Regulatory and Development Authority Act 2013, S. 55; Lokpal and Lokayuktas Act 2013, S. 57; The Rights of Persons with Disabilities Act 2016, S. 96. 80 Frequently Asked Questions (n 11) 81 Trutuf Safety Glass Industries (n 52) 82 P.V Neelakandan Nair (n 53) 83 Pelzer (n 24) 5. 84 [1971] AIR SC 1331. In this case, the Supreme Court referred to an amendment which was rejected by the Constituent Assembly with respect to (draft) Article 164 in order to ascertain the meaning of that Article as enacted in the Constitution of India 1950. 85 Ibid. See also, Abhiram Singh (n 31). 86 Constitution of India 1950, art 226, 226. Power of High Courts to issue certain writs.— (1) Notwithstanding anything in article 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. 87 Constitution of India 1950, art 32, 32. Remedies for enforcement of rights conferred by this Part.— (1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed. (2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto, and certiorari, whichever may be appropriate, for the enforcement of any of the rights conferred by this Part. 88 Frequently Asked Questions (n 11), refer to answers to questions numbered 8 and 9. 89 ibid, refer to answer to question 8. 90 212th Report (n 1) 19. 91 ‘Convention on Supplemental Damage for Nuclear Damage Article by Article Analysis’ (U.S Department of State) www.state.gov (16 November 2017). 92 Trutuf Safety Glass Industries (n 52) [17]. See also, P.V Neelakandan Nair (n 53). 93 K Tokeley (n 9) 974–975; Daniel A. Farber, (n 8) 1412. See also, FH Easterbrook, ‘The Absence of Method in Purposive Interpretation’ (2017) 84 (1) The University of Chicago Law Review 81. 94 Frequently Asked Questions (n 11), refer to answer to question numbered 8. 95 212th Report (n 1) 16. 96 Trutuf Safety Glass Industries (n 52) [17]. See also, P.V. Neelakandan Nair (n 53). © The Author(s) 2018. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Statute Law Review Oxford University Press

Which Interpretational Route Will the Supreme Court of India Follow When Faced with the Contentious Civil Liability for Nuclear Damage Act, 2010?

Statute Law Review , Volume Advance Article – Apr 10, 2018

Loading next page...
 
/lp/ou_press/which-interpretational-route-will-the-supreme-court-of-india-follow-V05a2OIWUh
Publisher
Oxford University Press
Copyright
© The Author(s) 2018. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.
ISSN
0144-3593
eISSN
1464-3863
D.O.I.
10.1093/slr/hmy007
Publisher site
See Article on Publisher Site

Abstract

Abstract The Civil Nuclear Liability for Damages Act of India enacted in 2010 has been a matter of concern to international suppliers and vendors. This is due to the perceived deviation of the law from the principle of legal channelling of liability (to the operator) which is at the heart of international nuclear liability jurisprudence. Specifically, this notion arises from allowing recourse to suppliers under outside of the circumstances mentioned in the Annex of the Convention for Complementary Compensation. Sections 17 and 46 which embody this notion are subject to different interpretations, some of them implying the compliance of the Indian regime with the international nuclear liability regime and many others equally suggest otherwise. In 2015, Government of India through a detailed Frequently Answered Questions clarified the nature and meaning of these sections. However, interestingly, there are two cases pending before Supreme Court of India contesting the constitutionality of the legislation in which these two specific provisions are also disputed. The article attempts to explain and resolve the ambiguity through a study of Supreme Court’s approach to statutory interpretation. I undertake an analysis of the reasoning given under the 2015 FAQ in the light of the disputed Sections 17 and 46 and bring out a probable prediction of Court’s interpretation of the Sections of the Act. INTRODUCTION The Indian Civil Liability for Nuclear Damage Act, 2010 (henceforth referred to as ‘the Act’) which came into force in 2011 is significant as it has bearings on how India will participate in the global nuclear commerce. In addition to being the first legislation to lay down a compensation regime for nuclear damage in India, it is in many ways the foundation for India’s integration into the global nuclear architecture after four decades of nuclear isolation. The development, control, and use of atomic energy was earlier solely governed by the Atomic Energy Act of 1962,1 but this legislation does not contain a scheme for compensation for damages arising from a nuclear incident. India is neither a signatory to the Non-Proliferation Treaty, 1968 nor a part of the Vienna and Paris Conventions which have been the traditional legal regimes for civil liability for nuclear damage.2 However, in 2010, India signed the Convention of Supplementary Compensation for Nuclear Damage, 1997 (henceforth referred to as ‘the CSC’) in order to secure greater international cooperation.3 The CSC, like the Vienna Convention and Paris Convention, channel the liability for compensation arising from damage to life and property resulting from a nuclear incident exclusively to the operator. All signatories of the CSC who are not members of the Vienna or Paris Conventions are required to enact domestic legislation which is in compliance with the Annex of the CSC; this entails enacting legislation to provide for, inter alia, legal channelling of liability to the operator.4 It was to comply with this requirement and thus secure greater international cooperation in the nuclear sector, that India had enacted the Civil Liability for Nuclear Damages Act, 2010.5 The Act has been subject to intense scrutiny both domestically and internationally. Countries which are likely to supply nuclear reactors and nuclear material to India are of the view that the Act allows suppliers of nuclear material and equipment to be held liable to compensate for damages to life and property which arise out of a nuclear incident. These concerns revolve around Sections 176 and 467 of the Act, both of which are perceived to be in breach of the internationally prevalent principles of nuclear liability, namely, ‘legal channelling’ of all liability to the operator, and restricted circumstances under which the operator has a right of recourse against the supplier. It would be interesting to see the approach the Supreme Court of India is likely to take when interpreting Sections 17(b) and 46 of the Act. Will it be a textual approach8 and rely on the plain meaning of the text or take a more purposive approach9 in ascertaining the intention of Parliament, and consequently the meaning of the Sections. Such an inquiry is necessary as there are two petitions which are currently pending before the Supreme Court of India challenging the constitutionality of the Act, based on, inter alia, Section 17 and Section 46.10 This article complements the existing discourse with respect to the compliance of the Indian civil nuclear liability regime with the CSC by examining the manner in which the Supreme Court is likely to interpret the Act. This is significant because the Supreme Court of India as the apex court will ultimately have the final say in case there is a dispute concerning the meaning of the Act. More specifically, I will look into the purposive and textual approaches of statutory interpretation and attempt to determine which of these the Court is likely to follow when interpreting the Act. As a corollary of the aforementioned inquiries, the article will test the validity of the ‘Frequently Asked Questions’ (FAQs) brought out by the Ministry of External Affairs (‘MEA’) in the light of existing judicial precedent.11 Before understanding how the Indian nuclear liability regime deals with legal channelling and the Supreme Court’s likely to interpretation of the same, it is important to understand the significance and meaning of legal channelling as a concept in nuclear liability. LEGAL CHANNELLING OF LIABILITY FOR NUCLEAR DAMAGE: AN EXCEPTION TO TORT LAW In order to understand the origins of ‘channelling’, it is important to go back to the early 1950s where (quite similar to the situation in India at present) nuclear power plants were operated exclusively by the state.12 This made suppliers and designers require ‘hold harmless’ clauses to be a part of their contract which made the state bear the full liability of any damage that resulted from a nuclear incident. These clauses did not prevent third parties (victims of a nuclear accident) from suing the suppliers or designers, rather, they ensured that any financial liability arising out of the nuclear accident would be borne by the state.13 This is known as economic channelling and was given legislative sanction by the Price-Anderson Act, 1957. In a system of economic channelling, victims are not legally precluded from suing the suppliers of nuclear material or designers of a nuclear installation.14 However, the financial burden for damage from a nuclear incident is finally borne by the operator who takes out insurance policies not only for covering third party liability, but also the liability of suppliers, designers etc.15 Thus, the suppliers and designers are indemnified by the operator.16 Legal channelling refers to the exclusive channelling of liability for the payment of damages arising from a nuclear accident to the operator, thus one is precluded from exercises remedies against the supplier or designer which would otherwise have been available under ordinary tort law.17 This is irrespective of the operator’s actual contribution to the nuclear accident, otherwise referred to as the no fault liability principle.18 Legal channelling is provided for by precluding victims from suing the suppliers and designers of a nuclear reactor and allowing them only one recourse in case of any damage arising from a nuclear incident—the operator. Despite having a compensation paradigm based on economic channelling within the country, at the end of the 1950s, US suppliers and designers lobbied to have legal channelling of liability incorporated into the international Conventions on nuclear liability.19 This push for legal channelling was with the intention to secure the interests of US suppliers and designers as they began to export nuclear raw material, technology and other expertise to Europe, whose nuclear energy sector was still in its nascent stage at that time.20 The rationale behind legal channelling can be found in the ‘Harvard Report’ which was drafted under the auspices of Harvard Law School and the Atomic Industrial Forum Inc. The Report noted that suppliers and designers often ‘lose control’ over their products and services once these have been delivered.21 Another rationale which was identified was that the insurance pool available would increase if there were fewer entities (for instance, only operators) which would be required to purchase insurance.22 Thus, since the 1950s, nuclear liability has been an exception to tort law wherein the third party would be allowed to sue for any damage caused to them even if they were not privy to the contract. Those who defend legal channelling say that it makes it easier for victims to access remedies by providing for claims to be processed through a single forum. Having a single forum would also prevent ‘forum shopping’ on the part of the victims.23 Victims would have the convenience of needing to sue only one entity on a strict (no fault) liability basis. This would considerably reduce the costs otherwise involved in instituting suits in multiple fora. There are also those who are more sceptical of legal channelling and see it as nothing short of corporate immunity.24 Persons holding this view would contend that victims are benefited to a larger extend when they can sue suppliers and designers who often have deeper pockets than the operators. Critics of legal channelling also argue that the impetus for suppliers and designers to implement safety standards and quality control will reduce when they know that they cannot be held liable for any damage that might arise despite the fact that it is linked to their design or the material supplied by them.25 It is thus hard to conclusively decide on the merits of each model of compensation, there are already some countries that seem to be moving away from legal channelling. For instance, Austria enacted a law in 1999 to abolish legal channelling.26 Austria itself has an anti-nuclear state policy and the 1999 enactment was mainly prompted by Austria’s concerns with respect to its neighbouring countries which have nuclear reactors (for instance, Slovenia, Hungary, Switzerland).27 Irrespective of the merits of the Indian nuclear compensation regime and whether or not it actually encapsulates the principles of legal channelling, it is worth exploring the controversial provisions of the Act so as to be able to predict how the Supreme Court is likely to interpret and give effect to them. TRENDS OF THE SUPREME COURT WITH RESPECT TO STATUTORY INTERPRETATION In order to understand the approach that the Supreme Court is likely to use when interpreting Sections of the Act and whether this will allow the Act to give effect to the principle of legal channelling, a brief overview of the trends of the Courts’ approach to statutory interpretation is depicted. This is done through a brief overview of the Supreme Court’s use of tools of statutory interpretation with respect to statutes that are based on or which are intended to give effect to international conventions, and the way and extent to which it uses the purposive approach to statutory interpretation. There exist several aids to interpret legislation which include the long title, marginal notes, headings, deeming provisions, punctuations, etc.28 All of these are internal aids to interpretation which help in discovering the context in which a particular provision is placed and this context must be considered when ascertaining the provision’s meaning.29 However, aids to interpretation may also be found outside the legislation in the form the statements of objects and reasons, legislative history, Parliamentary debates etc. These are known as external aids to interpretation and are used to ascertain the intention of the legislation when the meaning of a particular provisions is vague or unclear.30 The use of the external aids to interpretation in order to ascertain legislative intention and the meaning of statutory provisions is not permitted by the textual approach to interpretation, which strictly limits the interpretation of a statute to what is provided in its text. The purposive approach is more flexible and allows the courts to consider external aids to interpretation (also known as extra-statutory material) and the consequences of a particular interpretation when ascribing meaning to a provision. Thus, it may be said that the willingness of the Court to permit the use of external aids to interpretation depends on its approach to interpretation, that is whether it is inclined towards a literal approach or a purposive, more flexible approach while ascertaining the meaning of the words used in a Section of a statute. As discussed later in the article, this is of great significance when interpreting Sections of the Act since they can differ significantly when ascertained by using the purposive approach or the textual approach. WHEN IS THE USE OF EXTERNAL AIDS OF INTERPRETATION PERMISSIBLE? Though the use of external aids to interpretation is avoided when the meaning of the text is clear and unambiguous, there are instances wherein extra textual sources are used to interpret the meaning of a provisions despite there not arising ambiguity from its literal interpretation.31 For instance, the Supreme Court will presume the constitutional validity of a statute and prefer a construction that is in conformity with the provisions of the Constitution of India.32 The Court will also use international conventions and international customary law as an aid to constructing domestic laws so long as there is no inconsistency between them.33 The Court has often read Articles of the Constitution along with Articles of international conventions in order to give a more liberal construction to the former. A significant case in this regard is that of Vishaka v. State of Rajasthan which read international conventions into articles 14, 19, and 21 in the Constitution to hold that the right to work in an environment free from sexual harassment was a fundamental right.34 In the past, the Supreme Court of India had been sceptical with respect to the use of any pre-enactment history, such as the acceptance or rejection of amendments to a Bill, in order to interpret the meaning of legislation.35 In fact such a position in the case of East and West Steamship Company, George Town, Madras v. Ramalingam Chettiar36 dealt specifically with statutes having an ‘international character’. The Court had held that when dealing with statutes that seek to give effect to international conventions, the court must emphasise the grammatical meaning of the words ‘more than usual.’37 However, there has been a gradual change in this position of the Supreme Court (with respect to various types of statutes) as has been indicated by the Court’s willingness to consider the rejection of an amendment to be indicative of the intention of law makers.38 The use of other Parliamentary material, such as speeches of ministers with respect to a Bill are also initially rejected as evidence of legislative intention by the Supreme Court of India, however, the case of Pepper v. Hart39 has had the effect of changing this. It has now become common practice for the Supreme Court of India to refer to debates of the Constituent Assembly while interpreting the provisions of the constitution.40 There are also several instances where the Court has referred to the speeches of ministers with respect to a Bill to ascertain the rationale behind a particular provision or the “mischief” that it was intended to cure.41 RELEVANCE OF THE PURPOSIVE APPROACH IN INDIA In the recent (2017) case of Abhiram Singh,42 the Supreme Court had dealt with Parliamentary history as a tool of interpretation. The way in which this tool of interpretation was used in this case may be relied on since this case was decided by a constitutional bench comprising seven judges. The Court rendered its decision by a majority of 4:3, holding that Section 123(3) of the Representation of People’s Act, 1951 must not be read strictly. Briefly put, the question before the Court was whether in the phrase, ‘…appeal by a candidate… to vote or refrain from voting for any person on the ground of his religion, race, caste, community, or language (…)’, the word ‘his’ restricted the scope of the section to appeals based on the candidate’s religion alone. Though this would be the plain meaning of the section, the majority held that the section included appeals based on the elector’s religion, race, caste, community, or language as well. The majority opinions relied on an amendment to Section 123(3) made in 1961 by which its scope was expanded. They also referred to the law minister’s speech when proposing the amendment which pointed to the need to curb communal and sectarian tendencies. Importantly, the majority pointed to how there existed no Parliamentary material in the form of notes accompanying the Bill or statement of objects and reasons that indicated Parliamentary intention to restrict the scope of the Section, thus significantly basing their interpretation of the scope of the Section on legislative history and statements made while piloting the amending bill. The dissenting opinion (authored by Justice D.Y Chandrachud for himself, Justice Goel, and Justice Lalit) preferred a more literal and plain meaning construction of the provisions,43 because petitions alleging corrupt practices during an election have a quasi-criminal character.44 Interestingly, even the dissenting opinion used Parliamentary history in its interpretation of Section 123(3). The discussion of legislative history in the dissent focused on the law minister’s speech which explained the introduction of the word ‘his’.45 This is important because, despite broadly favouring different approaches to interpretation, the majority and dissenting opinions both made use of legislative history, that is external aids to interpretation. Further, this was done sans any ambiguity in the plain meaning of the statute. THE USE OF INTERNATIONAL CONVENTIONS TO INTERPRET DOMESTIC LEGISLATION Legislation which has been enacted to give effect to an international convention is normally interpreted, as far as possible, so that it are consistent with the relevant convention.46 The relevant branch of international law, and customary rules of international law which are not contrary to domestic law are also considered.47 The Court’s consideration for international convention seems be contingent on the existence of ambiguity or (at least one) reasonable alternative interpretation of the provision. In the case of V.O Tractotoexport Moscow v. Tarapore and Company,48 the Supreme Court had emphasised the need for the existence of ambiguity in order to deviate from the natural meaning of the text so as to make it consonant with an international convention. In this case, the Court interpreted the word ‘submission’ in Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 restrictively. This was despite the realisation of the Court that such an interpretation would contravene the purpose and objects of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.49 However, in another (later) case—R.M Investments and Trading Companies Private Limited v. Boeing Company50—which dealt with the word ‘commercial’ in the same Section of the same Act as V.O Tractoroexport Moscow, the Supreme Court interpreted the term more liberally despite there not being any ambiguity arising from a plain reading of the provision. In R.M Investments, the Supreme Court referred to the meaning of the word ‘commercial’ in the Model Law prepared by the United Nations Commission for International Trade Law in arriving at the liberal interpretation of the word. Though the Court maintained that the final meaning ascribed to the word must be one that can be reasonably carried by its natural and grammatical meaning, the Court held and recognised that the Act was ‘…calculated and designed to sub serve the cause of facilitating international trade and promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration…’ The use of a more purposive approach to statutory interpretation without the existence of any ambiguity is a trend which can be identified in Abhiram Singh as well. It is thus safe to say that international conventions become relevant in interpreting the provisions of an Act (even when the Act purports to give effect to the international convention) only when there are two possible alternative constructions that can reasonably be borne by the provision. In such a situation, the construction that is consonant with the international convention will be preferred.51 Though the requirement for ambiguity in order to turn to international conventions or other extra statutory material is being relaxed, there are counter currents to this trend. Examples may be made of Trutuf Safety Glass Industries v. Commissioner of Sales Tax (U.P),52State of Kerala v. P.V. Neelakandan Nair and Ors.53 (both discussed later in the paper), and the dissenting opinion in Abhiram Singh. In either case, it is very likely that the Court will resort to extra textual material in order to interpret Section 46 of the Act. The reason for this is that that there does appear to be considerable ambiguity with respect to the scope of the Section (even from a plain reading) which needs to be resolved. USING THE CSC AS AN EXTERNAL AID TO INTERPRETATION Though the Supreme Court has used international convention to interpret legislation, it has done so only when Parliament manifests an intention to comply with those conventions. The trend with respect to such legislations (which are enacted to give effect to an international convention) has been to make such an intention clear in the long title or preamble of the legislation. An example may be made of the Carriage by Air Act, 1972, the long title of which begins by stating that it is an Act ‘…to give effect to the Convention for...carriage by air signed at Warsaw of the 12th of October, 1929…’54 Other examples include the preambles of the Environment (Protection) Act, 1986, the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013, and the Arbitration and Conciliation Act, 1996, all of which explicitly referred to the relevant international convention. The Civil Liability for Nuclear Damage Act, 2010 is different from other legislations enacted with the intention to comply with international conventions. The Act received the assent of the President of India on 21st September, 2010 when India had not ratified the CSC. India went on to ratify the CSC on 27th October, 2010. One may contend that the chronology of events is a reason to believe that the Act was not meant to give effect to the provisions of the CSC or the nuclear liability regime (legal channelling) they enshrined. Such contentions do not take into account the fact that compliance of domestic laws with the Annex of the CSC is a pre-requisite to a country signing the CSC.55 Thus, unlike the case of other intentional conventions, India had to make sure that its domestic regime was in compliance with the CSC before it became a part of the Convention. The Parliament was cognizant of this requirement for becoming a member of the CSC when passing the Act, this is evident from the Act’s statement of objects and reasons.56 The statement of objects and reasons recognises the CSC as a ‘free standing instrument’ which any country may become a part of after bringing its national legislation in compliance with the Annex of the CSC.57 The statement of objects and reasons acknowledges the lack of legislation to govern nuclear liability and compensation in India, given that the nuclear industry had (before the existence of the Act) been governed only by the Indian Atomic Energy Act 1962. It concludes by stating that the Act must be enacted for the aforementioned reasons and in order to become a part of an appropriate international nuclear liability regime.58 The statement of objects and reasons and the manner in which the Act has reproduced (in verbatim) most of the Annex of the CSC in its provisions59 are strong indications that the Parliament intended to ratify the CSC. Further, the intention to ratify the CSC through the Act has been expressed by the MEA in its FAQs on the subject.60 The statement of objects and reasons are an external aid to interpretation which the Court has relied on in order to ascertain the meaning of a provision. In the case of Novartis A.G. v. Union of India,61 the Supreme Court confirmed that the statement of objects and reasons could be relied on in order to ascertain the objective of a legislation.62 Thus, the provisions of the CSC and its Annex can legitimately be an external aid to interpretation which the Supreme Court relies on while ascertaining the meaning of the provisions of the Act, especially Sections 17 and 46 which deal with supplier liability and legal channelling respectively. LEGAL CHANNELLING AND THE INDIAN NUCLEAR LIABILITY REGIME Even though legal channelling of liability is provided for in the long title in the Act, Sections 17 and 46 of the Act have raised doubts about whether the objectives set out in the long title will actually be effectuated.63 Such concerns are shared by both domestic and foreign suppliers (Reference). It is also important to note the specific position of countries like Russia, France, and the USA which had used considerable diplomatic capital to obtain an exemption for India from the Nuclear Suppliers Group (the NSG).64 This is significant given that normally, only countries that are signatories to the Non-Proliferation Treaty can trade with the NSG. The exemption allowed the Indian nuclear sector access to the NSG’s resources without being a member of the Non-Proliferation Treaty. These countries that had lobbied for India’s exemption felt let down by India’s domestic nuclear liability law.65 Within India, the concerns which surround the Act are with respect to the constitutionality of the Act which has been challenged before the Kerala High Court and the Supreme Court. There are multiple grounds on which the challenge are based, including that certain authorities which the Act creates are not autonomous enough to carry out their functions impartially; that certain provisions in the Act suffer from excessive delegation and the limit placed upon the compensation which the operator of a nuclear installation is liable to pay; and would thereby be violating the right to life under Article 21 of the Constitution of India. The Writ Petition filed before the Kerala High Court was disposed upholding the validity of the Act.66 However, as this paper is being written, there are two petitions67 before the Supreme Court challenging the validity of the Act which are awaiting their final hearing. These petitions challenge the monetary cap imposed by the Act on the liability of an operator for nuclear damage. The petitioners contend that this is in contravention to the polluter pays principle and the absolute liability principle which have been recognised by the Supreme Court of India. SECTIONS 17 AND 46: INNOVATION IN COMPLIANCE OR INTERNATIONAL NON-COMPLIANCE? Section 17 and Section 46 of the Civil Liability for Nuclear Damage Act, 2010 have been at the heart of the concerns raised by the international community as well as domestic suppliers and vendors. These Sections raise questions about whether the Act in its provisions remains true to the objective of legal channelling of liability (to the operator) that it sets out in its long title. The perception of some authors68 is that the principle of legal channelling is considerably diluted by allowing existing laws, and consequently, the remedies available to victims under them to continue to operate.69 This concern is exacerbated by allowing an operator to have recourse to a supplier(s) under conditions that deviate from what are currently acceptable conditions for recourse against the supplier under international conventions.70 International conventions provide for the right to recourse of the operator of a nuclear facility against the supplier where it is provided so in writing under a contract or where the nuclear incident was a result of any act or omission done with the intent to cause nuclear damage.71 The Indian law provides for an additional circumstance where such right of recourse may be exercised by the operator. Section 17(b) of the Act provides that the operator shall, after paying compensation to the victims, have a right to recourse against the supplier where the nuclear incident which gave rise to the operator’s liability was a result of an act of the supplier or his employee, including the supply of equipment or material having latent or patent defects or sub-standard services. Unlike clauses (a) and (c) of Section 17 (which are in consonance with international conventions), Section 17(b) neither requires that such right be provided for in a contract nor that there exists any intention with respect to the defect in the equipment or material. Section 46 of the Act provides that the Act shall be in addition to and not in derogation of any of the laws in force, and that nothing contained in the Act shall exempt the operator from any proceedings which may be instituted against him, other than under the Act itself. For the sake of discussion, this Section may be divided into two parts. The first part being the one which speaks about the Act not being in derogation of any other laws, and the second part being the one which speaks specifically about the liability of operators. Though the second part of the sentence contained in Section 46 clearly refers to the operator, the first part does not. The first part could arguably be interpreted to mean that the laws that currently allow for recourse against suppliers and which do not recognise legal channelling of liability will continue remain in force (for instance, tort law or product liability law).72 An example may be made of Section 3 of the Consumer Protection Act, 1986 which states that the Consumer Protection Act is in addition to and not in derogation to other laws. This is the same as the first proposition of Section 46. The Supreme Court has interpreted Section 3 of the Consumer Protection Act to confer a wide jurisdiction.73 Thus, the provisions of the consumer protection Act will have jurisdiction despite the fact that other forums/courts have the jurisdiction to adjudicate upon the lis.74 If laws such as product liability laws which continue to apply, there may not be legal channelling of liability towards the operator despite what may be stated in the long title. THE NEED FOR USING EXTERNAL AIDS WHEN INTERPRETING SECTIONS 17 AND 46 As already discussed, there exist internal and external aids to interpreting a statute. These may be used to interpret a statute if the text of a provision is unclear or ambiguous, then the interpreter may use the long title and the preamble to understand the object and purpose of the statute and use this to ascertain meaning from its text.75 Since the Civil Liability for Nuclear Damage Act, 2010 does not have a preamble, its object and purpose may be derived from its long title.76 The Act’s long title lays down, inter alia, the objective of providing prompt compensation to victims, and to do so through a no-fault liability regime which channels liability to the operator. Section 4 of the Act, provides that the operator shall be liable to compensate for the damage caused by a nuclear incident. From these provisions of the Act it is clear that the liability is to be channelled to the operator, however, the language of the Act does not posit that the liability must be exclusively channelled to the operator. Thus, in the present case the internal aids of interpretation have not been useful in allaying the concerns of suppliers and the international community. In fact, the inconsistency that seems to exist between the long title and the text of the Act is what creates confusion with respect to the legislation’s intention to apply legal channelling to nuclear liability.77 For these reasons, there is a need to examine interpretational aids which do not lie within the Act and take a more purposive approach to interpreting the same. APPLYING THE PURPOSIVE APPROACH TO THE INDIAN NUCLEAR LIABILITY LAW When considering the Civil Liability for Nuclear Damage Act, 2010, the Parliamentary material provides clarity on the meanings of Sections 17(b) and 46. From the preceding discussion, it can be concluded that it is highly likely that the Supreme Court would at least consider (if not rely on) extra textual sources to ascertain meaning of provisions of the Act. The inferences which may be drawn from these extra-textual sources with regard to the Indian nuclear liability law is examined below. Section 46 Section 46 contains two ‘propositions’.78 The first proposition is that the Act is in addition to and not in derogation of existing laws in force. The second proposition is that victims’ access to other recourses against the operator will remain unaffected. It may be noted that the first proposition of the Section can be found in many Indian statutes,79 however, the second proposition is specific to Section 46 of the Act. If other laws are also to remain applicable, as per the first proposition of the Section, then consumers and operators (as buyers) would have recourse against the suppliers under existing Indian laws such as the Consumer Protection Act, 1986 and the Sales of Goods Act, 1930, which collectively can be referred to as product liability laws. The second proposition of the Section refers specifically to the continuation of existing remedies with respect to the operator, what is unclear is whether the first proposition is also intended to be applied in a limited fashion, that is, only with respect to the operator, thus not allowing for the continuance of existing remedies against the supplier. Such ambiguity in the meaning of the Section increases when reading it along with the long title which stipulates channelling of liability to the operator. As discussed in an earlier section, this channelling makes the liability exclusively fall upon the operator and this would be in contravention to existing product liability laws. Thus, the first proposition of the Section raises question as to how effectively the Act might channel liability to the operator of the plant. The MEA of the Government of India has clarified through answers numbered 11 and 12 of the FAQs published on their website that Section 46 does not provide a basis for victims to bring claims against suppliers.80 In the answer numbered 12, reference is made to certain amendments that were proposed by the Standing Committee and rejected when drafting the Bill. This was interpreted as indicative of Parliament’s intention to exclude suppliers from the ambit of Section 46. The Ministry refers to two cases (each decided by a division bench of the Supreme Court)—Trutuf Safety Glass Industries v. Commissioner of Sales Tax (U.P)81 and State of Kerala v. P.V. Neelakandan Nair and Ors.82 to support its interpretation of the Section. These cases are briefly studied hereunder to understand whether the precedent set by them supports the Ministry’s approach to interpreting Section 46. For the purposes of this discussion, it is not necessary to delve in to the factual matrix of Trutuf and P.V. Neelakandan Nair further than stating that the cases deal with the interpretation of Rule 60 of the Kerala Service Rules (Part I) and Rule 62 of the Kerala Education Rules 1959, and Entry 2 of Annexure I of a notification under Section 4-B of the U.P Sales Tax Act, 1948, respectively. The MEAs was correct in identifying that these cases held that every statute is to be interpreted with in accordance with the intention of the legislature. However, all approaches to statutory interpretation would agree that a statute is to be interpreted so as to give effect to Parliament’s intention. The difference in opinion and approach is with respect to how this intention is ascertained and when it considered to interpret a Section. Textualists would maintain that the only relevant intention is that conveyed by the plain meaning of the legislation through its enactment; purposivists would allow the consideration of extra-textual material. When considering Section 46 of the Act, a plain reading of the statute’s text seems to allow for suppliers to be made liable for the damage by the operation of existing laws.83 It states that the statute will be in addition to and not in derogation of existing laws in force. It is only when one looks at the Parliamentary discussions with respect to the Bill that such an interpretation seems incorrect. However, Trutuf and P.V Neelakandan Nair seem to favour a textual approach to interpretation. In these cases, Supreme Court did not inquire into Parliamentary history or other extra textual material in order to ascertain legislative intention in these cases. In fact, the Court cautioned against making a priori judgements about intention and using these to ascertain the meaning of a statute when the plain meaning of the provisions was not ambiguous. Trutuf explicitly states that the judiciary assumes ‘…the functions of legislators when we depart from the ordinary meaning of the precise words used, merely because we see, or fancy we see, an absurdity or manifest injustice from an adherence to their literal meaning.’ Both these cases dealt with provisions which (in the opinion of the Court) were unambiguous which did not necessitate the Court to go beyond the text of the statute to ascertain their meanings. Thus, the Ministry’s decision to rely on these two cases may not lend support to its (purposive) approach for interpreting Section 46 (by using extra-statutory material). It is for the aforementioned reasons that the subsequent discussions in the paper will rely on the principles laid down in the cases like Abhiram Singh and even earlier cases like Har Sharan Verma v. Tribhuvan Narain Singh84, and not the ones cited by the Ministry with respect to Section 46. The Standing Committee’s Report on the Civil Liability for Nuclear Damage Bill, 2010 contains the background of the Bill in its preface. There, the obligation of contracting parties to contribute a certain amount to the fund established under the CSC is mentioned along with certain key features of the CSC. But the intention to comply with the CSC and the principle laid down in its Annexure through the proposed legislation has not been mentioned explicitly. Nevertheless, India has ratified the Convention on 27th October, 2010 and has also made the required deposit under the Convention on February, 2016. There were two notes of dissent attached to the Report of the Standing Committee. The basis for the second dissenting note, inter alia, was that Section 46 did not include suppliers within its ambit and the author of the second dissent found this scope was too narrow. According to this dissenting note, the position was clarified before the Standing Committee that that the scope of Section 46 was limited to judicial review as provided under Article 226 and 32 of the Constitution. The author of the second dissenting note was of the opinion that, the Clause as it stood in the Bill (and as it stands in the enactment) was limited to operators and not suppliers. The author of the second dissenting note also proposed an amendment which explicitly made suppliers and designers (along with the operator) liable under proceedings instituted outside the scope of the Bill. However, Standing Committee and Parliament rejected this amendment, and the Bill was passed by Parliament without the proposed amendments to Section 46. Such rejection of amendments has been used as a basis to ascertain what a statute means (or does not mean) by the Supreme Court.85 From the abovementioned observations of the Standing Committee Report on the Bill and the manner in which its recommendations were treated, it is quite clear that neither the Standing Committee nor the Parliament (which had access to the dissenting note of the Standing Committee) wanted to amend Section 46 so as to bring suppliers within its ambit. With respect to the first part of the Section, it seems to be clear that the intention of Parliament was to restrict the scope of ‘being in force’ to Articles 22686 and 32.87 However, for the Section to be able to carry such a meaning, the natural meaning of its words will have to be circumscribed to only include to remedies which are in force and exclude other remedies (such as those under product liability law). Section 17(b) Section 17(b) of the Act has been a matter of concern for the international community, especially among countries such as Russia, France, and the USA which have contracts to supply nuclear reactors to India (Reference). As already mentioned, the Section makes an addition to the accepted instances wherein the operator has a right to recourse against his suppliers. Sections 17(a) and 17(c) are compliant with the CSC. Section 17(b) gives the operator the right to recourse in case there is a latent or patent defect in the material or equipment supplied as a consequence of an act of the supplier or his employee, and if such defect had resulted in the nuclear incident. This removes the need for a written contract and the need for intention (on the part of the supplier) in order for the operator to avail the right of recourse. The MEAs’ FAQs gave detailed explanations to address the concerns of the international and national nuclear community.88 The Ministry stated that clause 17(b) is a clause which is normally found in most commercial contracts and that parties normally agree upon and elaborate on these clauses.89 If this is indeed the case, it is unclear how Section 17(b) of the Act is different from Section 17(a) which states that the right to recourse exists where it is provided for in a written contract. In the Standing Committee, it was suggested to amend Section 17(a) of the Bill so as to add the word ‘and’ after the end of clause (a) of Section 17.90 With the addition of the word ‘and’ after Section 17(a), a written contract would become a prerequisite to invoke clause (b) of Section 17 that would follow the word ‘and’. The proposed amendment was rejected and the word was not included at the end of Section 17(a). It is thus clear, from the reading of the Standing Committee’s Report and the manner in which its suggestion was treated, that the right of recourse available under Section 17(b) was not meant to be tied down to the criteria of recourse as (already) provided for under Section 17(a), i.e., the existence of a written contract. The Ministry also maintains that Section 17(b) is within the ambit of Article 10 of the Annexure of the CSC by stating that Article 10 does not restrict the content of the contract which is to be entered between the supplier and the operator. This is true, the scope of the contents of the contract which may be entered into between the operator and supplier is not restricted by Article 10. However, Article 10 of the Annex unequivocally restricts the circumstances under which the right to recourse may be made available to the operator against the supplier. The Article states that such right may be made available ‘only’ when in it is provided for by a contract in writing, or when the nuclear incident is a result of an act or omission done with the intention to cause nuclear damage. This interpretation arises from a plain reading of the Article and is also the interpretation as given by the US Department of State.91 It might be contended that the words of Section 17(b) can be reasonably construed to bear the meaning given to them by the MEA in their FAQs. That said, two problems arise by taking such a view. Firstly, whenever one strays away from the natural meaning of a provision, it is based on some evidence that the resulting meaning would give effect to the intent of the legislature. In the instant case, this is not so. When piloted, Section (Clause) 17(b) required ‘gross negligence’ to be proven on the part of the operator before using the right of recourse against the supplier; gross negligence is normally difficult to prove. The rationale of the Standing Committee for adding the word ‘and’ after clause (a) was that without a written contract, suppliers might escape liability under clause (b) of Clause 17 of the Bill as it existed then. The Standing Committee’s recommendation to substitute gross negligence for ‘latent or patent defect…’ was accepted but the recommendation to add ‘and’ at the end of clause (a) of Section 17 was not accepted. Thus, it cannot be said that Parliament had the intention to limit the supplier liability under Section 17(b) to a written contract. It also cannot be said that the Parliament intended that Section 17(b) merely represent a clause normally present in written contracts. The Supreme Court has held that it must avoid the rejection of words in a statute as meaningless.92 Such rejection is precisely what is required in order to give Section 17(b) the meaning that the MEA has given it. Secondly, if the plain meaning of the words of a text and the legislative intention behind enacting the same do not provide for the meaning that is arrived at, it may be stated that the Court (or the executive) must refrain from giving it such meaning. The reason being that in such a case, there is no basis for the same except the subjective perception of legislative intent by the executive or the judiciary.93 This must be avoided; the legislative intention of elected representatives is not to be substituted in a democracy. The Government of India seems to be in a catch-22 situation when interpreting Sections 17 and 46 of the Act. The Government needs to use legislative history (as it has done) to substantiate the interpretation of Section 46 as given in the FAQs. However, the same legislative history does not support the interpretation of Section 17(b) of the Act, or the opinion given in the FAQs regarding the Section’s compliance with Article 10 of the Annex of the CSC.94 It is thus clear that the objectives of the Act are not restricted to effectuating the CSC. As has been observed in the Standing Committee Report, the Act balances the objective of fulfilling international obligations with other Indian interests, this is something that the Supreme Court will consider when determining the meaning of the Act’s provisions.95 CONCLUSION This article attempted to interpret Sections 17 and 46 of the Act using the purposive method of interpretation and in the process, took aid from the same resources. The conclusions reached after this process of interpretation are somewhat different for those reached by the MEA as expressed in their FAQs. This might be because thus far, the Government has been mitigating concerns and is not in a position to impartially examine the meaning of the Sections. The real question which needs to be answered is how the Supreme Court will approach these Sections since it is the Court’s interpretation that will ultimately decide the rights and liabilities of the parties involved. Though the interpretations discussed above are in line with the general trends of the Supreme Court, the fact remains that the weightage given to interpretations using textual and purposive approaches will differ from case to case and there is no way to predict the Supreme Court’s interpretation of a statute with absolute certainty, but what is clear is that the Supreme Court is at least willing to rely on external material to interpret a statute. Thus, though the extra textual material shows that Section 46 was meant to be restricted only to judicial review under Articles 226 and 32, this does not automatically mean that the Supreme Court will interpret the Section in such a manner. That articles 226 and 32 do not need to be sanctioned by legislation in order to remain available is common knowledge. This may lead the Court to not consider an interpretation of the Section which restricts it to these Articles as it would have the effect of making the Section meaningless within the scheme of the Act.96 But until the Supreme Court has an opportunity to interpret the Act’s provisions, the Government must ensure (to the best of its ability) that the provisions’ meanings are ascertained uniformly, with some methodology in place for the same. Otherwise, the interpretation might appear to be arbitrary. But most importantly, these interpretations must be in line with precedents set by the Supreme Court. If not, any success achieved by the Government in allaying fears would only be temporary and inaccurate. Author thanks Vishakha Raj for research support, and Els Reynaers Kini and Praachi Misra for helpful comments. Footnotes 1 Department-Related Parliamentary Standing Committee on Science and Technology, Environment, and Forests, Two Hundred and Twelfth Report on ‘the Civil Liability for Nuclear Damage Bill, 2010 (Rajya Sabha 2010–2011, 212) (212th Report) 6. 2 ibid 4. 3 EM Ameye ‘United States and India: Two Nuclear States with Legislation that Truly Holds Responsible Parties Liable in Case of a Nuclear Accident’ [2014] J Risk Res 1, 10. 4 Convention on Supplementary Compensation for Nuclear Damage (adopted 12 September 1997, entered into force 15 April 2015) (CSC) art 2. 5 212th Report (n 1) 6. 6 Civil Liability for Nuclear Damage Act 2010, S. 17: “17. The operator of the nuclear installation, after paying the compensation for nuclear damage in accordance with section 6, shall have a right of recourse where- (a) such right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services; (c) the nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage.” 7 Civil Liability for Nuclear Damage Act 2010, S. 46: “46.The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator from any proceeding which might, apart from this Act, be instituted against such operator.” 8 DA Farber ‘Do Theories of Statutory Interpretation Matter-A Case Study’ [1999] 94 Northwestern University Law Review1409, 1411–1414; JT Mallot ‘The Rise and Fall of Textualism’ [2006] Columbia Law Review 106, 1. 9 K Tokeley ‘Interpretation of Legislation—Trends in Statutory Interpretation and the Judicial Process’ [2002] Victoria University of Wellington Law Review 965, 967, 33; N Lee, ‘A Purposive Approach to the Interpretation of Tax Statutes?’ [1999] Statute Law Review 20 (2), 124; SC Styles, ‘The Rule of Parliament: Statutory Interpretation after Pepper v. Hart’ [1994] Oxford Journal of Legal Studies 14, 151. 10 Special Leave Petition (C) No. 27335 of 2012 along with SLP(C) 29121 of 2012 and WP(C) 407/2012. 11 ‘Frequently Asked Questions and Answers on Civil Liability for Nuclear Damage Act 2010 and related issues’ (Ministry of External Affairs-Government of India 8 February 2015) www.mea.gov.in (12 November 2017) (Frequently Asked Questions). 12 Ameye, ‘United States and India’ (n 3) 3. 13 ibid. 14 ibid. 15 ibid 5. 16 ibid. 17 Ameye, ‘United States and India’ (n 3) 1–3. 18 EM Ameye, ‘Channelling of Nuclear Third-Party Liability Towards the Operator: Is it Sustainable in a Developing Nuclear World or is there a Need for Liability of Nuclear Architects and Engineers?’ [2010] European Energy and Environmental Law Review 33, 34. 19 Ameye, ‘United States and India’ (n 3) 3. 20 ibid. 21 ibid. 22 Ameye, ‘Channelling of Nuclear Third-Party Liability Towards the Operator’ (n 18) 39. 23 ibid 36–39. 24 Nobert Pelzer, ‘The Indian Civil Damage for Nuclear Liability Act, 2010 – Legislation with Flaws?’ [2011] 56 ATW – International Journal for Nuclear Power 1, 3. 25 Ameye, ‘United States and India’ (n 3) 9. 26 ibid. 27 ibid. 28 MN Rao and A Dhanda, N.S Bindra’s Interpretation of Statutes (10th edn, LexisNexis 2007) 685. 29 ibid 685–689. 30 Justice GP Singh, Interpretation of Statues (10th edn LexisNexis 2006). 31 Abhiram Singh v. C.D Commachen [2017] 2 SCC 629. 32 Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar [1958] Indlaw SC 34; Olga Tellis v. Bombay Municipal Corporation [1985] Indlaw SC 525. 33 Githa Hariharan v. Reserve Bank of India, [1999] 2 SCC 228. 34 Vishaka v. State of Rajasthan, [1997] AIR SC 3011. 35 Ashwini Kumar Ghose v. Arabinda Bose, [1952] AIR 369. 36 1960 Indlaw SC 465 (Supreme Court). 37 ibid [12]. 38 Justice G.P Singh (n 30) 227. See also, Express Newspapers (Pvt.) Ltd. v. Union of India, [1958] AIR SC 578. (Supreme Court); Har Sharan Verma v. Tribhuvan Narain Singh, [1971] AIR SC 1331 (Supreme Court). 39 Pepper (Inspector of Taxes) v. Hart [1992] UKHL 3. 40 S.R Choudhury v. State of Punjab [2001] 7 SCC 106 [33]. 41 Justice G.P Singh (n 30) 224–226. 42 Abhiram Singh (n 31). 43 ibid [100]–[104]. 44 The Representation of People’s Act 1951, s. 8A. 45 Abhiram Singh (n 31) [130–135]. 46 Justice GP Singh (n 30) 584. 47 ibid 572. 48 [1969] 3 SCC 562. 49 Justice GP Singh (n 30) 585. 50 [1994] AIR SC 1136. 51 Chairman Railway Board v. Chandrima Das [2000] AIR SC 988. 52 [2007] 9 SCALE 610 53 [2005] 5 SCALE 424 54 See also the long title of The Narcotic Drugs and Psychotropic Substances Act 1985. 55 CSC (n 4) art. 2. 56 212th Report (n 1) 41. 57 ibid. 58 ibid. 59 Pelzer (n 24) 6. 60 Frequently Asked Questions (n 11), refer to answers numbered 4, 5 and 6 61 2013 (6) SCC 1. 62 ibid [27–28]. 63 Pelzer (n 24) 5–6. 64 Mohit Abraham, ‘Nuclear Liability—A Key Component in the Public Policy Decision to Deploy Nuclear Energy in Southern Asia’ (American Academy of Arts and Sciences, 2014) 48 www.amacad.org/multimedia/pdfs/publications/researchpapersmonographs/nuclearLiability.pdf (15 November 2017). 65 ibid 56. 66 Yash Thomas Mannully v. Union of India W.P.C No. 27960 of 2011, decided on 21 August, 2015. 67 Special Leave Petition (C) No. 27335 of 2012 along with SLP(C) 29121 of 2012 and WP(C) 407/2012. See also, Ram Mohan M.P ‘Nuclear Liability Law of India: an appraisal of extent of recourse, right to liability and transboundary applicability’ [2014] 17 Journal of Risk Research 115, 122. 68 Ameye, ‘United States and India’ (n 3) 6; Mohit Abraham (n 64) 13; R.B Grover, ‘The Civil Liability for Nuclear Damage in India: An Engineering Perspective Regarding Supplier’s Liability’ [2017] Progress in Nuclear Energy https://www.journals.elsevier.com/progress-in-nuclear-energy (22 November 2017). 69 The Civil Liability for Nuclear Damage Act (2010) S. 46. 70 ibid s.17. 71 CSC (n 4) Art 2. 72 Pelzer (n 24) 2. 73 State of Karnataka v. Vishwabhati House Building Coop. Society and Others [2004] 1 SCC 305 74 ibid [48]. 75 MN Rao and A Dhanda (n 28) 43; Justice G.P Singh (n 30); Re: Kerala Education Bill [1958] AIR SC 956 (Supreme Court); Bishwambar Singh v. State of Orissa [1954] SCR 842 (Supreme Court). 76 Union of India v. Elphinstone Spg and Wvg Co. Ltd. & Ors. [2001] 4 SCC 139 [17]. This case held, ‘the…long title is a part of the Act itself and is admissible as an aid to its construction.’ 77 Pelzer (n 24) 3. 78 212th Report (n 1) 25. 79 Electricity Act 2003, S.175; The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Traditional Rights) Act 2006, S.13; The Assam Rifle Act 2006, S. 20 and S. 159; The Airports Economic Regulatory Authority Act 2011, s.50; The Pension Fund Regulatory and Development Authority Act 2013, S. 55; Lokpal and Lokayuktas Act 2013, S. 57; The Rights of Persons with Disabilities Act 2016, S. 96. 80 Frequently Asked Questions (n 11) 81 Trutuf Safety Glass Industries (n 52) 82 P.V Neelakandan Nair (n 53) 83 Pelzer (n 24) 5. 84 [1971] AIR SC 1331. In this case, the Supreme Court referred to an amendment which was rejected by the Constituent Assembly with respect to (draft) Article 164 in order to ascertain the meaning of that Article as enacted in the Constitution of India 1950. 85 Ibid. See also, Abhiram Singh (n 31). 86 Constitution of India 1950, art 226, 226. Power of High Courts to issue certain writs.— (1) Notwithstanding anything in article 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. 87 Constitution of India 1950, art 32, 32. Remedies for enforcement of rights conferred by this Part.— (1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed. (2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto, and certiorari, whichever may be appropriate, for the enforcement of any of the rights conferred by this Part. 88 Frequently Asked Questions (n 11), refer to answers to questions numbered 8 and 9. 89 ibid, refer to answer to question 8. 90 212th Report (n 1) 19. 91 ‘Convention on Supplemental Damage for Nuclear Damage Article by Article Analysis’ (U.S Department of State) www.state.gov (16 November 2017). 92 Trutuf Safety Glass Industries (n 52) [17]. See also, P.V Neelakandan Nair (n 53). 93 K Tokeley (n 9) 974–975; Daniel A. Farber, (n 8) 1412. See also, FH Easterbrook, ‘The Absence of Method in Purposive Interpretation’ (2017) 84 (1) The University of Chicago Law Review 81. 94 Frequently Asked Questions (n 11), refer to answer to question numbered 8. 95 212th Report (n 1) 16. 96 Trutuf Safety Glass Industries (n 52) [17]. See also, P.V. Neelakandan Nair (n 53). © The Author(s) 2018. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

Journal

Statute Law ReviewOxford University Press

Published: Apr 10, 2018

There are no references for this article.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create lists to
organize your research

Export lists, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off