Step 2: Ironing out liability law worries

The general framework agreement signed on Monday between French nuclear major AREVA and Nuclear Power Cooperation of India Limited (NPCIL) bring to the fore issues — including differences over the liability law —that need to be ironed out before the commercial contract can be sealed.

The general framework agreement signed on Monday between French nuclear major AREVA and Nuclear Power Cooperation of India Limited (NPCIL) bring to the fore issues — including differences over the liability law —that need to be ironed out before the commercial contract can be sealed.

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The pact for implementation of European pressurised reactors (EPR) at Jaitapur in Maharashtra was inked along with intergovernmental framework agreements on nuclear cooperation, in the presence of PM Manmohan Singh and French President Nicholas Sarkozy.

Addressing a joint point conference, Prime Minister Manmohan Singh said, “The framework agreement has been signed... There are issues with regard to technical matters including pricing. These are subject matters of negotiations.”

The French have been concerned over whether the domestic liability law was consistent with international norms governing the liability regime such as the ones enshrined in the Vienna convention. Suppliers’ liability clauses in the Indian law are primary concerns.

The statement to emphasises on further discussions. “Following India’s enactment of a civil nuclear liability legislation, both countries stand ready to further exchange views on this issue so as to ensure the appropriate framework for the sound development of their cooperation,” it said.

For a commercial contract with firms such as Areva, India has to also sign a framework pact with Japan. Japanese companies have a monopoly over many reactor components, including the vessels (a cylinder that contains nuclear fuel. Sources said differences over liability have to be sorted out before finalising on the pricing.