1. Introduction

Nuclear liability law determines who must bear the financial consequences when a nuclear incident causes death, personal injury, property damage, environmental harm or economic loss. Because nuclear accidents can produce widespread and long-term consequences, ordinary tort principles based on proving negligence are generally considered inadequate. Modern nuclear-liability regimes therefore rely on no-fault or strict liability, channeling of liability to the operator, mandatory financial security, statutory compensation mechanisms and government-backed supplementary compensation.

Internationally, the principal frameworks include the 1963 Vienna Convention, the Paris Convention of 1960, the Joint Protocol of 1988, and the Convention on Supplementary Compensation for Nuclear Damage (CSC). The common architecture is operator liability without requiring proof of fault, exclusive or concentrated liability, financial security and limitations on liability. (IAEA Publications)

India has recently undergone a major legislative transition. The Civil Liability for Nuclear Damage Act, 2010 (CLND Act) has been replaced by the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (SHANTI Act). The SHANTI Act received Presidential assent in December 2025, and the Government has stated that its civil-liability provisions establish a graded liability structure. (Department Of Atomic Energy)

2. Meaning of Nuclear Liability

Nuclear liability refers to the legal responsibility arising from nuclear damage caused by a nuclear incident.

Its principal objectives are:

Prompt compensation to victims.

Avoiding the difficult requirement of proving negligence.

Ensuring that an identifiable entity—the operator—is responsible for initial compensation.

Ensuring that operators maintain insurance or other financial security.

Providing government funding when damage exceeds the operator's statutory liability.

Facilitating international compensation where an accident has transboundary consequences.

Balancing victim protection with the financial feasibility of operating nuclear installations.

Thus, nuclear liability law is simultaneously a branch of tort law, environmental law, public law, insurance law and international nuclear law.

3. Core Principles of Nuclear Liability

A. No-Fault or Absolute Liability

Under the international nuclear-liability model, the victim generally does not have to establish negligence by the operator. The claimant principally establishes the connection between the nuclear incident and the damage.

The IAEA describes the traditional nuclear-liability regime as based on absolute liability, exclusive operator liability, minimum liability amounts, financial security and limitation periods. (IAEA Publications)

This is important because proving precisely how a reactor accident occurred may be extremely difficult for an individual victim.

B. Channeling of Liability

Liability is generally channelled to the operator of the nuclear installation.

Instead of requiring an injured person to sue numerous contractors, manufacturers, engineers and suppliers, the system creates a single principal defendant—the operator.

This simplifies access to compensation.

C. Mandatory Financial Security

Operators are required to maintain insurance or other financial security to meet their liability.

This converts liability from merely a legal obligation into a financially supported compensation mechanism.

D. Limitation of Liability

Nuclear statutes commonly establish a maximum operator liability.

This differs from the Indian constitutional doctrine of absolute liability discussed below. Absolute/no-fault liability concerns the basis on which liability arises; a statutory cap concerns the amount that the operator must pay.

That distinction is particularly important under India's present SHANTI framework.

4. International Nuclear Liability Regimes

A. Vienna Convention

The Vienna Convention on Civil Liability for Nuclear Damage establishes the classic international model.

Its major characteristics include:

liability without proof of fault;

operator liability;

compulsory financial security;

limitations on liability;

special rules concerning nuclear material in transit;

rules governing jurisdiction and applicable law.

The 1997 Protocol modernised the Vienna system and broadened the concept of compensable nuclear damage. (IAEA Publications)

B. Paris Convention

The Paris Convention on Third Party Liability in the Field of Nuclear Energy, developed under the OECD framework, similarly concentrates liability on the nuclear operator.

The Paris and Vienna systems are connected through the Joint Protocol, which helps prevent situations where victims fall between the two liability regimes because of differences in treaty membership. (IAEA Conferences)

C. Convention on Supplementary Compensation

The CSC creates a supplementary international compensation mechanism.

Its significance is that compensation can extend beyond the primary amount available under national operator liability and financial security arrangements.

The IAEA explains that the CSC is intended to create a broader global liability framework and includes an international fund to supplement compensation available for nuclear damage. (IAEA Publications)

5. India's Nuclear Liability Framework

A. Civil Liability for Nuclear Damage Act, 2010

The CLND Act introduced a specialised statutory framework for nuclear accidents.

Its stated purpose was to provide civil liability and prompt compensation through a no-fault regime while channelling liability to the operator. (India Code)

Under the 2010 framework:

the operator was primarily liable;

liability was imposed without requiring proof of fault;

operators had to maintain insurance or financial security;

the Central Government bore liability beyond the operator's statutory amount in specified circumstances;

claims could be processed through a Claims Commissioner and Nuclear Damage Claims Commission.

The former Act's operator-liability framework included different amounts depending upon the nuclear installation, while the maximum liability for each incident was linked to 300 million Special Drawing Rights (SDRs), subject to the statutory mechanism. (Indian Kanoon)

6. SHANTI Act, 2025 — Present Framework

The SHANTI Act, 2025 now constitutes the principal Indian statutory framework for nuclear liability. The Department of Atomic Energy lists the Act as part of India's current nuclear legislation. (Department Of Atomic Energy)

The Act repealed the earlier CLND Act and introduced a new liability structure.

A. Operator Liability

Section 11 makes the operator liable for nuclear damage caused by a nuclear incident.

Where multiple operators are liable and the damage attributable to each cannot be separated, the Act provides for joint and several liability, subject to the statutory limit. (DailyLaw.ai)

B. Graded Liability

One of the most significant changes is the graded operator-liability system.

These amounts are contained in the Second Schedule. (Press Information Bureau)

The distinction is important: ₹3,000 crore is the maximum operator liability for the largest category, not necessarily the maximum compensation potentially available from the entire statutory compensation architecture.

7. Central Government Liability

Section 14 provides a second layer of compensation.

The Central Government becomes liable where:

damage exceeds the operator's statutory liability;

the incident occurs in a Central Government-owned nuclear installation; or

specified extraordinary circumstances trigger government responsibility.

The Government may also establish a Nuclear Liability Fund to meet its statutory liability. (DailyLaw.ai)

The Act also permits additional measures if compensation exceeds the overall statutory amount, including seeking resources under the CSC. (Press Information Bureau)

This creates a layered structure:

Operator → Central Government → supplementary international compensation

8. Insurance and Financial Security

Operators must obtain insurance or another form of financial security covering their statutory nuclear liability before operating the installation.

The purpose is to ensure that an award of compensation is not merely a paper judgment but is supported by financial resources. (CRF India)

This principle is fundamental to nuclear-liability law because ordinary commercial insurance markets may be insufficient to absorb catastrophic nuclear risks.

9. Compensation Mechanism

The SHANTI Act establishes an institutional mechanism for victims.

A person suffering nuclear damage can seek compensation through the statutory claims process. The Claims Commissioner invites claims and adjudicates them; a Nuclear Damage Claims Commission may deal with wider or more complex claims. (PolicyIndex)

Claims can cover categories such as:

death;

personal injury;

property damage;

specified economic losses;

environmental restoration;

preventive measures undertaken following a nuclear incident.

The Act also provides territorial jurisdiction for nuclear damage occurring within India and, in specified circumstances, damage occurring outside India as a consequence of a nuclear incident in India. (DailyLaw.ai)

10. Right of Recourse Against Suppliers

An important distinction between the 2010 and 2025 frameworks concerns supplier liability.

The earlier CLND Act expressly allowed an operator, in specified circumstances, to recover compensation from a supplier—for example, where defective equipment or material contributed to the nuclear incident.

The SHANTI Act substantially narrows this recourse. Section 16 principally recognises recourse where it is expressly provided for in a written contract or where the incident results from an intentional act designed to cause nuclear damage. (CRF India)

Therefore, the new framework places much greater emphasis on operator-centered liability.

11. Exceptions to Operator Liability

Nuclear liability does not operate without statutory exceptions.

The SHANTI framework excludes specified situations, including nuclear damage resulting directly from:

a grave natural disaster of an exceptional character;

armed conflict;

hostility;

civil war;

insurrection; or

terrorism.

Certain damage to the nuclear installation itself and specified property or transport is also treated separately under the statutory scheme. (Gazette Tracker)

12. Important Indian Case Laws

1. M.C. Mehta v. Union of India — Oleum Gas Leak Case

M.C. Mehta v. Union of India, (1987) 1 SCC 395 / AIR 1987 SC 1086

This is perhaps the most important Indian case for understanding the constitutional background of hazardous-activity liability.

The Supreme Court developed the doctrine of absolute liability for enterprises engaged in hazardous or inherently dangerous activities. The Court held that such an enterprise owes an absolute and non-delegable duty to the community and must compensate for harm caused by the hazardous activity, even where reasonable care had been exercised. (Indian Kanoon)

Relevance to nuclear liability

Nuclear installations are inherently hazardous activities. Therefore, the case provides a powerful constitutional and environmental-law background against which statutory nuclear-liability legislation is examined.

However, one must distinguish the judicial doctrine from a statutory nuclear-liability regime: Parliament can establish a specialised compensation structure containing specific rules concerning operators, insurance, government liability and compensation procedures.

2. Union Carbide Corporation v. Union of India / Bhopal Litigation

The Bhopal Gas Disaster litigation is also highly relevant, although it did not concern a nuclear accident.

In Charan Lal Sahu v. Union of India, the Supreme Court considered the statutory representation and compensation framework created following the Bhopal disaster. The Court recognised the significance of absolute liability principles in the context of hazardous industrial activity. (Indian Kanoon)

Relevance

Bhopal demonstrates the practical difficulties of:

mass claims;

transnational defendants;

enormous numbers of victims;

environmental damage;

determining appropriate compensation;

administering compensation through a centralised mechanism.

These are precisely the problems that specialised nuclear compensation statutes attempt to address.

3. Indian Council for Enviro-Legal Action v. Union of India

The Supreme Court's environmental jurisprudence has developed the Polluter Pays Principle as part of Indian environmental law.

The principle is significant for nuclear liability because it raises a fundamental question:

Should the ultimate economic cost of a nuclear accident be borne by the entity benefiting from the hazardous activity, or by the State and ultimately the public?

This issue has become particularly significant under the SHANTI Act because operator liability is statutorily capped and the Central Government assumes liability beyond the operator's prescribed amount.

4. G. Sundarrajan v. Union of India

G. Sundarrajan v. Union of India concerned challenges surrounding the Kudankulam Nuclear Power Project.

The Supreme Court addressed issues involving nuclear safety, environmental protection, emergency preparedness and the legal framework surrounding nuclear power development. The litigation specifically discussed the Civil Liability for Nuclear Damage Act and challenges to its constitutional validity. (Indian Kanoon)

Importance

The case demonstrates that nuclear liability cannot be separated from:

nuclear safety;

environmental impact;

emergency preparedness;

radioactive-waste management;

constitutional rights;

inter-generational environmental concerns.

13. E.A.S. Sarma v. Union of India — Current SHANTI Act Litigation

A particularly important development is the constitutional challenge to the SHANTI Act.

In E.A.S. Sarma v. Union of India, W.P. (C) No. 240/2026, petitioners have challenged provisions concerning nuclear liability, supplier responsibility, regulatory independence and related constitutional issues.

As of September 2026, the case remains pending before the Supreme Court. The Supreme Court Observer records the next hearing for 14 October 2026. (Supreme Court Observer)

On 17 August 2026, the Supreme Court sought clarification from the Union Government on whether the SHANTI Act prevents constitutional courts from determining fair and just compensation following a nuclear accident. The Court also sought clarification concerning the statutory framework governing appointment of AERB members. (Live Law)

This is legally significant because it raises the unresolved question of the relationship between:

statutory compensation ceilings
and
constitutional judicial power to grant appropriate remedies for violations of fundamental rights.

No final ruling on the constitutional validity of the challenged provisions had been issued as of the latest available September 2026 case-status information. (Supreme Court Observer)

14. Absolute Liability vs Statutory Nuclear Liability

A useful examination distinction is:

Thus, absolute liability and nuclear statutory liability should not be treated as identical concepts.

15. Major Legal Issues

A. Adequacy of Compensation

The central issue is whether statutory limits are sufficient to compensate victims following a catastrophic accident.

B. Victim Protection vs Industry Development

A nuclear-liability regime must simultaneously ensure:

credible victim compensation;

availability of insurance;

investment certainty;

technological development;

public safety.

C. Supplier Accountability

The reduction of statutory supplier recourse under SHANTI creates an important legal question concerning responsibility for defective equipment.

D. Environmental Damage

Nuclear accidents can cause damage extending beyond immediate personal injury into land contamination, ecosystem damage and long-term environmental restoration.

E. Latent Injury

Radiation-related injury may manifest years after exposure. Consequently, limitation periods are particularly important.

F. Constitutional Remedies

The pending E.A.S. Sarma litigation makes the interaction between statutory compensation limits and constitutional remedies an important contemporary question. (Supreme Court Observer)

16. Relationship With Environmental Law

Nuclear liability operates alongside constitutional and environmental principles including:

Article 21 — right to life and environmental protection;

Polluter Pays Principle;

Precautionary Principle;

Public Trust Doctrine;

Sustainable Development;

Inter-generational Equity.

The Supreme Court's hazardous-industry jurisprudence therefore provides the broader legal environment within which nuclear-liability statutes operate.

17. Critical Evaluation

The modern nuclear-liability model represents a compromise between two competing objectives.

On one side is victim protection: nuclear accidents can create catastrophic losses that ordinary tort litigation cannot efficiently address.

On the other side is financial predictability: unlimited exposure may make insurance, financing and construction of nuclear facilities difficult.

The SHANTI Act responds through a graded operator-liability model, government-backed residual liability and possible supplementary international compensation. The Government has described this as alignment with international nuclear-liability principles. (Press Information Bureau)

At the same time, the pending Supreme Court proceedings demonstrate that important constitutional questions remain concerning the relationship between statutory caps, supplier liability and the power of constitutional courts to award appropriate compensation. (Live Law)

18. Conclusion

Nuclear liability and compensation regimes are designed around the principle that victims of nuclear incidents should not have to undertake ordinary, complex negligence litigation to obtain compensation. International nuclear law consequently developed operator-centered, no-fault liability supported by insurance, financial security and government or international supplementary compensation.

In India, the CLND Act 2010 created the earlier specialised framework, while the SHANTI Act 2025 has now introduced a graded operator-liability system ranging from ₹100 crore to ₹3,000 crore depending upon the installation, with additional Central Government responsibility and a potential international compensation layer. (Press Information Bureau)

The jurisprudential foundation remains strongly influenced by M.C. Mehta's absolute-liability doctrine, the Bhopal litigation, environmental principles and the nuclear-safety jurisprudence developed in G. Sundarrajan. The current E.A.S. Sarma litigation makes nuclear compensation an especially important contemporary constitutional issue because the Supreme Court is examining whether statutory limits can restrict constitutional courts' ability to determine fair and just compensation. (Indian Kanoon)

In essence, nuclear liability law attempts to reconcile three objectives: victim compensation, operator accountability, and the financial sustainability of nuclear energy.