LIBOR Cessation, Implied Terms & Alternative Reference Rate: English High Courts Decides

LIBOR cessation is one of the most important issues in commercial law in the recent times. With trillions of dollars with contracts indexed to LIBOR and its recent cessation, it is important that courts world over deal with it in a fair manner. This article may be looked at for how international arbitral tribunals have dealt with LIBOR cessation.

Recently, the English Court in Standard Chartered plc v. Guaranty Nominees Limited, [2024] EWHC 2605 (Comm) has dealt with the issue. As has been noted in the aforementioned Some jurisdictions provided legislative solutions by prescribing the alternative reference rate through statute or delegated legislation. In some jurisdictions, courts read in an implied term of alternative reference rate. Standard Chartered plc v. Guaranty Nominees Limited decided by the English High Court is an example of the latter approach. Here, the English Court decided that where the three month USD LIBOR ceased or was incapable of operation, a reasonable alternative rate to it was an implied term.

The crucial question is how should courts (and arbitral tribunals) arrive at the alternative reference rate. Standard Chartered provides some guidance on the criteria:

• such rate is to be based on “robust underlying market”;
• while determining such alternative reference rate, courts should “have regard to the liquidity of that underlying market over time, market functioning issues, usefulness to all market participants and the ability to produce and maintain the alternative rates…”
• Such rate should “be able to test the rate by reference to historical data…”;
• It should “consider resilience to changing market conditions, structures and regulations; placing weight on the diversity of market participants, the stability of their participation and their credit quality over time; how changes in participation could affect the benchmark; the transparency of the benchmark and the need for an ongoing ability to assess the rate’s quality…”According to the court, such a rate was the “CME Term SOFR and adding the ISDA Spread Adjustment”.

The decision of the English High Court provides important guidance on two aspects. One, on the legal basis for implying a term on alternative reference rate to 3 months USD LIBOR, and two, determination of the alternative reference rate. 

In House Counsels as Judicial Members in Tribunals such as NCLT and NCLAT

 Please refer to the recent decision of the Hon'ble Supreme Court of India in SBI v. The Consortium of Mr. Murari Lal, 2024 INSC 852, where it has been held:

"183. The Members often lack the domain knowledge required to appreciate the nuanced complexities involved in high-stake insolvency matters in order to properly adjudicate such matters. It has been noticed that the benches of NCLT(s) and NCLAT don’t have the practice of sitting for the full working ours. They are particularly lacking in the capacity to manage the growing number of cases and giving undivided attention required in such matters. There are serious issues in the manner in which the insolvency matters are listed. There is no effective system in place before the NCLTs for urgent listings."

Since liberalisation and globalisation, and after the advent of national law schools, there has been a considerable expansion in the legal profession. One such set of legal professionals are the in house counsels. They are not just legal professionals but also combine as excellent management professionals.

Unfortunately, the Indian legal system has not been able to tap this excellent resource for selection in tribunals and courts. On the one hands higher courts such as High Courts and Supreme Court keep complaining about the lack of professionalism in the tribunal members but on the other hand, excellent and well-qualified professionals are, it is understood, not eligible for being appointed as judicial members of tribunals. It appears as per the current state of law that they are at the most eligible for appointment as technical members.

In this background, the following two solutions could possibly be considered: One, In house counsels could be considered for selection as technical members, in the short run, so that the tribunals are equipped with people who understand not only the mechanics of law but also of business, and two, in the long run, the relevant statutes/ rules can be amended to enable appointment of in house counsels as judicial members of such tribunals.

Govt. Tries to find a Way Around the Atomic Energy Act

In two previous posts in this blog, here and here, we discussed the exclusivity provided by the Atomic Energy Act, 1962 to the Central Government and Central Government Companies to harness atomic energy in India. In the Budget Speech for the FY 2024-25, the finance minister announced that the Union Government would partner with the private sector for establishing Bharat Small Reactors (BSR), which are basically SMRs or Small Modular Reactors. The relevant portion of the budget speech reads as under:

“75. Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat. Towards that pursuit, our government will partner with the private sector for (1) setting up Bharat Small Reactors, (2) research & development of Bharat Small Modular Reactor, and (3) research & development of newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector.” (emphasis added).

This announcement comes in the wake of Section 14(1) of the Atomic Energy Act which prohibits a direct role by the private sector in the Indian atomic energy industry.

The Government seems to have worked a way out for allowing private participation: the nuclear plant will be operated by the Nuclear Power Corporation of India (NPCIL) but the funding and the land will be provided by private players. It remains to be seen whether the private players will have a share of the revenue. These plants, it has been suggested, could replace or substitute captive power plants. A news item about this development can be accessed from here. 

Supreme Court Dismisses Challenge to Atomic Energy Act

The Supreme Court of India has dealt with an important matter of contemporary relevance: atomic energy in India. This post addresses the recent decision of the Supreme Court in Sandeep TS v. Union of India, Writ Petition(s)(Civil) No(s).564/2024: Order dt. 17.09.2024: SCI. 

A writ petition was filed early this year by one Mr. Sandeep TS, a physicist and an Indian citizen residing in the USA. The writ petition was filed under Article 32 of the Constitution of India raising a grievance against the Atomic Energy Act, 1962 (“Atomic Energy Act”) as it allegedly restricted, unduly, the involvement of private parties in licensing for nuclear energy.

The matter came up before a three judge Bench consisting of the Hon’ble Mr. Chief Justice DY Chandrachud, Hon'ble Mr. Justice J.B. Pardiwala, and Hon'ble Mr. Justice Manoj Misra. The three judge Bench referred to the Long Title of the Atomic Energy Act and Section 14 thereof.

The Long Title to the Atomic Energy Act reads: “An Act to provide for the development, control and use of atomic energy for the welfare of the people of India and for other peaceful purposes and for matters connected therewith.”

Section 2(1)(g) defines the term “prescribed substance” as “any substance including any mineral which the Central Government may, by notification, prescribe, being a substance which in its opinion is or may be used for the production or use of atomic energy or research into matters connected therewith and includes uranium, plutonium, thorium, beryllium, deuterium or any of their respective derivatives or compounds or any other materials containing any of the aforesaid substances;”

Section 14 of the said Act provided for the following:

• Central Government may make rules relating to control over production and use of atomic energy.
• Central Government may prohibit except under a licence activities prescribed in Section 14(1), including the acquisition, production, possession, use, disposal, export or import of a prescribed substance, etc.
• A licence for the acquisition, production, possession, use, disposal, export or import of any plant designed or adopted or manufactured for the production, development and use of atomic energy or for research into matters connected therewith can only be given to a Department of the Central Government or any authority or an institution or a corporation established by the Central Government, or a Government company.
• A licence granted to a Government company under Section 14(1) would stand cancelled when such company ceases to be a Government company.
• The extent of rule making power of the Central Government under this provision.

So, when the petitioner challenged the Atomic Energy Act as unduly restrictive, the Supreme Court rejected the challenge on the following grounds:

• The Parliament has introduced the Atomic Energy Act for a calibrated exploitation of atomic energy and subjected it to strict safeguards considering the adverse effects of misuse or accident.
• Hence, this Act cannot be considered as arbitrary or as interfering with the Petitioner’s fundamental rights.

Accordingly, the three Judge Bench of the Supreme Court dismissed the petition filed under Article 32 of the Constitution. 

Followers of this blog may recollect a post titled "Small Modular Nuclear reactors in India: Liberalisation of Regime & Way Forward last year where we highlighted the same issue. The Supreme Court in this case rightly dismissed the petition since this is a matter for the Legislature to take a call.

Section 29A Arbitration Act & Time Limit for Filing Application

Section 29A(1) of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") in its relevant portion states: 

"(1)The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23..."

If the award is not made within this period or an extension period (of up to six months) agreed between the parties, the mandate of the arbitrator "shall terminate". The exception to this termination is where prior to or after expiry of that period, the Court extends such period. This extension is to be granted by the court on an application made by a party and for sufficient cause. Once the application for extension is filed, the mandate of the arbitrator is to continue till disposal of the application.  

In Rohan Builders v Berger Paints, 2024 INSC 686 (Rohan Builders), the question decided the important question of whether an application for extension of time u/s 29A could be filed after the expiry of the period specified in S. 29A(1) (i.e., 12 months from completion of pleadings).

The court had to construe Section 29A(4), which, in its relevant part provides:

"(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period..."

Taking note of this provision, the court held that it could be deduced from this "unambiguous language" that the Court could extend the time "where an application is filed after the expiry of the period". (Para 7). Note this the provision quoted does not explicitly talk about the application being filed after the expiry- it only deals with the power of the court to extend the period after its expiry.

The court also noted that if either party took no action, "the arbitration proceedings are terminated". (Para 10). However, this does not mean that if no application is filed within 12 months or the extended six months period (u/s 29A(3)), the mandate of the arbitrator would terminate or that the arbitrator would become de jure incapable of performing her function. Construing the effect of "terminate" in 29A(4), the Supreme Court held:

"The word “terminate” in the contextual form does not reflect termination as if the proceedings have come to a legal and final end, and cannot continue even on filing of an application for extension of time." (Para 12).

Hence, the termination contemplated in S. 29A(4) is not an "absolute" termination (Para 12). The court reasoned that if a rigid construction of the provision was made, that would amount to legislating a limitation period judicially, which was not "conspicuously" stated by the provision. (Para 13). The court also noted that "the expression and intent of the provision are to the contrary." (Para 13).

The court also gave an ex post facto justification for its construction: if a rigid construction was given to the provision, it would mean more frequent applications and interventions by courts, and worse, re-commencing the arbitration once again, which would only impede arbitration (para 14).

The court stated that this construction would not encourage rogue litigants who would be bent on making the time limit for award inconsequential since the court could, on sufficient cause alone, extend the time limit, and can also impose time limits. The SC was also conscious that in the process of application u/s 29A, the court could substitute the arbitrators, thereby eliminating the need for going through another round of appointment process or S. 11 proceedings. 

Interestingly, the court also made it clear that the arbitral tribunal could not pass the award till an application u/s 29A(5) is filed before the court. Even if the award is passed, the court could invoke its powers u/s 29A. The court held:

"Therefore, the arbitral tribunal may not pronounce the award till an application under Section 29A(5)of the A & C Act is sub-judice before the court. In a given case, where an award is pronounced during the pendency of an application for extension of period of the arbitral tribunal, the court must still decide the application under sub-section (5), and may even, where an award has been pronounced, invoke, when required and justified, sub-sections (6) to (8), or the first and third proviso to Section 29A(4) of the A & C Act." (Para 17)

In conclusion, the court answered the question before it in the following manner: 

"... an application for extension of the time period for passing an arbitral award under Section 29A(4) read with Section 29A(5) is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be. The court while adjudicating such extension applications will be guided by the principle of sufficient cause and our observations in paragraph 15 of the judgment." (Para 19).

Nine Judge Bench of SCI in Mineral Area Development Authority v SAIL, 2024 INSC 554: Summary

One of the most important matters in the recent times has been decided by a nine-judge bench of the Hon’ble Supreme Court in Mineral Area Development Authority v. SAIL, 2024 INSC 554. It deals with the important issue of the distribution of legislative powers between the Union and the States as regards taxation of mineral rights. It also decided on the nature of royalty insofar as it is applicable to minerals.

The issue of royalty came into play in the context of its classification. It royalty is classified as a tax, prior decisions have held that State legislatures lacked competence to levy taxes on mineral rights as they were dealt with under Entry 54, List I, VII Schedule, where Union had the exclusive competence. Some decisions held that royalty was not tax and therefore the State legislatures were competent to make laws further to Entry 49, List II, VII Schedule, where States had the exclusive competence. This conflict is the subject of decision of the nine judge Bench of the Supreme Court.

Initially, about 11 questions were recorded by a three judge Bench as having to be determined. During the hearing before the nine judge Bench, there was consensus between the counsels for the Petitioners and the Respondents as to the questions that were to be determined by the nine judge-Bench. Union of India filed an affidavit stating that Entry 53, List I, Schedule VII which related to mineral oils/ petroleum/ oil fields, was not covered in the issues before the court. So, the Supreme Court did not discuss these aspects in the decision. The questions to be determined reduced from 11 to merely five. Of the nine judges, Justice Ms. Nagaratna dissented. The majority view was penned by Chief Justice Mr. Chandrachud.

The court’s ultimate determination vis-à-vis these questions as contained in Para 342 of the Majority judgment is provided below:

Question a. What is the true nature of royalty determined under Section 9 read with Section 15(1) of the MMDR Act? Whether royalty is in the nature of tax;

Finding:

“a. Royalty is not a tax. Royalty is a contractual consideration paid by the mining lessee to the lessor for enjoyment of mineral rights. The liability to pay royalty arises out of the contractual conditions of the mining lease. The payments made to the Government cannot be deemed to be a tax merely because the statute provides for their recovery as arrears;”

b. What is the scope of Entry 50 of List II of the Seventh Schedule? What is the ambit of the limitations imposable by Parliament in exercise of its legislative powers under Entry 54 of List I? Does Section 9, or any other provision of the MMDR Act, contain any limitation with respect to the field in Entry 50 of List II?

c. Whether the expression “subject to any limitations imposed by Parliament by law relating to mineral development” in Entry 50 of List II pro tanto subjects the entry to Entry 54 of List I, which is a non-taxing general entry?  Consequently, is there any departure from the general scheme of distribution of legislative powers as enunciated in M P V Sundararamier (supra)?

Determination: “b. Entry 50 of List II does not constitute an exception to the position of law laid down in M P V Sundararamier (supra). The legislative power to tax mineral rights vests with the State legislatures. Parliament does not have legislative competence to tax mineral rights under Entry 54 of List I, it being a general entry. Since the power to tax mineral rights is enumerated in Entry 50 of List II, Parliament cannot use its residuary powers with respect to that subject-matter;”

c. Entry 50 of List II envisages that Parliament can impose “any limitations” on the legislative field created by that entry under a law relating to mineral development. The MMDR Act as it stands has not imposed any limitations as envisaged in Entry 50 of List II;

d. The scope of the expression “any limitations” under Entry 50 of List II is wide enough to include the imposition of restrictions, conditions, principles, as well as a prohibition;

d. What is the scope of Entry 49 of List II and whether it covers a tax which involves a measure based on the value of the produce of land? Would the constitutional position be any different qua mining land on account of Entry 50 of List II read with Entry 54 of List I?

e. Whether Entry 50 of List II is a specific entry in relation to Entry 49 of List II, and would consequently subtract mining land from the scope of Entry 49 of List II?”

Determination: “f. The yield of mineral bearing land, in terms of the quantity of mineral produced or the royalty, can be used as a measure to tax the land under Entry 49 of List II. The decision in Goodricke (supra) is clarified to this extent;

g. Entries 49 and 50 of List II deal with distinct subject matters and operate in ifferent fields. Mineral value or mineral produce can be used as a measure to impose a tax on lands under Entry 49 of List II;

h. The “limitations” imposed by Parliament in a law relating to mineral development with respect to Entry 50 of List II do not operate on Entry 49 of List II because there is no specific stipulation under the Constitution to that effect;”

Prior Decisions: “i. The decisions in India Cement (supra), Orissa Cement (supra), Federation of Mining Associations of Rajasthan (supra), Mahalaxmi Fabric Mills (supra), Saurashtra Cement (supra), Mahanadi Coalfields (supra), and P Kannadasan (supra) are overruled to the extent of the observations made in the present case.”

The minority judgment of Justice Ms. BV Nagarathna held that royalty was in the nature of a tax, that Sections 9, 9A and 25 of the Mines and Minerals (Development and Regulation) Act, 1957 denuded/ limited the scope of Entry 50, List II and that taxes on lands and buildings contemplated taxes directly levied on the land as a unit and did not include mineral bearing lands within its scope. The minority judgment recognized that Entry 50, List II was the only entry in Lists I and II which subjected the taxing power of the States to limitations imposed by the Parliament by law relating to mineral development.

The Supreme Court Observer (SCO) has an excellent page on the decision, providing links to the hearing transcripts and prior decisions. Link to SCO page on the case is here. Happy reading!

Bankers Thinking Twice about Funding the Nuclear Surge

 Oil Price published an interesting and important news report on April 14 regarding how bankers were not willing to fund the nuclear surge world over, especially the target to triple nuclear power by 2050. It appears that bankers view the sector with considerable pessimism owing to its project risks. The Vice-President of the European Investment Bank is reported to have stated that heavy state involvement is required to make projects bankable.

So what are the implications of these from a legal point of view? How could India create a legal environment for addressing these problems? If and when India opens up the nuclear sector for private players, especially for Small and Modular Reactors, the following aspects could be thought about:

• Permitting unincorporated joint ventures to build, transfer and operate nuclear power plants, similar to petroleum exploration and production, which is also a high risk venture.
• Use of standard forms such as FIDIC and other similar forms, which will take a balanced approach.
• Effective dispute resolution through conciliation, Dispute Adjudication/ Avoidance Boards, and arbitration.  
• Designing effective insurance policies to cater to risks, etc.

All these require development of expertise in India and it is important for law universities and government institutions to play a crucial role in the next decade in developing that expertise.

Hydrogen Hubs in India: Recent Regulatory Developments

The Ministry of New & Renewable Energy (MNRE) came up with the National Green Hydrogen Mission (NGHM) in January 2023, which aimed: "to provide a comprehensive action plan for establishing a Green Hydrogen ecosystem and catalysing a systemic response to the opportunities and challenges of this sunrise sector." The NGHM recognised India's Net Zero Target of 2070 but also underscored another important but relatively less talked about target: Energy Independence by 2047. The NGHM stated that green hydrogen was seen as playing a critical role in achieving these objectives.

For the uninitiated green hydrogen refers to hydrogen produced by electrolysis using renewable energy. There are other types of hydrogen depending on the emission the process of manufacture gives out. See here, for information on such other types of hydrogen. 

Hydrogen Hubs in the NGHM

The NGHM recognises that transportation of hydrogen would be a challenge, both technically and logistically, and therefore provides for cluster production, which would have the following features:

• Large scale production in a given area;
• Utilisation of the produced hydrogen also in the given area;

The NGHM contemplates development of clusters where there are refineries/ fertilizer plants and where pilot projects for application of hydrogen in areas such as steel production, ports development, mobility, etc. would be promoted.

The Mission also contemplates infrastructure for storage and deliver of green hydrogen, port infrastructure for export of derivatives of green hydrogen, pipelines for bulk transportation, coordinated financing, etc.

Scheme for Setting up Hydrogen Hubs, 2024

Further to the Mission, MNRE recently came up with a Scheme for setting up of hydrogen hubs with the following objectives:

"(i) To identify and develop regions capable of supporting large-scale production and/or utilization of Hydrogen as Green Hydrogen Hubs. 

(ii) Development of Green Hydrogen Projects inside the Hubs in an integrated manner to allow pooling of resources and achievement of scale 

(iii) Enhance the cost-competitiveness of Green Hydrogen and its derivatives vis-a-vis fossil-based alternatives 

(iv) Maximize production of Green Hydrogen and its derivatives in India within the stated financial support 

(v) Encourage large-scale utilization and exports of Green Hydrogen and its derivatives 

(vi) Enhance viability of Green Hydrogen assets across the value chain." (Para 3)

The Scheme contemplates the core infrastructure in hydrogen hubs, including Storage and transportation facilities for Green Hydrogen/its derivatives, Development/ upgradation of pipeline infrastructure, Green Hydrogen powered vehicle re-fuelling facility, Hydrogen compression and/or liquefaction technologies, as required, and so on (Para 2). 

The Scheme recognises the plan to set up two hydrogen hubs by 2025-26 and a budget outlay of about Rs. 200 crores.

Features of Hydrogen Hub under the Scheme

 

The Scheme contemplates a hydrogen hub with the following salient features:

• Hydrogen hubs will cater to domestic demand as well as to exports
• The hub will have a network of producers, users and supporting infrastructure
• Development of hydrogen infrastructure would have to be done in a coordinated manner and by pooling resources from the Central Govt., State Govt., Local Govt. and the industry
• A hydrogen hub should have a planned/announced capacity of a minimum of 1,00,000 MTPA. Higher production capacity would get more priority under the Scheme.
• Infrastructure, projects and resources would be mapped under the PM Gati Shakti.
• Recognition of hydrogen hubs by MNRE in other places is possible but without financial assistance.

Evaluation Criteria for Proposals

The Scheme recognises that detailed evaluation criteria would be provided in the Call for Proposals and would be based on the following:

Funding

Rs. 100 crores (Central Financial Assistance) per hydrogen hub would be allocated in order to support core infrastructure in the following manner and would be released on the basis of conditions detailed in the Call for Proposals:

Provisions regarding failure to utilise grants or complete the project would be mentioned in the Call for Proposals.

A Steering Committee (overall monitoring of scheme) and a Project Appraisal Committee (project review) will be constituted. MNRE would nominate Scheme Implementing Agencies (SIAs) to implement the Scheme and hydrogen hubs.

Comments

It would be interesting to see how the Call for Proposals shape up and how hydrogen hubs would be created. The timelines contemplated (2025-26) is very tight. Interesting times ahead for renewables and energy security in India.

Comment on India’s Statement at Nuclear Energy Summit Brussels 2024

On 21.03.2024, an important summit related to nuclear energy was held in Brussels. On behalf of India, Dr. Ajit Kumar Mohanty, Chairman, Atomic Energy Commission & Secretary, Department of Atomic Energy, delivered India's statement. This statement represents India's approach so far and in the near future regarding nuclear energy. This short post comments on India's statement in the summit.

India's Commitment to Net Zero and Role of Nuclear Energy

The statement noted India's commitment to Net Zero emissions by 2070. Towards this aim, the statement noted, India's has taken steps to increase the share of nuclear power capacity.  [The current share of nuclear power to total capacity is at about 1.6%, (6.7 GW- as on May 2023) as per this information of the Ministry of Power.] 

As per the statement, India aims to tiple nuclear power energy capacity by 2030 from 7.5GW presently, [that is, to 22.5 GW]. 

India's Views Towards Nuclear Power

The statement noted the Government of India's belief that nuclear power was "clean and environment-friendly" and is available 24x7 and was capable of providing energy security in the long term in a sustainable manner. 

The statement noted that it was "imperative" that the Indian nuclear power programme grew in order to ensure energy security and sustainable development.

India's Current Projects

The statement notes that India has recently added 700 MW Pressurized Heavy Water Reactors (PHWR), the Kakrapar Atomic Power Project – Unit 3 & 4 and nine more reactors are under construction. The statement also notes that the Government has accorded administrative approval for ten such reactors to be set up in fleet mode.

Recent Innovations

The statement also made mention about India's recent highlights regarding nuclear energy. It mentioned that India entered the important second stage of the three stage nuclear power programme through "Core Loading" which took place in India's first indigenous FBR, that is, Fast Breeder Reactor (500 MWe). 

The statement also made mention of  the Government's thought process that the Government is considering development of Small Modular Reactors and is in discussions with foreign companies for the expansion of India's nuclear programme. 

India's Commitment as regards Nuclear Energy

The statement records India's commitment "to full international civil nuclear cooperation" and "to  peaceful applications of nuclear technology, both in power and non-power sector, while ensuring the security of nuclear and radiological materials".

The statement concludes by stating:

"India has a robust nuclear safety culture and impeccable safety record. India will continue to support the [International Atomic Energy] Agency in its efforts to provide a robust, sustainable and visible global nuclear safety and security framework."

Comment

As regards the statement that India is in discussions with foreign companies regarding the expansion of India's nuclear programme, a recent newspaper report suggests that Rosatom, Russia's state atomic energy company, was in talks with India for development of Small Modular Reactors.

One more important aspect requires some explanation: the three stage nuclear process that India's statement refers to. India has substantial thorium resources and this programme is aimed to harness those resources.

Stage I: Use of PHWR- Pressurised Heavy Water Reactors and natural Uranium 238 (U-238), with traces of U-235, as the fisssile material. On fission, this would produce Plutonium- 239 (Pu-239) + energy.

Stage II: In stage II, Pu-239 will be used along with U-238 through Fast Breeder Reactors (FBR), which. apparently produces more nuclear fuel than it consumes. The recent core loading event at India's first indigenously built Prototype FBR in Kalpakkam (500 MWe) marks India's entry into the second phase. On fission, this would produce U-233 and more Pu-239.

Stage III: In the third stage, Pu-239 will be combined with Thorium-232 (which is in abundance in India) to produce energy + U-233.

This three stage programme was envisaged by Homi J Bhabha and presented in 1954 in the conference on "Development of Atomic Energy for Peaceful Purposes" and was later adopted by the Government in 1958.

India's statement in the Nuclear Summit can be accessed from here.

India's Planning to Attract Private Investment in Nuclear Sector to the Tune of US$ 26 Billion

In a major development, the print media reports that India is in talks with various private firms to attract investment to the tune of US$ 26 billion in the nuclear sector, in order to produce electricity from sources that do not produce carbon emissions. India plans to increase the percentage of contribution by non-fossil fuel sector in electricity generation. The current contribution of the nuclear sector and other sectors towards electricity generation is given below:

Installed Power Generation Capacity (2023)
Particulars	Installed Capacity (MW)	Percentage
Fossil Fuel	2,37,269	57%
Renewable Energy	1,73,619	41%
Nuclear Power	6,780	2%

 India now seeks to increase this 2%. News reports also suggest that the Government has been in talks with Reliance Industries, Tata Power, Adani Power and Vedanta to contribute about $ 5.30 billion each for investments in the nuclear sector. India is no exception: a substantial number of countries are looking at the nuclear option to meet their Net Zero commitments.

From a legal perspective, there might be a need to modify the present regulatory structure of nuclear energy in order to attract private investments (see, for instance, here). The increased focus on nuclear energy presents important opportunities, albeit long term, for law firms. Specialisation in nuclear power regulation, contracts relating to nuclear power plants, etc. will go a long way in catering to the potential market. Likewise, legal education in India could also focus on nuclear energy law, as this post notes.

"A Employee" and the Employee's Compensation Act, 1923

The Workmen's Compensation Act, 1923 was amended in 2009 through the Workmen's Compensation (Amendment) Act, 2009. One of the main purposes of the amendment was to make the said law applicable to all categories of employees and to bring about a gender neutral term. 

For that purpose, the Short Title to the Act was changed to "Employee's Compensation Act, 1923" instead of "Workmen's Compensation Act, 1923". The term "workman" and "workmen" were replaced with "employee" and "employees". To do so, Section 5 of the Workmen's Compensation (Amendment) Act, 2009 provided:

"5. Throughout the principal Act, for the words "workman" and "workmen", wherever they occur, the words "employee': and "employees" shall respectively be substituted, and such other consequential amendments as the rules of grammar may require shall also be made." (emphasis added).

In effect, Section 5 stated that wherever the term" workman" occured, it should be substituted with "employee" and corresponding grammatical changes would also be made. For instance, if the phrase "a workman relinquishes" it would have to be changed to "an employee relinquishes" although Section 5 of the the Workmen's Compensation (Amendment) Act, 2009 calls for substitution of the term "workman" with "employee".

Unfortunately, we see in the Employee's Compensation Act, 1923, as is uploaded in the India Code website that the consequential grammatical changes were not made although "workman" was substituted with "employee". Some examples of this situation is provided in the table below:

Section	Text of the Statute
2(1)(e)	“when the services of a [employee] are temporarily lent or let on hire”
2(1)(g)	“earning capacity of a [employee] in any employment”
2(1)(l)	“incapacitates a [employee] for all work which he was capable of performing”
2(1)(m)	“paid by the employer of a [employee]”

 The Act is replete with such errors in various other provisions. This requires correction.

India Postpones Bringing Into Effect the Digital Personal Data Protection Framework

 India enacted the Digital Personal Data Protection Act, 2023 ("DPDPA" or "Act") and the statute has been published in the Official Gazette. The Act along with the regulatory framework is yet to be brought to force. Section 1(2) of the Act reads:

"(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision."

The Central Government is yet to notify the date on which the provisions of the Act would come into force. 

From media reports (here and here), it initially appeared that the Government was making rules and the same would be published and the regulatory framework would be brought into effect by January 2024. However, media reports now (here and here) suggest that the Government has postponed its decision to make the Act and the regulatory framework effective to post-elections, which are generally held in the months of April/ May. 

European Data Protection Board's Coordinated Enforcement Framework

The EU EDPB (European Data Protection Board) came up with a Coordinated Enforcement Framework (CEF) in 2020 with the objective of facilitating joint actions among Supervisory Authorities under the EU General Data Protection Regulation, 2016.

The objective of the CEF was to facilitate joint actions among supervisory authorities in a coordinated manner. The legal basis of the CEF is contained in Article 61(1) read with Article 57(1)(g) of the GDPR. Article 61(1) reads:

"Supervisory authorities shall provide each other with relevant information and mutual assistance in order to implement and apply this Regulation in a consistent manner, and shall put in place measures for effective cooperation with one another. Mutual assistance shall cover, in particular, information requests and supervisory measures, such as requests to carry out prior authorisations and consultations, inspections and investigations."

Article 57(1)(g) states: 

"1. Without prejudice to other tasks set out under this Regulation, each supervisory authority shall on its territory: ...

(g) cooperate with, including sharing information and provide mutual assistance to, other supervisory authorities with a view to ensuring the consistency of application and enforcement of this Regulation;" 

Article 62, which deals with joint operations of supervisory authorities is also relevant for this purpose. Article 62(1) provides: "The supervisory authorities shall, where appropriate, conduct joint operations including joint investigations and joint enforcement measures in which members or staff of the supervisory authorities of other Member States are involved."

The role of EDPB is captured in Article 70(1)(u) of the GDPR, which states:

"1. The Board shall ensure the consistent application of this Regulation. To that end, the Board shall, on its own initiative or, where relevant, at the request of the Commission, in particular:...

(u) promote the cooperation and the effective bilateral and multilateral exchange of information and best practices between the supervisory authorities;"

These provisions form the legal basis for the CEF, which is basically a structure for coordinating recurring annual activities of the Supervisory Authorities under the GDPR through the EDPB. 

On the CEF, the EDPB Document states: "The objective of the CEF is to facilitate joint actions in the broad sense in a flexible but coordinated manner, ranging from joint awareness raising and information gathering to an enforcement sweep and joint investigations." (Para 5).

Why is the CEF important? The ultimate aim is compliance with GDPR and protection of rights and freedoms. The CEF reduces risks of compliance in wake of new technologies in data protection.

The CEF works in the following way:

In 2022, the EDPB picked the role of Data Protection Officers for its 2023 Study. Now EDPB has come up with the report on the designation and position of Data Protection Officers, which can be accessed from here. The 2022 study was on use of cloud-based services by the public sector.

For 2024, the topic has been chosen by the EDPB in October 2023, which relates to the implementation of the right of access by controllers.

India & Pakistan Exchange List of Nuclear Installations under 1988 Agreement

 It has been widely reported in the news media (see, for instance, here and here) that India and Pakistan have exchanged a list of nuclear installations further to a Press Release by the Ministry of External Affairs, Government of India. The Press Release notes that the exchange of lists was pursuant to an agreement which was signed on 31.12.1988, which came into force on 27.01.1991. Since then, the Release notes, both countries have exchanged lists 33 times (including the present one). This short post discusses the Agreement, known as India Pakistan Non-Attack Agreement, and the title of the Agreement is "Agreement between India and Pakistan on the Prohibition of Attack Against Nuclear Installations and Facilities". The Non-Attack Agreement was signed in Islamabad, Pakistan.

The Non-Attack Agreement is a short one consisting of three articles. The Preamble to the Agreement recognises both countries' "commitment to durable peace and the development of friendly and harmonious bilateral relations; conscious of the role of confidence building measures in promoting such bilateral relations based on mutual trust and goodwill..."

Article 1(ii) defines "nuclear installation or facility" as including "nuclear power and research reactors, fuel fabrication, uranium enrichment, iso-topes separation and reprocessing facilities as well as any other installations with fresh or irradiated nuclear fuel and materials in any form and establishments storing significant quantities of radio-active materials." Thus, the definition is comprehensive where fresh or irradiated nuclear fuel or material in any form is used.

Article 1(i) contains the "Non-Attack" clause and states: "Each party shall refrain from undertaking, encouraging or participating in, directly or indirectly, any action aimed at causing the destruction of, or damage to, any nuclear installation or facility in the other country."

Article 2 is the one which has led to parties exchanging the list of such installation/ facility. It obligates India and Pakistan to exchange lists of the latitude and longitude of nuclear installations/ facilities on the 1st January of each calendar year and includes changes in the latitude/ longitude, perhaps covering extensions/ contractions of such installations/ facilities. The language used is: "Each Contracting Party shall inform the other on 1st January of each calendar year of the latitude and longitude of its nuclear installations and facilities and whenever there is any change."

Article 3 concerns ratification. It states: "This Agreement is subject to ratification. It shall come into force with effect from the date on which the Instruments of Ratification are exchanged." 

At the end of the Agreement, there is an interpretation clause. Although the Agreement is purported to be in Urdu, Hindi and English, it provides that the English text would govern in case of disputes in interpretation. It states: "Done at Islamabad on this Thirty-first day of December 1988, in, two copies each in Urdu, Hindi and English, the English text being authentic in case of any difference or dispute of interpretation."

The Non-Attack Agreement can be downloaded from here.