NS "SAVANNAH"-EXECUTIVE AGREEMENTS WAIVING SOVEREIGN IMMUNITY AND LIMITATION OF SHIPOWNER'S LIABILITY

The purpose of section 170 (1) of the Atomic Energy Act, as amended (Aug. 8, 1954, 68 Stat. 921; 42 U.S.C. 2210 (1)), authorizing the Atomic Energy Commission to enter into indemnification agreements for public liability in connection with the operation of the NS Savannah, was to remove any possible impediments to the operation of the ship and to provide adequate protection to the public. It is consistent with such purpose and with the provisions of the Suits in Admiralty Act, as amended (March 9, 1920, sec. 7, 41 Stat. 527; 46 U.S.C. 747), for the Secretary of State in connection with foreign voyages of the NS Savannah to enter into Executive Agreements whereby the United States as owner-operator of the vessel undertakes to waive sovereign immunity and shipowner's limitation of liability in actions against the United States in foreign courts seeking damages which might arise from any nuclear incident involving the vessel.

THE SECRETARY OF COMMERCE.

NOVEMBER 30, 1960.*

CHAIRMAN, ATOMIC ENERGY COMMISSION.

DEAR SIRS: I have your joint letter requesting my opinion regarding certain questions involved in the operation of the NS Savannah, the nuclear-powered merchant vessel presently under construction. You inform me that the Savannah is a vessel owned by the United States and will be operated by the Maritime Administration. The questions involved relate to the entry of the Savannah into foreign ports.

You state that negotiations have been held with various countries and that those with the United Kingdom have progressed to the point where tentative agreement for the entry of the Savannah has been reached, but that, as a condition to entry, the United Kingdom has proposed that the United States as owner-operator of the Savannah agree (1) to consent to suit in the courts of the United Kingdom in the event of a nuclear incident causing damage to nationals of the United Kingdom, and (2) not to attempt in any such suit to *Released for publication May 23, 1966.

limit liability of the United States by application of the maritime limitation acts of either country. It further appears that in the foreign countries concerned there presently is in force, or it is anticipated there will be enacted, legislation imposing absolute liability on the part of a nuclear shipowner and a ten-year limitation upon the time within which suits for damage arising from a nuclear incident may be brought.

You ask my opinion as to whether international commitments by the United States of the nature described would be "inconsistent" with our own laws concerning amenability of the United States to suit and limitation of liability in maritime litigation. It is your view that no such inconsistency exists and, in addition, that the commitments would be consistent with the intent of Congress, as reflected in Public Law 85-602 (August 8, 1958, 72 Stat. 525), a special statute relating to the Savannah. The statute amends the Atomic Energy Act of 1954 (August 8, 1954, c. 1073, 68 Stat. 921), as amended, in the following respects: (1) It amends section 170 of the act so as to authorize the Atomic Energy Commission to enter into an indemnification agreement in an amount not exceeding $500 million with any person engaged in the construction, maintenance, or use of the Savannah to cover "public liability" claims arising from a nuclear incident in connection therewith, 42 U.S.C. 2210(1); (2) it amends section 11 o. of the act, to define the term "nuclear incident," for the purpose of section 170 1. only, to cover occurrences outside the United States, 42 U.S.C. 2014(o); (3) it amends section 170 e. so as to provide for enforcement in a Federal district court of "the limit of liability" in instances where the incident occurs outside the United States, 42 U.S.C. 2210(e). This limit of liability refers to the aggregate liability of $500 million plus the amount of financial protection required of the licensee, as established by the terms of section 170 e.1

1 The text of Public Law 85-602, supra, reads as follows: "That section 110. of the Atomic Energy Act of 1954, as amended, is amended by substituting a colon for the period at the end thereof and adding the following: 'Provided, however, That as the term [nuclear incident] is used in subsection 170 1., it shall mean any such occurrence outside of the United States rather than within the United States.'

"Sec. 2.

Section 170 of the Atomic Energy Act of 1954, as amended,

Construction of the Savannah was authorized in 1956. Act of July 30, 1956, c.792, 70 Stat. 731, 46 U.S.C. 1206. The act provided for the appropriation to the Department of Commerce, Maritime Administration, and the Atomic Energy Commission, of such sums as might be necessary for the con

is amended by adding at the end thereof the following new subsections (sic):

"1. The [Atomic Energy] Commission is authorized until August 1, 1967, to enter into an agreement of indemnification with any person engaged in the design, development, construction, operation, repair, and maintenance or use of the nuclear-powered ship authorized by section 716 of the Merchant Marine Act, 1936, and designated the 'nuclear ship Savannah.' In any such agreement of indemnification the Commission may require such person to provide and maintain financial protection of such a type and in such amounts as the Commission shall determine to be appropriate to cover public liability arising from a nuclear incident in connection with such design, development, construction, operation, repair, maintenance or use and shall indemnify the person indemnified against such claims above the amount of the financial protection required, in the maximum amount provided by subsection e. [42 U.S.C. 2210(e)] including the reasonable costs of investigating and settling claims and defending suits for damage.

"Sec. 2 (sic). Section 170 e. of the Atomic Energy Act of 1954, as amended, is amended by deleting the second sentence thereof and inserting in lieu thereof the following: "The Commission or any person indemnified may apply to the appropriate district court of the United States having venue in bankruptcy matters over the location of the nuclear incident, except that in the case of nuclear incidents caused by ships of the United States outside of the United States, the Commission or any person indemnified may apply to the appropriate district court of the United States having venue in bankruptcy matters over the location of the principal place of business of the shipping company owning or operating the ship, and upon a showing that the public liability from a single nuclear incident will probably exceed the limit of liability imposed by this section, shall be entitled to such orders as may be appropriate for enforcement of the provisions of this section, including an order limiting the liability of the persons indemnified, orders staying the payment of claims and the execution of court judgments, orders apportioning the payments to be made to claimants, orders permitting partial payments to be made before final determination of the total claims, and an order setting aside a part of the funds available for possible latent injuries not discovered until a later time.'"

The first sentence of section 170 e. reads as follows:

"The aggregate liability for a single nuclear incident of persons indemnified, including the reasonable costs of investigating and settling claims and defending suits for damage, shall not exceed the sum of $500,000,000 together with the amount of financial protection required of the licensee or contractor."

struction of a nuclear-powered merchant ship "capable of providing shipping services on routes essential for maintaining the flow of the foreign commerce of the United States." The vessel will also serve to demonstrate to the world the President's Atoms for Peace Program. Construction of the Savannah is nearing completion and it is anticipated that the vessel will be fully operational early in 1961.

In connection with Public Law 85-602, the Joint Committee on Atomic Energy, after pointing out that the Savannah would be owned and operated "under contract to the United States Government," stated that it had been advised "of the possible indemnity problems" arising out of its construction and operation, and that "[iln order to remove any possible roadblocks in the operation of the ship and in order to provide adequate protection to the public," it recommended that the provisions of the "Atomic Energy Commission Indemnity Act" (act of September 2, 1957, Public Law 85-256, 71 Stat. 576, 42 U.S.C. 2210) 2 should be extended to cover the Savannah. S. Rept. 1883, 85th Cong., 2d sess., p. 2 Nevertheless, it appears that the foreign countries involved feel that their problems in relation to the Savannah are not adequately met by Public Law 85-602.

You advise me that pursuant to the authority provided by Public Law 85-602 the Atomic Energy Commission has executed an agreement of indemnification with the Maritime Administration, the operator of the Savannah. The claimed inadequacy of the statute in its relation to the operation of the ship abroad appears to stem from the fact that it does not in terms preclude the United States as owner-operator of the Savannah from asserting as a sovereign state that the United States is immune from suit in a foreign court or from claiming the benefit of limitation of liability laws.

The Legal Adviser of the Department of State informs me that it is his opinion that, if there is no Federal legislation inconsistent with entry into commitments of the character specified by the United Kingdom, "constitutional precedents indicate that the President may enter into such commitments

2

1 This act provides for indemnification by the Atomic Energy Commission of licensees operating domestic nuclear installations against public liability claims. As indicated above, the maximum amount of such indemnification for a single nuclear incident is $500,000,000.