TNAG-0950-FCO40-1169-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 191

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DSR 11C

(c) By placing strict liability on the operating company,

(d)

5.

with the PRC, Hong Kong and UK Governments standing

behind it, it might be possible to exempt British

suppliers from their normal liability for damages

arising from fault of design, equipment or operation.

However this exemption should not extend to non- British suppliers unless their governments were similarly prepared to accept some residual third party

liability. Otherwise they should be liable in the

normal way. In practice this should mean that those

primarily liable to pay compensation should have a

Non-British right of recourse against the suppliers when fault on their part can be proved;

The liability would exist only as long as Hong Kong

and the New Territories remained the responsibility

of the UK and outside the control of the PRC.

If liability is to be shared, the way this is to be

achieved will need to be expressed in some form of agreement

between the UK and the PRC. In theory this might be

achieved by inducing the PRC to accede to the relevant

convention, and modifying their application as between the

PRC and Hong Kong by bilateral agreement. But this is

somewhat cumbersome. Moreover the PRC may not wish to

accede and existing members may not wish to accept their

accession. It would appear to be simpler to incorporate

the main elements of the conventions, modified as described

above, into a self-contained bilateral agreement. Such an

agreement would be likely to be necessary even if neither

HMG nor the Hong Kong Government accepted any liability,

to establish Hong Kong rights to compensation from the PRC.

Conclusions

6.

There is no compelling logical or legal reason why HMG

should assume any third party liability in respect of the

Guangdong project beyond those which it already has under

international convention and which arise solely from the

provision of fuel. To the extent that HMG might put up risk capital, it would thereby accept some liability, but

this would be limited to the value of its investment.

But

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/the