- The Hyde Act: The Prelude

The Hyde Act: A critical exposition in the context of the 123 Agreement

By Shiva Kant Jha

[This author intends to examine critically the provisions of the Hyde Act of the USA to comprehend the implications of the 123 Agreement between the USA and India. This exposition would be done by dividing it into 4 segments under distinct captions: (a) the Prelude; (b) the Provisions; (c) the Implications; and (d) the Evaluation.]

The Hyde Act: The Prelude: A Brief Overview

(An Aspect of the 123 Agreement)
Part X(a)

The preamble to the 123 Agreement between the USA and India sets forth a set of objectives including desire to “establish the necessary legal framework and basis for cooperation concerning peaceful uses of nuclear energy”. The Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 provides the legal basis for the 123 Agreement under which ‘the U.S. will provide access to civilian nuclear technology and access to nuclear fuel in exchange for IAEA -safeguards on civilian Indian reactors.' This Act is a landmark statute as it grants certain exceptions from the strict regime of the US Atomic Energy Act of 1954 which is, to say in the words of the US Nuclear Regulatory Commission, "the fundamental U.S. law on both the civilian and the military uses of nuclear materials." As some exceptions are to be allowed from the Atomic Energy Act, and also from the Nuclear Non-proliferation regime, the Hyde Act was enacted.

This Agreement is conceptually different from ‘a treaty' within the meaning of Art VI (2) of the US Constitution which contemplates an approval by the Senate by a special majority (‘the two thirds of the Senators present concur'). This 123 Agreement is an executive Agreement with the approval of the Congress. This Agreement intersects on the legislative fields of the Congress, and it also detracts from certain existing enactment. It is correct that under the Article VI (2) of the U.S. Constitution international treaties acquire the status of a sovereign law. But nothing turns on this.. It calls for two observations: first, as the 123 Agreement is not a treaty in the US Constitutional sense, it cannot get the status of a treaty to which Art VI (2) of the Constitution refers; second, assuming arguendo that it is a treaty within the meaning of the said Article, the treaty itself makes its terms subservient to specific exclusions and overridings through specific treaty-terms. The subservience of the 123 Agreement is comprehensive as it subjugates the Agreement not only to the existing domestic law also to the law yet to be made. If our negotiators would have been less carefree they would have persuaded the US Government to ratify the Indo-US Agreement as a treaty under its constitutional provenance.

It is worth noting that there was a lot of controversy going on in the USA: whether the Uruguay Round Agreements concluded under the auspices of the General Agreement on Tariffs and Trade (the "GATT") must be ratified as a treaty; or it may constitutionally be adopted by the passage of implementing legislation by both Houses of Congress, together with signing by the President. Professor Tribe argued that there existed, for constitutional purposes, "a discrete subset of international agreements properly categorized as treaties.” Walter  Dellinger, the then Assistant Attorney General, pointed out in his opinion: “Like other recent trade agreements, including NAFTA, the United States-Canada Free Trade Agreement, the United States-Israel Free Trade Agreement and the Tokyo Round Agreement, the Uruguay Round Agreements may constitutionally be executed by the President and approved and implemented by Act of Congress.” As the Uruguay Round Final Act encompassed aspects which ex facie would come both under the Congressional power under its broad Foreign Commerce Clause, and the Presidential power to discharge his constitutional responsibility for conducting the Nation's foreign affairs, the procedure adopted per the suggestion of Dellinger was preferred. The 123 Agreement is also a species of the same genus because at the heart of the matter is international trade as per the principles of neo-liberal economics (vide Art. 4 of the 123 Agreement). Besides it deserves to be noted that under the US jurisprudence any general test for determining, whether any given agreement should be considered a treaty, is yet to be evolved. No court has pronounced on it. Hence, there is much scope for crystal-gazing on this point. . India will have, if the Deal goes ahead, to rough it out in future disputes and litigations.

As under the US law a subsequent treaty prevails over the prior statute, the effect of the 123 Agreement sans the grant of statutory override would be that its provisions would prevail over the existing prior law ( and to say the obvious the law to be made). The US government excluded this possibility by specifically subjecting the Agreement to the domestic legal regime by making specific provisions in the 123 Agreement:

(i)“The Parties shall cooperate in the use of nuclear energy for peaceful purposes in accordance with the provisions of this Agreement. Each Party shall implement this Agreement in accordance with its respective applicable treaties, national laws, regulations, and license requirements concerning the use of nuclear energy for peaceful purposes.” [Art. 2(1)]

(ii) This Agreement does not require the transfer of any information regarding matters outside the scope of this Agreement, or information that the Parties are not permitted under their respective treaties, national laws, or regulations to transfer. [Art 3(3)]

(iii) “……Transfers of dual-use items that could be used in enrichment, reprocessing or heavy water production facilities will be subject to the Parties' respective applicable laws, regulations and license policies.

The US Supreme Court has upheld in Reid v. Covert (1957) the primacy of the Constitution over all treaties. Under it's the US the Executive government has no "hip-pocket" of unaccountable powers. In Hamdan v . Rumsfeld (decided on   June 29, No. 05-184. 2006) the US Supreme Court said: ‘Court's conclusion ultimately rests upon a single ground: Congress has not issued the Executive a "blank check."' So far the relationship inter se treaties and other federal laws is concerned, relevant provisions under the US law are well-settled:

(1) If a State legislation conflicts with a treaty, the latter prevails.

(2) If a Federal legislation conflicts with a prior treaty, the legislation prevails.

(3) If a Federal legislation conflicts with a subsequent self-executing treaty,

The treaty prevails.

The US gives specific override on treaty terms to its laws. The Congressional enactment of the Uruguay Round Final Act provided that nothing in the Final Act could transgress the federal statutes. It is to be noted that the 123 Agreement itself gives an override not only to the US statutes, but also to other treaties having bearing on the points relevant to the subject matter in the 123 Agreement which stipulates in clear words its subservience to the domestic laws and treaties.


Much is being made with reference to the Article 16(4) of the 123 Agreement, which states that “this agreement shall be implemented in good faith and in accordance with the principles of international law”. It is said that it states a well-known principle of international law. The preamble to the Vienna Convention on the Law of Treaties states this principle clearly when it says: “Noting that the free consent and of good faith and the pucta sunt servanda rule are universally recognized”; and Art 31(1) of the said Convention, laying down the rules of interpretation, says: “A treaty shall be interpreted in good faith….”. As customary international law is an integral part of domestic jurisprudence, except when it goes counter to the domestic law and the constitution, it is normally given effect judicially in all common law jurisdictions. While reading this provision the following points should not be lost sight of:

(a) Art 16 (4) of the 123 Agreement, which says “this agreement shall be implemented in good faith and in accordance with the principles of international law”, occurs in the article under the heading ‘Entry into force and duration'. Hence the words have limited reference; and we should not put a gloss on it in away that it brings the entire jurisprudence of international law through backdoors.

(b) It is well settled that the customary international law can always be overridden by specific treaty-terms. All the common law countries accept this. And the 123 Agreement modifies the principle of customary international in specific terms. If despite this express exclusion something of customary international law can be made to creep through it terms, we would be inviting the hazards of future litigation. Every student of law knows that the principle of customary international law, unless it is so fundamental as to be treated jus cogens , can always be modified or overridden by specific treaty terms. The provision under the U.S.-China Agreement, which stipulates that the parties to the Agreement will observe “the principle of international law that provides that a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty,” is surely a reiteration of the principle of customary international law, but it operates only to the extent its operation is not excluded or modified by a treaty. And in the Indo-US 123 Agreement, its exclusion and modification are specifically set forth.

(d) Nothing is salvaged by an implied reference to the Vienna Convention on the Law of Treaties. It is really funny to read this Convention into the 123 Agreement when the United States has not become party to it. The USA is in the habit of exculpating and exempting itself from many international treaties: one is these is this.. But to think that it matters little, as the Vienna Convention is a statement of customary international law, is to commit a gross error on two counts:

(i) Opinions of experts are divided whether the Vienna Convention is a restatement of customary international law. The U K and Canada considered the Vienna Convention a codification of customary international law. In Cudd Pressure Control Inc. v R (1995) 95 D.T.C. 559 at 565 the court observed: “It is generally accepted that the Vienna Convention on the Law of Treaties codifies previously existing public international law.” But after a careful examination an expert has observed:

“Whether the Vienna Convention is declaratory of customary international law has been doubted by some—see, e.g., material referred to Edwardes-Ker, “TTT” para 3. 16; K. Vogel, “ Double Tax Treaties and their Interpretation” (1986) 4 Intl. Tax & Bus. Lawyer 1 at 15. The better view is perhaps that the Vienna Convention was declaratory of customary international law but also went beyond customary law in certain respects.”

To think that what is expressly stated in the 123 Agreement stands diluted by what can be implied through an over stretched and spacious reasoning is a gross mistake fraught with grave consequences, more so when we shall be pitted against the global hegemone which considers international law a mere instrument of it policy.

(ii) Whatever be the view on the above point, we cannot chase wool on specious pleadings by putting on blinkers when the clear and categorical words of the 123 Agreement stare at us.

It is wrong to hold that ‘once the 123 Agreement is ratified by Congress, it will be regarded as the “last expression of the sovereign will”; and, hence, overrides all other laws including national laws.' It is to be noted that a subsequent treaty prevails over a prior statute. But the terms of the 123 Agreement presents a different picture. The treaty, when done, would operate under its own mandate subject to the domestic laws and relevant treaties done at international plane with the third States. It is wrong to say that the 123 Agreement would override all domestic laws as this would be a consequence of the exercise of sovereign power of the State. In fact, this error emanates from not knowing what sovereignty means under a constitutional polity creating organs of governance under constitutional limitations with granted powers. Oppenheim is correct in saying that sovereignty is “… primarily a matter of internal constitutional power and authority, conceived as the highest, underived power within the state with exclusive competence therein”.

It is further to be noted that the constitutional status of the 123 Agreement in India and the USA would differ. In the USA the 123 Agreement would be a self-executing, and would be operative as part of the law of the USA which prevails over a customary international law norms. This would be so as the Agreement would be made operational under an enactment. In India it will be merely an executive act which cannot go counter to our laws, and which cannot prejudicially affect the rights and interests of our people coming within our domestic jurisdiction. This author would illustrate it: our Atomic Energy Act, 1962 as amended by the Atomic Energy (Amendment) Act, 1986 will have to be amended, or, better still, we may have to frame an independent statute, on the analogy of the Hyde Act itself.. It is appropriate to consider the congruence of several Sections in our Act with the 123 Agreement read in the context of the Hyde Act which has some vital referents to the US Atomic Energy Act 1954. Attention is drawn to the following provisions of our Act to highlight contradictions, and ambiguities inter se the Act and the Agreement. Vide Sections2. 1(b); 3; 8; 11; 14; 17; 18(1), 30, and 31. Section 31 very crisply says: “The provisions of this Act shall be binding on Government.” Rules to be framed are to be placed before Parliament [Section 30 (4)). Many of the provisions under 123 Agreement will have great domestic impact. This would require Parliamentary enactment.

But what is shocking is our government's habit of presenting a fait accompli before our Parliament to embarrass and coerce it to implement an international Agreement. Its classic example may be mentioned by this author by quoting a paragraph from his book The Judicial Role in Globalised Economy : “After the ratification of the Final Act of Uruguay Round of GATT negotiations, our Government came under an obligation to implement the various agreements incorporated in the Final Act. The Trade Related Aspects of Intellectual Property Rights (TRIPS ) was implemented by amending various IPR Laws to make them conform to the treaty obligations. Our Parliament found itself up against a fait accompli. Our sovereign Parliament got subjected to the servitude of the overweening exogenous forces. It worked under a crypto-psychic pressure, if not under a psychosis, of the breach of international obligations, which could not only embarrass our country in the comity of nations, it could even expose the country to sanctions. Those who had brought about this situation had brave words to blabber, but others found themselves in a Kafkaesque no-exit situation. This mood was evident in the speeches made in both the Houses of Parliament when the Patents (Second Amendment Bill) was under consideration. Whilst Pranab Mukherjee excused the unequal treaty as it was begotten in an unequal world, Manoj Bhattacharya was quite outspoken in his sublime wrath. With an iron in his soul he said in the Rajya Sabha:

“This is a very complicated Bill and this does not concern only today, nor does it concern only the immediate tomorrow, but it concerns the years to come. And it concerns the interests of all the under-developed countries and all developing countries, to whom we must show that India will provide leadership in all manner”.

“One thing transpired, that there is an element of helplessness; they are trying to plead that we are in a helpless condition, that we cannot do it because we are already a member of the WTO, we are already committed we are already in the trap; and so we cannot come out of that trap, and for that only we have to effect these changes to the already existing very, very good and very, very progressive Indian Patents Law of 1970”.

“Kindly forgive me for saying so, the multi-national corporations work only to amass super-profits”….

Whilst all these happened, our leaders, the press and other opinion-makers were over busy with the inane trivialities of self-seeking politicking. Never had such an indifference ever been shown by a democratic country when it had sufficient presentiment of a strange tsunami creeping fast to overtake it. This plight of the nation takes mind again to the days of the Nawab of Awadh when, whilst the imperial forces were on his head, the Nawab was playing with pigeons. I recall someone writing about a person who played chess in his portico unmindful of the fact that inside the house he was being robbed and his wife raped!”

As this Prelude has become quite longish, the author must put an end to it. But he would like to mention a point which he would develop later, that a Parliamentary approval must be obtained if democracy is to survive in our country. The taming of the Executive is a serious problem. I would end the first section of “the Hyde Act: its Exposition” with a quotation from Macbeth :

And oftentimes, to win us to our harm,
The instruments of darkness tell us truths,
Win us with honest trifles, to betray's
In deepest consequence. - Links on Shivakantjha - Links on Shivakantjha

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