A Victory in Water Arbitration

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A Victory in Water Arbitration

Pakistan secures victory at the Permanent Court of Arbitration

Osman Khan

In July, Pakistan won a major international victory when The Hague-based Permanent Court of Arbitration (PCA) accepted Pakistan’s position that it had the competence to determine a dispute between India and Pakistan regarding the change of designs in Kishanganga and Ratle hydroelectric plants by India while rejecting India’s objection to the assumption of jurisdiction by the international forum. Deciding in favour of Pakistan, the PCA ruled that it was indeed the competent authority to determine the Kishanganga dispute bet­ween Pakistan and India. The PCA ruling came after a lingering legal battle between the two neighbours who, apart from water-sharing, are locked in a string of land and sea disputes, including Jammu and Kashmir. The PCA’s unanimous decision, binding and without appeal, not only reaffirms Pakistan’s position but also sends a clear message to India: you cannot trample upon the rights of your neighbours with impunity.

On July 06, Pakistan’s unwavering pursuit of justice against its arch-rival India on the issues of the 330-megawatt Kishanganga and the 850MW Ratle hydroelectric projects, which have long been a source of contention between the two nuclear rivals, bore fruit when the Permanent Court of Arbitration (PCA) in The Hague declared Pakistan’s case – the international court has “competence to determine” the dispute over changes in the designs of the Kishanganga and the Ratle hydroelectric plants by India – admissible, giving stunning blow to India’s arrogance, reckless disregard for international law and its insatiable thirst for dominance in the South Asian region. The court dismissed New Delhi’s objection to the global justice body’s jurisdiction over the issue.
The Issue
Pakistan and India share the waters of six rivers under the Indus Waters Treaty, a water-sharing agreement brokered by the World Bank in 1960. Under the agreement, the waters of the eastern rivers – the Sutlej, Beas and Ravi – have been allocated to India, while those of the three western rivers – the Indus, Jhelum and Chenab – go to Pakistan. However, since the conclusion of this treaty, both countries have been arguing over the hydroelectric projects on the Indus River and its tributaries. Pakistan accuses India of “continuously” violating the treaty by building dams on the western rivers, whereas New Delhi thinks Islamabad controls more water than New Delhi as a result of the treaty.
The recent dispute pertains to concerns raised by Pakistan over India’s construction of the 330-megawatt Kishanganga project on the Jhelum River and plans to build 850MW Ratle hydroelectric project on the Chenab River in Indian Illegally Occupied Jammu and Kashmir (IIOJK) – India, in a blatant violation of this treaty, started working on the Kishanganga project in 2007 and the Ratle project in 2012. Pakistan complains that India’s construction of these plants poses a genuine threat to its water supply, potentially reducing water flows by 80 percent.
The legal battle
Pakistan’s concerns regarding the construction of the Kishanganga and Ratle projects were repeatedly raised, but India callously brushed them aside, fuelling the flames of this legal battle. Pakistan exhausted all diplomatic channels and attempted bilateral dialogue, only to be met with India’s obstinate refusal to address legitimate grievances. After Pakistan’s concerns, which were raised before the Permanent Indus Commission in 2006 for the Kishanganga project, and in 2012 for the Ratle project, remained unaddressed, the country approached the court in 2007 when the water supply to the country was affected. Pakistan then sought a resolution through government-level talks, held in New Delhi in July 2015.
The Indus Waters Treaty provides for two forums for settlement of disputes: (i) the Court of Arbitration, which addresses legal, technical and systemic issues, or (ii) the Neutral Expert, which can address only technical issues. Annexure D of the IWT specifically mentions the conditions and technical details that India is required to uphold while constructing hydroelectric power projects on the western rivers, including adherence to run-of-river design. Pakistan requested the establishment of a Court of Arbitration, because it had systemic questions requiring legal interpretation. India responded to Pakistan’s initiation of the formal dispute settlement process with its own belated request for the appointment of a neutral expert, which Islamabad maintained was a demonstration of New Delhi’s characteristic bad faith.
Fearing conflicting outcomes from two parallel processes, the World Bank on Dec 12, 2016, suspended the processes for the establishment of a court of arbitration or the appointment of a neutral expert and invited both countries to negotiate and agree on one forum. Pakistan and India could not, however, agree and the World Bank, after six years — during which India completed the construction of the Kishanganga project — finally lifted the suspension and created a court of arbitration and appointed a neutral expert.
The recent quest for justice
The most recent episode in this long legal battle between the two nations began in January 2023 to address concerns raised by Pakistan over the controversial designs of two hydropower projects being constructed on the Jhelum and Chenab rivers. In the proceedings before the PCA, Pakistan was represented by a team of international experts, assisted by a team from the AGP office and included advocates Zohair Waheed and Leena Nishter, while Barrister Ahmed Irfan Aslam acted as Pakistan’s agent at the PCA.
During the proceedings, Pakistan raised three objections to the Kishanganga project’s design:
(i) the pondage of the project is 7.5 million cubic metres, which is excessive as it should be one million cubic metres;
(ii) India must raise intake by up to 1-4 metres; and
(iii) raise the spillways up to nine metres high.
On the issue of the Ratle hydropower plant, Islamabad raised four objections. Pakistan wants India to maintain the freeboard at one meter whereas India wants to keep it at two meters. In addition, India wants to keep the pond of 24 million cubic meters, but Pakistan wants it to be restricted to eight million cubic meters. Pakistan also wants the intake of the project to be raised by up to 8.8 meters and its spillways should be raised by up to 20 meters.
India’s Objections
India raised six objections which were:
i) the constitution of the court of arbitration is illegal,
ii) the court doesn’t have the competence to listen to the case,
iii) it is not yet established that the issue about changes in the designs of the projects is a dispute as a dispute can be resolved at the PCA forum so it should be taken up by a neutral expert as it is the difference between Pakistan and India, not the dispute,
iv) Pakistan had not satisfied the procedural requirements of Articles IX(3), (4), and (5) of the Treaty before initiating these proceedings,
v) Article IX (6) of the Treaty prevented the court from considering the questions “being dealt with by” the neutral expert and
vi) the procedure for empanelling the court of arbitration, set out in Annexure G to the Treaty, had not been complied with in the present case, with the consequence that there was no effectively constituted court of arbitration.
Court’s findings
In the light of its findings in relation to India’s objections, the Court unanimously made the following findings and declarations:
1. India’s non-appearance in these proceedings does not deprive the Court of Arbitration of competence.
2. The Court of Arbitration has competence, in accordance with Paragraph 16 of Annexure G to the Indus Waters Treaty, 1960, to decide all questions relating to its competence.
3. The matters referred to arbitration in Pakistan’s Request for Arbitration concern a dispute or disputes within the meaning of Article IX(2) of the Indus Waters Treaty, 1960.
4. The initiation of the present proceedings was in accordance with Article IX(3), (4), and (5) of the Indus Waters Treaty, 1960.
5. The Court of Arbitration was properly constituted in accordance with Paragraphs 4 to 11 of Annexure G to the Indus Waters Treaty, 1960.
6. India’s request for, and the World Bank’s appointment of, a Neutral Expert does not, pursuant to Article IX(6) of the Indus Waters Treaty, 1960, deprive the Court of Arbitration of competence or limit its competence.
7. Paragraph 1 of Annexure G to the Indus Waters Treaty, 1960, does not create an independent test for the necessity of the constitution of a Court of Arbitration beyond the requirements of Article IX of the Treaty.
The Verdict
The court, in its detailed verdict, accepted Pakistan’s stance and rejected India’s objections and affirmed its competence. In relation to India’s non-appearance before the court, the PCA concluded that a party’s non-appearance did not deprive the court of competence, nor did it have any effect on the establishment and functioning of the court, including the final and binding nature of its awards. At the same time, India’s non-appearance does not lessen the court’s standing duty to verify that it is competent and that it has jurisdiction over the dispute before it.
Pakistan’s response
Pakistan welcomed the ruling, terming it a “way forward” on disputes with India. Foreign Ministry spokesperson Mumtaz Zahra Baloch said in a statement that the IWT is a “foundational” agreement between Pakistan and India on water sharing, and Islamabad remains “fully committed to the treaty’s implementation, including its dispute-settlement mechanism.” “The court has upheld its competence and determined that it will now move forward to address the issues in dispute. The Indus Waters Treaty is a foundational agreement between Pakistan and India on water sharing. Pakistan remains fully committed to the Treaty’s implementation, including its dispute-settlement mechanism. We hope that India would also implement the Treaty in good faith,” the spokeswoman said.
India’s reaction
Rejecting the PCA ruling, India said that it cannot be “compelled to recognise or participate in illegal and parallel proceedings not envisaged” by the IWT.
“We have seen a press release issued by the PCA mentioning that an illegally-constituted so-called Court of Arbitration has ruled that it has the ‘competence’ to consider matters concerning the Kishanganga and Ratle hydroelectric projects,” India’s Foreign Ministry said in a statement.
Contending that India’s consistent and principled position has been that the “constitution” of the so-called Court of Arbitration “is in contravention of the provisions” of the treaty, the ministry said a neutral expert is already seized of the differences pertaining to the Kishanganga and Ratle projects.
“The neutral expert proceedings are the only treaty-consistent proceedings at this juncture. The treaty does not provide for parallel proceedings on the same set of issues,” it said.
What happens now?
The court will now start hearing Pakistan’s claim on merit to the effect that the above-mentioned two projects’ designs are in breach of IWT. It gave no details in its verdict as to when and how the case will continue, but added that it will address the interpretation and application of the bilateral IWT, notably the provisions on hydroelectric projects, as well as the legal effect of past decisions of dispute resolution bodies under the treaty.
Analysis
The PCA’s acceptance of Pakistan’s case presents an opportunity to address these concerns and seek justice through a fair legal process.
This ruling showcases the efficacy of international mechanisms in resolving disputes. As a non-UN intergovernmental organisation, the PCA provides an impartial platform for India and Pakistan to present their arguments and find mutually agreeable solution. Recognising the court’s jurisdiction and engaging in the legal process reaffirms the significance of international law in promoting justice.
Both nations must approach this legal battle with a cooperative mindset. Meaningful dialogue and exploration of solutions that safeguard the interests of all stakeholders are essential. Proactively resolving water resource disputes can foster trust, cooperation and regional stability. Pakistan must present a strong case supported by compelling evidence and expert opinions. This will reinforce our position and shed light on the broader issue of water scarcity in the region. By highlighting the potential consequences of unilaterally altering water flows, we can raise awareness about the urgent need for responsible and sustainable water-management practices.
Conclusion
Waters flowing down the Himalayan streams are an issue of life and death for the Subcontinental states. Pakistan, while being a lower riparian country, is more conscious of the prestigious utility of nature, and has always strived for a lawful and consensual approach since the signing of the Indus Waters Treaty in 1960 with India. The recent decision of the Permanent Court of Arbitration ruling that it is a competent forum to mediate the dispute over Kishanganga and Ratle projects has come as a great respite. Moreover, the fact that the unanimous decision is binding on all the parties, and cannot be appealed, makes it a viable outcome to address the odds that had crept in over the water down-flow in the wake of New Delhi’s intransigence.
The PCA’s dismissal of India’s objections is a victory for Pakistan. However, our focus should extend beyond this legal battle to upholding the Indus Waters Treaty as the cornerstone of peaceful coexistence and regional stability. Through dialogue, cooperation and adherence to international law, lasting solutions to water disputes can be found, ensuring the well-being of our nations and the environment.

The writer is an expert on International Law.

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