Indus Waters Kishenganga Arbitration (Pakistan v. India) (2013)

Below is a detailed analysis of the Indus Waters Kishenganga Arbitration (Pakistan v. India) case (2013), a significant international arbitration case concerning an infrastructure dispute over a hydroelectric project under the Indus Waters Treaty (IWT), 1960. Adjudicated by the Permanent Court of Arbitration (PCA), this case addressed complex issues of transboundary water rights, environmental obligations, and treaty interpretation in the context of infrastructure development. The analysis covers the case’s background, key issues, arbitral findings, outcome, and significance, drawing from credible sources such as PCA records, Global Arbitration Review, and academic analyses, while ensuring clarity and depth.

Case Details

  • Citation: PCA Case No. 2011-01, Partial Award (February 18, 2013), Final Award (December 20, 2013).
  • Tribunal: Permanent Court of Arbitration, The Hague.
  • Arbitral Panel: Seven-member Court of Arbitration chaired by Judge Stephen M. Schwebel, with members including Sir Franklin Berman, Professor Howard S. Wheater, Professor Lucius Caflisch, Professor Jan Paulsson, Judge Bruno Simma, and Judge Peter Tomka.
  • Parties:
  • Claimant: Islamic Republic of Pakistan.
  • Respondent: Republic of India.
  • Legal Framework: Indus Waters Treaty, 1960; international environmental law; customary international law.
  • Subject Matter: Arbitration over the permissibility and environmental impact of India’s Kishenganga Hydroelectric Project (KHEP) on the Kishenganga/Neelum River, a tributary of the Jhelum River.

Background

The Indus Waters Treaty, 1960, brokered by the World Bank, governs the allocation and use of the Indus River system between India and Pakistan. Signed post-partition, it allocates:

  • Eastern Rivers (Sutlej, Beas, Ravi) to India for unrestricted use.
  • Western Rivers (Indus, Jhelum, Chenab) to Pakistan, with India permitted limited uses, including “run-of-the-river” hydroelectric projects, subject to treaty restrictions.

The Kishenganga Hydroelectric Project (KHEP), a 330 MW run-of-the-river project in Jammu and Kashmir, India, was designed to divert water from the Kishenganga River (called Neelum in Pakistan) to a power plant via a 23.5 km tunnel, before returning it to the Jhelum River. Pakistan objected, claiming the project violated the IWT by reducing water flows to its downstream Neelum-Jhelum Hydroelectric Project (NJHEP) and causing environmental harm.

Timeline of Events

  • 2006: India began construction of the KHEP, notifying Pakistan as required under the IWT.
  • 2008–2010: Pakistan raised concerns through the IWT’s bilateral mechanisms (Permanent Indus Commission), alleging violations. Talks failed to resolve the dispute.
  • August 17, 2010: Pakistan initiated arbitration under Article IX and Annexure G of the IWT, requesting a Court of Arbitration (CoA).
  • 2011: The CoA was constituted, marking the first formal arbitration under the IWT since its inception.

Key Issues

Pakistan raised two primary questions, which the CoA addressed in a Partial Award (February 18, 2013) and a Final Award (December 20, 2013):

  1. Permissibility of the KHEP:
  • Whether India’s KHEP, including its design and diversion of water, complied with the IWT, particularly Annexure D, which governs run-of-the-river projects on Western Rivers.
  • Whether India’s diversion of water from the Kishenganga to the Jhelum via a tunnel violated Pakistan’s rights to the “existing agricultural and hydroelectric uses” of the Jhelum River.
  1. Sediment Management and Drawdown Flushing:
  • Whether India could use drawdown flushing (lowering reservoir water levels to flush sediment) for the KHEP, given the IWT’s restrictions on reservoir manipulation.
  • The environmental and operational implications of sediment management for downstream flows to Pakistan.
  1. Environmental Obligations:
  • Whether India was obligated under the IWT or customary international law to maintain minimum downstream flows to mitigate environmental harm to Pakistan’s ecosystem and NJHEP.

Arbitration Proceedings

Pakistan’s Arguments

  • IWT Violation: The KHEP’s diversion of water would reduce flows to Pakistan’s NJHEP, violating Annexure D, which limits India’s interference with Western Rivers. Pakistan claimed the diversion affected its “existing uses” and agricultural needs.
  • Sediment Management: Drawdown flushing was prohibited under the IWT, as it manipulated reservoir levels beyond permitted storage limits, impacting downstream water availability.
  • Environmental Harm: The project threatened downstream ecosystems, fisheries, and agriculture, breaching customary international law principles like the no-harm rule and sustainable development.
  • Relief Sought: Pakistan requested the CoA to halt the KHEP, modify its design, prohibit drawdown flushing, and mandate minimum environmental flows.

India’s Arguments

  • IWT Compliance: The KHEP was a permissible run-of-the-river project under Annexure D. The diversion was within India’s rights, as the water was returned to the Jhelum, and no “existing uses” by Pakistan were established at the time KHEP was planned.
  • Sediment Management: Drawdown flushing was necessary for the project’s sustainability, as sediment accumulation would render the plant inoperable. The IWT did not explicitly prohibit it.
  • Environmental Obligations: India argued that the IWT did not impose specific environmental flow requirements, and customary international law was secondary to the treaty’s provisions.
  • Counter-Relief: India sought confirmation of the KHEP’s legality and its right to operate the project as designed.

Procedural Steps

  • Interim Measures (2011): Pakistan requested a stay on KHEP construction. The CoA declined a full halt but ordered India to refrain from permanent works on the dam’s spillways, pending the Partial Award.
  • Site Visit (2012): The CoA conducted a site visit to the KHEP and NJHEP to assess technical and environmental impacts.
  • Hearings: Extensive hearings were held in The Hague, with expert testimonies on hydrology, engineering, and environmental impacts.

Arbitral Findings

Partial Award (February 18, 2013)

The CoA issued a Partial Award addressing the permissibility of the KHEP and drawdown flushing:

  1. Permissibility of the KHEP:
  • The CoA upheld India’s right to construct and operate the KHEP, finding it compliant with Annexure D as a run-of-the-river project.
  • The diversion of water via a tunnel was permissible, as the IWT allowed India to use Western Rivers for hydroelectricity, provided water was returned to the river system.
  • Pakistan failed to prove “existing agricultural or hydroelectric uses” on the Jhelum that would restrict the KHEP at the time India finalized the project’s design (pre-2006). The NJHEP, planned later, did not qualify as an existing use.
  1. Drawdown Flushing:
  • The CoA ruled that drawdown flushing was prohibited under the IWT for run-of-the-river projects like the KHEP.
  • Annexure D restricts reservoir manipulation to “dead storage” levels, and drawdown flushing (lowering water below dead storage) violated these limits.
  • The CoA emphasized that sediment management must rely on alternative methods (e.g., sluicing or dredging) to comply with the treaty.
  1. Environmental Considerations:
  • The CoA acknowledged customary international law’s relevance, including the no-harm rule and environmental impact assessment obligations, but held that the IWT’s specific provisions took precedence.
  • The question of minimum environmental flows was deferred to the Final Award, pending further data.

Final Award (December 20, 2013)

The CoA issued the Final Award, resolving the environmental flow issue and operational details:

  1. Minimum Environmental Flows:
  • The CoA mandated a minimum flow of 9 cumecs (cubic meters per second) downstream of the KHEP to protect Pakistan’s environmental and downstream interests.
  • This decision balanced India’s right to maximize hydroelectric generation with Pakistan’s need for adequate water for agriculture, ecosystems, and the NJHEP.
  • The CoA relied on hydrological data and expert evidence, noting that 9 cumecs would mitigate significant harm while allowing the KHEP’s viability.
  1. Operational Guidelines:
  • India was required to operate the KHEP within the IWT’s technical specifications, ensuring no drawdown flushing and maintaining the mandated minimum flow.
  • The CoA clarified that future sediment management must use IWT-compliant methods.
  1. Future Cooperation:
  • The CoA encouraged India and Pakistan to use the Permanent Indus Commission to monitor flows and share data, fostering bilateral cooperation under the IWT.

Outcome

  • KHEP Upheld: The CoA permitted India to proceed with the KHEP, subject to modifications to exclude drawdown flushing and maintain a 9 cumecs minimum flow.
  • Pakistan’s Partial Success: While the KHEP was not halted, Pakistan secured restrictions on sediment management and a minimum flow requirement, protecting downstream interests.
  • Implementation: India adjusted the KHEP’s operational plans to comply with the awards. The project became operational in 2018, with ongoing monitoring through the Indus Commission.
  • No Damages: Neither party was awarded monetary damages, as the focus was on injunctive and declaratory relief.

Significance

The Indus Waters Kishenganga Arbitration is a landmark case in international arbitration and transboundary water law, with far-reaching implications for infrastructure disputes:

  1. Treaty Interpretation:
  • The CoA’s strict interpretation of the IWT’s technical provisions (e.g., Annexure D) set a precedent for balancing upstream and downstream rights in water-sharing agreements.
  • Clarified the scope of “existing uses” and permissible hydroelectric projects, guiding future infrastructure development under the IWT.
  1. Environmental Obligations:
  • The mandate for minimum environmental flows integrated customary international law (e.g., no-harm rule) into treaty-based arbitration, advancing environmental considerations in infrastructure projects.
  • Established that arbitral tribunals can impose environmental safeguards, even when treaties lack explicit provisions.
  1. Transboundary Infrastructure Disputes:
  • Demonstrated arbitration’s efficacy in resolving complex, politically sensitive disputes over shared resources, offering a neutral forum for India and Pakistan.
  • Highlighted the importance of technical expertise and site visits in adjudicating infrastructure disputes.
  1. IWT’s Resilience:
  • The arbitration reaffirmed the IWT’s robustness as a framework for managing Indus River disputes, despite India-Pakistan tensions.
  • Encouraged bilateral mechanisms like the Indus Commission for ongoing cooperation, reducing future arbitration needs.
  1. Precedent for Arbitration:
  • As the first IWT arbitration to reach a CoA, it set procedural and substantive benchmarks for future disputes under the treaty (e.g., the subsequent Ratle Hydroelectric Project arbitration).
  • Showcased the PCA’s role in handling high-stakes infrastructure arbitrations involving state parties.

Critical Analysis

Strengths

  • Balanced Outcome: The CoA’s decision allowed the KHEP to proceed while imposing environmental safeguards, equitably addressing both parties’ interests.
  • Environmental Integration: The minimum flow requirement advanced international environmental law, aligning infrastructure development with sustainability.
  • Clarity on IWT: The rulings on drawdown flushing and permissible diversions clarified technical ambiguities, aiding future compliance.

Criticisms

  • Limited Environmental Scope: Critics argue the 9 cumecs flow was insufficient to fully protect Pakistan’s ecosystems, reflecting a conservative approach to environmental obligations.
  • Implementation Challenges: Enforcing minimum flows relies on bilateral cooperation, which remains strained due to India-Pakistan relations.
  • Delay in Resolution: The arbitration (2010–2013) and subsequent implementation delays highlight the time-intensive nature of complex infrastructure disputes.

Conclusion

The Indus Waters Kishenganga Arbitration (Pakistan v. India) (2013) is a pivotal case in international arbitration, illustrating the interplay of treaty obligations, environmental law, and infrastructure development. By upholding India’s KHEP with restrictions on sediment management and a minimum flow requirement, the PCA balanced developmental rights with downstream protections, reinforcing the Indus Waters Treaty’s framework. The case underscores arbitration’s role in resolving transboundary disputes, integrating environmental considerations, and fostering cooperation over shared resources. For India and Pakistan, it remains a benchmark for managing future Indus River projects, while globally, it highlights the importance of neutral arbitration in politically charged infrastructure disputes.

Scroll to Top