Background: On December 20, 2013, the Permanent Court of Arbitration (PCA), constituted under the Indo-Pakistan 1960Indus Waters Treaty (IWT),issued a landmark Award in a proceeding instituted by Pakistan on May 17, 2010 against India in connection with the construction by the latter of theKishenganga Hydroelectric Project (KHEP).

The KHEP concerns a 330 MW hydroelectric project in India, involving a 100 km diversion of Kishenganga River (called Neelum in Pakistan) to a tributaryof Jhelum (the BunarMadumatiNullah), through a 22 km tunnel, its water to re-join Jhelum later through Wullar Lake near the town of Bandipur in Baramula district. Neelum, an important tributary of Jhelum, flows about 150 km in Pakistan controlled Kashmir before it joins the Jhelum.As a result of this diversion, it will re-join Jhelum in India controlled Kashmir. The diversion will also change the direction of the river before joining the Jhelum near Muzaffarabad, the site of Pakistan’s Neelum-Jhelum Hydroelectric Project (NJHEP),which pertains to the construction of a 969 MW hydroelectric project, for which the blueprints and technical stipulations, as per Pakistan, were finalized in 1997.

Since the time India stated its intentions to construct the KHEP, Pakistan had been raising objections, emphasizing that the inter-tributary diversions of waters due to the KHEP were barred by the IWT, that existing Pakistani uses needed to be protected, and that the KHEP’s draw-down technology to flush sediments should be prohibited.

Thearbitral Award, which was issued in multiple segments after reviewing the details of the points of law, facts, procedures, and questions raised by the parties at different stages of the proceeding, is certain to have a significant impact on the future of water relations between not only India and Pakistan, but also amongst other countries in South Asia and beyond. In view of itssignificance,as well as the unusual evidentiary and treaty interpretation challenges it had posed, this article attemptsto briefly introduce the dispute and the Award.

Main Questions:Pakistan had identified two questions to be central to the dispute. The first related to whether India’s proposed diversion of the river Kishenganga (Neelum) into another Tributary, being one central element of the KHEP, breached India’s legal obligations owed to Pakistan under the IWT, as interpreted and applied in accordance with international law, including the obligations to let flow all the waters of the Western rivers, not permit any interference with those waters, and to maintain the natural channels (the First Dispute). The second related to whether India,under the IWT, coulddeplete or bring the reservoir level of a run-of river plant below Dead Storage Level (DSL) in any circumstances, except for an unforeseen emergency (the Second Dispute).

These Pakistani objections were based on the argument that the KHEP will significantly reduce the power generation capacity of the NJHEP,the draw-down flushing to tackle sedimentation would allow India to reduce the reservoir level of the dam below DSL, and the dam with this design would allow India to control the volume and timing of the water flow downstream.

Proceedings:Between May 2011 and May 2012, India and Pakistan made written submissions to the PCA. From 20 to 31 August 2012, a two-week hearing in The Hague was held. On 18 February 2013, the PCA issued a Partial Award and on December 20, 2013, a Final Award.Interestingly, the proceedings took less than three years after the tribunal was formed.While this timing might not mean much in normal settings, the successful resolution of a politically charged and vigorously contested interstate case of such technical complexity in three years is, as noted by scholars, a notable accomplishment.

During the very first meeting held on January 14, 2011, Pakistan informed the PCA that it had chosen to forego the immediate pursuit of an order for interim measures. However, on June 6, 2011, it applied for interim measures in the following terms: (i) India shall cease work on the KHEP until such time as the PCA renders its Award on the merits in the proceedings; (ii) India shall inform the PCA and Pakistan of any actual or imminent developments or steps in relation to the KHEP that may have a significant adverse effect upon restoring the status quo ante or that may in any other way seriously jeopardize Pakistan's rights and interests under the IWT; (iii) Any steps that India has taken or may take in respect of the KHEP are taken at its own risk and without prejudice to the possibility that the PCA may in its decision on the merits order that the works must not be continued or must be modified or dismantled; and (iv) Such further relief as the PCA considers to be necessary. In response, India requested the PCA to reject Pakistan’s application entirely and to rule that the circumstances of the case did not justify interim measures.

The arguments and counter arguments made by the Parties on the issue of interim measures revolved mainly around six themes and sub-themes, including inter alia: (i) Pakistan’s original decision not to seek interim measures; (ii) the Proceed At Own Riskprinciple; (iii) the applicable legal standards; (iv) the urgency and irreversibility of interim measures; (v) the grounds for interim measures (for safeguarding the applicant’s interests, avoiding prejudice to the final solution, and avoiding aggravation or extension of the dispute); and (vi) the different characterization of the historical records by Parties.

After analysing the numerous above points as well as India’s assurances and representations, its own power to specify interim measures, and the need to avoid prejudice to the final solution, the PCA issued an Order for interim measures. It instructedthat while the arbitration was pending, India could: (i) erect temporary cofferdams and operate the by-pass tunnel it had mentioned to have completed; (ii) temporarily dry out the riverbed of the Kishenganga/Neelum at the Gurez valley; (iii) excavate the riverbed; and (iv)construct the sub-surface foundations of the dam. On the other hand, until the PCA rendered its Award, India could not construct any other permanent works on or above the riverbed that might inhibit the restoration of the full flow of that river to its natural channel. Furthermore, in the Order, the PCA asked the Parties to submit, by December 19, 2011, a joint report setting forth the areas of agreement and points of disagreement between them concerning the implementation of the Order.

Merits Hearing: The hearing on the merits commenced on August 20, 2012, and concluded on August 31, 2012. Upon its completion, the PCA, on February 18, 2013, was able to render a Partial Award. In relation to the First Dispute, it ruled that: (1) The KHEP constituted a Run-of-River Plant for the purpose of the IWT; and (2) India could divert water from the Kishenganga/Neelum for power generation by the KHEP and deliver the water released below the power station into the Bonar Nullah, contingent on constructing and operating it in such a way as to maintain a minimum flow of water in the Kishenganga/Neelum, at a rate to be determined later.

In relation to the Second Dispute, it ruled that except in the case of an unforeseen emergency, the IWT did not permit reduction of the water level in the reservoirs of Run-of-River Plants on the Western Rivers below DSL. Also, the accumulation of sediment in such reservoirs did not constitute an unforeseen emergency that would permit the depletion of the reservoir below DSL for drawdown flushing purposes. Accordingly, India was not to employ drawdown flushing at the KHEP reservoir to an extent that would entail depletion of the reservoir below DSL. This prohibition,however, did not apply to Run-of-River Plants that were in operation or already under construction on the date of the Partial Award, the design of which, having been duly communicated by India, had not been objected to by Pakistan.

The Partial Award, which also lifted the measures imposed by the PCA in its Order of 23 September 2011, attached no further restrictions on the construction and operation of the KHEP. However, to assist the PCA to determine the minimum flow, it asked the Parties to submit all necessary information within four months.

Search For Clarifications:Soon after the issuance of the Partial Award, India, on 20 May 2013, submitted to the PCA a Request for Clarification or Interpretation (the Indian Request) in which it took issue with the PCA’s conclusion that except in the case of an unforeseen emergency, the IWT did not permit reduction (or depletion) of the water below DSL in the Run-of-River Plants’ reservoirs on the Western Rivers. It asked the PCA to specify that such reduction or depletion depended on site-specific analyses of the feasibility of methods of sediment control other than drawdown flushing.

Upon invitation of the PCA, Pakistan submitted a Responseto the Indian Request on 19 July 2013. India submitted a Reply on 2 September 2013. Pakistan presented its Rejoinder to India’s Reply on 30 September 2013. The PCA considered all the submissions and issued a unanimous decision, on 20 December 2013, statingclearly that the prohibition on the reduction below DSL of the water in the reservoirs of Run-of-River Plants on the Western Rivers, except in the case of unforeseen emergency, was for general application, and not specific to KHEP only.

Fixing The Minimum Flow:In the Partial Award, the PCA had asked India and Pakistan to provide detailed information on the historical flows at the Line of Control (LOC), and at the KHEP and NJHEP dam sites. These were provided by both countries. Contrasting arguments and rebuttals occurred on the issues of hydrological data, including their reliability and integrity, methodology and analysis, flow at the different stations, effects on flow on power generation, agricultural uses andenvironmental impact, as well as monitoring of the minimum flow.The PCA addressed the Parties’ differences, particularly regarding the hydrologic data records, and the effects the KHEP was likely to have on agricultural and hydro-electric uses by Pakistan and on the downstream environment, and taking into account these effects, determined the minimum flow.

The Final Award, issued on December 20, 2013, was unanimous. It specified that, in the operation of the KHEP, India had to release a minimum flow of 9 cumec into the Kishenganga/Neelum below the KHEP at all times when the daily average flow in the Kishenganga/Neelum immediately upstream of the KHEP meets or exceeds 9 cumec. But at any time when the daily average flow in the KN River immediately upstream of the KHEP is less than 9 cumec, India had to release 100% of the daily average flow immediately upstream of the KHEP into the Kishenganga/Neelumbelow the KHEP. The PCA further specified that seven years after the diversion of water by the KHEP either Party was allowed to seek reconsideration of the above specified minimum flow through the Permanent Indus Commission and the mechanisms of the IWT.

Significance:Not surprisingly, for an issueso deeplytiedwithgeo-hydropolitics coupled with historical acrimony, the reactions about the Award had to be mixed. Indeed, there was ample joy for victory and enough sadness for defeat in both countries. In each country, there was one side which referred to the verdict as a victory, and another side, as compromising vital national interests.

The mixed reactions also indicate the Panel’s efforts to take a middle path attempting to strike a balance,on one hand, between the environmental concern and the energy requirement of the two countries, and on the other, between the rights and duties of the parties spelled out in the IWT. Nonetheless, the Award can be considered a win-win for both: enabling India (with some significant new challenges) to proceed with developing hydropower projects on the Jhelum and Chenab, and Pakistan having its water security on the Indus, Jhelum and Chenab restored, ifnotredefined.

From a techno-legal perspective, for India, the Award means that it can continue to develop its hydropower projects on the Chenab and the Jhelum, but it must strictly respect the IWT-defined limits on storage, and use methods other than the construction of low gates to flush silt. The Award, having banned the use of drawdown flushing in all future projects, essentially means that all the new projects will either have to survive with shorter life or will have to use a new technology to manage the massive sedimentation load that often kills dams and reservoirs. It may be useful to recall that all the major rivers in Jammu and Kashmir and their tributaries have massively silted flows, and Chenab, the major power house of the state, has sediment load as a major crisis.Therefore, the challenge is clear and substantial for India. It will have to be more imaginative in the way in which it deals with silt management, and environmental flows. For Pakistan, the Award means that due to the construction of the KHEP, the flow of water for the NJHEP will decrease, which would reduce annual energy generation, but it will now reasonably be able to claim basic environmental flows to be restored on the Ravi and Sutlej and will not be threatened by the development of a large amount of easy-to-manipulate storage by India on the Jhelum and Chenab.

From an international legal perspective, the final Award is a landmark for governance of shared trans-boundary water resources as the dispute had raised a multitude of important questions on the relevance of the IWT, model of development adopted by building large dams and reservoirs for hydroelectric power with environmental consequences, application of international environmental obligations, and adequacy of existing international courts and tribunals to settle complex water disputes. Froman internationalist’s angle, the decision is historic because it revives the Indus Waters Treaty as a central and viable instrument for the cooperation on the use of the waters of the Indus Basin. Another notable point in the proceedingis theemergence of the claim to customary status of the precautionary principle and the question of its status in international law, in connection with which the PCA emphasized that it did not consider it appropriate, and certainly not necessary, for it to adopt a precautionary approach and assume the role of policymaker in determining the balance between acceptable environmental change and other priorities, or to permit environmental considerations to override the balance of other rights and obligations, and alluded to the contentious nature of the principle by indicating that it belongs in the realm of policy.

In the midst of theprevailing confusions, satisfactions, dissatisfactions, or interesting legal enunciations, there are some scholars who, convinced by practicality and realism,stress that to better harness the hydro potential of the shared watercourses in the Indus basin, both countries will have to learn from world history and consider joint design and implementation of hydro power projects that take a holistic hydrological view and maintain the environmental integrity of the entire Indus basin without compromising the developmental needs of both the riparians. Only political sagacity and sensitivity towards the legacy of common heritage, according to such scholars, can help them overcome their animosity and take an open view on shared trans-boundary Indus waters!

The Author can be reached at Kshitiz@juno.com