On December 20, 2013, the Permanent Court of Arbitration (PCA), constituted under the Indo-Pakistan 1960 Indus 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 the Kishenganga Hydroelectric Project (KHEP).

The KHEP concerns a 330 MW hydroelectric project in India, involving a 100 km diversion of the Kishenganga or Neelum River to the Bunar Madumati Nullah, a tributary of Jhelum. A 22 km tunnel would join the two and the waters would re-join the Jhelum through Wullar Lake near the town of Bandipur in the Baramula district. Neelum, an important tributary of Jhelum, flows about 150 km in Pakistan controlled Kashmir before it re-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 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 drawdown technology to flush sediments should be prohibited.

The arbitral 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.

Main Questions:

Pakistan had identified two questions to be central to the dispute.The first is whether India’s proposed diversion of the river Kishenganga/Neelum into another tributary breached India’s legal obligations owed to Pakistan under the IWT, including the obligations to let flow all the waters of the Western rivers, to not permit any interference with those waters, and to maintain the natural channels. The second dispute is whether India, under the IWT, could deplete or bring the reservoir level of a run-of river plant below Dead Storage Level (DSL) in any circumstances, except for an unforeseen emergency.

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. Not surprisingly, for an issueso deeplytiedwith geo-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.

The mixed reactions also indicate the panel’s efforts to take a middle path and to balance, on the one hand, environmental concerns and energy requirement of the two countries, and on the other, to consider the rights and duties of the parties spelled out in the IWT. However, theaward can be considered a win-win for both – enabling India to proceed with developing hydropower projects on the Jhelum and Chenab albeit with some new challenges, and Pakistan having its water security restored if not redefined.

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. It can continue to develop its projects on the Chenab and the Jhelum but because of the award restrictions – on storage, the use of low gates to flush silt and the banning of drawdown flushing in all future projects – India may have to use new technology and have projects with shorter life spans. It may be useful to recall that all the major rivers in Jammu and Kashmir and their tributaries have massively silted flows, and sediment load in the Chenab is a major crisis.

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 proceeding is 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 the prevailing confusion, satisfaction, dissatisfaction, or interesting legal enunciations, there are some scholars who, convinced by practicality, stress that it may be better to harness the hydro potential of the shared watercourses in the Indus basin. Both countries will have to 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!