By S. M. Hali 

The Permanent Court of Arbitration at The Hague’s partial award on the merits of Pakistan’s complaint and India’s defence of the Kishanganga case is apparently in India’s favour but Pakistan is also claiming victory of sorts. The dispute pertained to firstly, the legality of the construction and operation of an Indian hydro-electric project located in India-administered Jammu and Kashmir; and secondly the permissibility under the Treaty of the depletion of the reservoirs of certain Indian hydro-electric plants below “Dead Storage Level.”

The Partial Award by the Court of Arbitration, which is final with respect to the matters decided therein without appeal and binding on the Parties, unanimously decided:

In the first dispute, that the Kishanganga Hydro-Electric Project (KHEP) constitutes a Run-of-River Plant under the Treaty, and India may accordingly divert water from the Kishanganga/Neelum River for power generation by the KHEP in the manner envisaged. However, when operating the KHEP, India is under an obligation to maintain a minimum flow of water in the Kishanganga/Neelum River, at a rate to be determined by the Court in a Final Award by the end of 2013.

It is thus obvious that India’s stance has been upheld, however, the Court also decided that India’s right to divert the Kishanganga/Neelum is not absolute—it is subject to the constraints specified in the Treaty and, in addition, by the relevant principles of customary international law. Paragraph 15(iii) gives rise to India’s right to construct and operate hydro-electric projects involving inter-tributary transfers, but also obliges India to operate those projects in such a way as to avoid adversely affecting Pakistan’s then existing agricultural and hydro-electric uses. Both Parties’ entitlements under the Treaty must be made effective so far as possible. The Court therefore found that Pakistan retains the right to receive a minimum flow of water from India in the Kishanganga/Neelum riverbed at all times. The Court noted that this right also stems from customary international environmental law, and that it considered that the Treaty must be applied in light of contemporary international environmental law principles. In this context, the Court recalled the commitment made by India’s Agent in the course of the hearing that India would ensure a minimum environmental flow downstream of the KHEP at all times. This aspect is contrary to India’s demand that the entire flows of the Neelum River during six to eight months of the winter season would be diverted into Wullar Lake.

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Pakistan had hired a contractor for environmental damage assessment but apparently, he failed to quantify the actual damage by diverting the flow of Kishanganga River, which will cause enormous material damage in Neelum Valley due to adverse effects of non availability/reduction of water.

The only redeeming factor for Pakistan remains that since the Treaty requires the preservation of a minimum flow of water downstream of the KHEP, the Court determined that the data provided by the Parties are insufficient to allow it to decide the precise amount of flow to be preserved. Thus Pakistan should ensure that it provides accurate additional data concerning the impacts of a range of minimum flows at the KHEP Dam by June 2013 so that the Court decides the Final Award on merit.

As far as the second dispute is concerned, India had raised two objections to its admissibility; firstly whether Pakistan had followed the Treaty procedure for the submission of disputes to the Court; and secondly, whether the Second Dispute, given its subject-matter, could properly be heard by the Court. The Courts rulings favoured Pakistan, rejecting both objections, observing that the Treaty provides for disagreements between the Parties to be resolved either by a seven-member court of arbitration or by a single, highly-qualified engineer, acting as a neutral expert. With respect to the second question, the Court found that although the Treaty specifies the technical matters that may be referred to a neutral expert, it does not give the neutral expert exclusive competence over these listed matters. Once constituted, a court of arbitration is empowered to consider any question arising out of the Treaty, including technical questions.

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Thus in the second dispute, the Court ruled that the Treaty prohibits depletion below Dead Storage Level of the reservoirs of Run-of River Plants (and correspondingly, drawdown flushing) except in case of an unforeseen emergency. This ruling does not apply to Plants already in operation or under construction (whose designs have been communicated by India and not objected to by Pakistan). Thank God for small mercies but there is little for Pakistan to celebrate.