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Indus River Basin Usage: Permanent Court of Arbitration dismissed India’s Plea

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INDUS RIVER- LAW INSIDER

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Published on: 11 July 2023 at 11:00 IST

The Permanent Court of Arbitration (PCA) in The Hague has dismissed India’s objections to a procedure initiated by Pakistan concerning water usage in the Indus River Basin. The longstanding disputes between these countries revolve around Pakistan’s concerns that India’s planned hydropower dams, namely ‘Kishenganga’ and ‘Ratle,’ in Jammu and Kashmir will reduce water flow in the river, which is essential for 80% of its irrigated agriculture.

The PCA has determined that it has the authority to address the issues presented and resolve the disputes raised by Pakistan. The court has issued a procedural order for the upcoming phase of the proceedings, in which it will examine specific questions regarding the interpretation and application of treaty provisions relating to the design, operation, and legal consequences of the hydroelectric projects, as well as the impact of previous decisions made by dispute resolution bodies under the treaty.

In response to the court’s ruling, the Ministry of External Affairs released a statement reaffirming India’s consistent position. They argue that the establishment of the so-called Court of Arbitration violates the provisions of the Indus Waters Treaty.

India contends that the differences pertaining to the Kishenganga and Ratle projects should be exclusively handled by a Neutral Expert, whose proceedings are consistent with the treaty. According to the ministry, the treaty does not permit parallel proceedings on the same set of issues. India maintains that it cannot be forced to acknowledge or participate in illegal and parallel proceedings that were not envisioned by the treaty.

The role of a Neutral Expert is to resolve certain disputes under the Indus Waters Treaty, which may or may not be the same as those submitted to the arbitral tribunal. The decision of the Neutral Expert is binding on the involved parties. Moving forward, in accordance with the court’s order and India’s Ministry of External Affairs’ consistent stance, Kartikey Mahajan, Partner at Khaitan & Co, explained that India has the option to participate in the proceedings and defend its claims on the merits, as it did in the previous Kishenganga award.

India has the right to appoint two members to the Tribunal, which it has not exercised thus far. It is advised that India should exercise this right now that the Tribunal has determined its jurisdiction over the dispute. If India chooses not to participate, it may face a default award that might not entirely serve its interests.

Regarding the impact of the eventual award on Pakistan and India, Mahajan stated that Pakistan cannot enforce the award in the same manner as an international commercial or investment treaty arbitration award. Usually, parties comply with such awards voluntarily. It remains to be seen whether India will choose to comply, given its previous decision not to participate in the proceedings.