Indus Waters Kishenganga Arbitration, Pakistan v. India, Partial Award

252 Pages·2013·2.97 MB·English

IN THE MATTER OF
THE INDUS WATERS KISHENGANGA ARBITRATION

-before-

THE COURT OF ARBITRATION CONSTITUTED
IN ACCORDANCE WITH THE INDUS WATERS TREATY 1960
BETWEEN THE GOVERNMENT OF INDIA
AND THE GOVERNMENT OF PAKISTAN
SIGNED ON 19 SEPTEMBER 1960

-between-

THE ISLAMIC REPUBLIC OF PAKISTAN

-and-

THE REPUBLIC OF INDIA

__________________________________________________________

PARTIAL AWARD
__________________________________________________________

COURT OF ARBITRATION:

Judge Stephen M. Schwebel (Chairman)
Sir Franklin Berman KCMG QC
Professor Howard S. Wheater FREng
Professor Lucius Caflisch
Professor Jan Paulsson
Judge Bruno Simma
H.E. Judge Peter Tomka

SECRETARIAT:

The Permanent Court of Arbitration

18 February 2013
PK-IN 82842
AGENTS, COUNSEL AND OTHER REPRESENTATIVES OF THE PARTIES

AGENT FOR PAKISTAN: AGENT FOR INDIA:

Mr Kamal Majidulla Mr Dhruv Vijai Singh
Special Assistant to the Prime Minister for Secretary to the Government of India
Water Resources and Agriculture Ministry of Water Resources

CO-AGENTS FOR PAKISTAN: CO-AGENTS FOR INDIA:

Mr Khalil Ahmad Mr Y.K. Sinha
Ambassador at Large Additional Secretary (PAI)
Ministry of External Affairs
Mr Mohammad Karim Khan Agha
Prosecutor General Dr Neeru Chadha
National Accountability Bureau Joint Secretary & The Legal Adviser
Ministry of External Affairs
Mr Mirza Asif Baig Mirza
Pakistan Commissioner for Indus Waters Mr G. Aranganathan
Indian Commissioner for Indus Waters

COUNSEL FOR PAKISTAN: COUNSEL FOR INDIA:

Professor James Crawford SC Mr Fali S. Nariman
University of Cambridge Senior Advocate
Matrix Chambers Supreme Court of India
Professor Vaughan Lowe QC Mr R.K.P. Shankardass
University of Oxford Senior Advocate
Essex Court Chambers Supreme Court of India
Mr Samuel Wordsworth Mr Rodman Bundy
Essex Court Chambers Eversheds LLP, Paris
Ms Shamila Mahmood Professor Stephen C. McCaffrey
Senior Legal Consultant McGeorge School of Law
Government of Pakistan University of the Pacific
Professor Daniel Barstow Magraw
Johns Hopkins University
Mr S.C. Sharma
Advocate, Supreme Court of India

REPRESENTATIVES FOR PAKISTAN: REPRESENTATIVES FOR INDIA:

Mr Aamir Shoukat HE Bhaswati Mukherjee
Chargé d’affaires Ambassador of India to the Netherlands
Embassy of Pakistan
Mr Darpan Talwar

Senior Joint Commissioner (Indus)
Mr Faris Qazi
Ministry of Water Resources, Technical Adviser
Deputy Commissioner for Indus Waters

PK-IN 82842 i
REPRESENTATIVE FOR THE Mr P.K. Saxena
GOVERNMENT OF AZAD JAMMU AND Director
KASHMIR: Central Water Commission, Technical Adviser
Mr Balraj Joshi
Mr Sardar Raheem General Manager
Secretary of Irrigation and Agriculture NHPC Ltd., Project representative

EXPERT WITNESSES FOR PAKISTAN: EXPERT WITNESSES FOR INDIA:

Mr Vaqar Zakaria Dr K.G. Rangaraju
Managing Director Hydraulic Engineering Consultant & Former
Hagler Bailly Pakistan Head of Civil Engineering, IIT, Roorkee

Dr S. Sathyakumar
Mr Syed Muhammad Mehr Ali Shah
Scientist
Principal Engineer
Wildlife Institute of India, Dehra Dun
NESPAK
Mr Jesper Goodley Dannisøe
Dr Gregory L. Morris Senior Project Manager
GLM Engineering COOP DHI (Water & Environment), Denmark

Dr Niels Th. Jepsen
Dr Jackie King
Senior Scientist
River Ecology and Environmental Flow
Section for Freshwater Fisheries Ecology,
Specialist
Technical University of Denmark
Southern Waters

TECHNICAL EXPERTS FOR PAKISTAN:

Mr Manzar Naeem Qureshi
Power Economics Expert
Hagler Bailly Pakistan

Mr Saleem Warsi
Flow Measurement Expert
Water Resources and Power Development
Authority

Dr Jens Christian Refsgaard
Geological Survey of Denmark and Greenland
(GEUS)

Mr Hans Beuster
Hydrologist
Beuster, Clarke and Associates

Dr Cate Brown
River Ecology and Environmental Flow
Specialist
Southern Waters

PK-IN 82842 ii
TABLE OF CONTENTS
I. PROCEDURAL HISTORY ........................................................................................................ 1
A. THE INDUS WATERS TREATY AND THE INITIATION OF THIS ARBITRATION ................. 1
B. THE CONSTITUTION OF THE COURT OF ARBITRATION ................................................... 3
C. THE FIRST MEETING OF THE COURT AND THE ADOPTION OF PROCEDURAL
RULES.................................................................................................................................. 4
D. CONFIDENTIALITY ............................................................................................................. 9
E. THE COURT’S FIRST SITE VISIT ...................................................................................... 10
F. PAKISTAN’S APPLICATION FOR INTERIM MEASURES ................................................... 14
G. THE IMPLEMENTATION OF THE ORDER ON INTERIM MEASURES ................................ 20
H. THE COURT’S SECOND SITE VISIT .................................................................................. 25
I. THE PARTIES’ WRITTEN SUBMISSIONS ON THE MERITS; REQUESTS FOR
DOCUMENTS AND FURTHER INFORMATION ................................................................... 28
J. EXPERT WITNESSES AND TESTIMONY BY VIDEO LINK ................................................. 32
K. THE HEARING ON THE MERITS ....................................................................................... 37
II. BACKGROUND ........................................................................................................................ 41
A. THE GEOGRAPHY ............................................................................................................. 41
B. THE INDUS WATERS TREATY .......................................................................................... 43
C. THE HISTORY OF THE DISPUTES ..................................................................................... 46
D. THE KHEP AND THE NJHEP – TECHNICAL CHARACTERISTICS ................................. 50
E. THE IMPACT OF THE KHEP ON THE NJHEP ................................................................. 54
III. ARGUMENTS OF THE PARTIES ......................................................................................... 55
A. THE DIVERSION OF THE KISHENGANGA/NEELUM RIVER UNDER THE TERMS OF
THE TREATY ..................................................................................................................... 55
1. The Parties’ arguments on the governing principles of the Treaty for use of
the waters of the Western Rivers .............................................................................. 55
(a) The meaning of the Treaty text ............................................................................ 57
Pakistan’s arguments .............................................................................................. 57
India’s arguments ................................................................................................... 58
(b) The Treaty’s drafting history ............................................................................... 59
Pakistan’s arguments .............................................................................................. 59
India’s arguments ................................................................................................... 62
2. The Parties’ arguments on the Treaty provisions governing hydro-electric
projects ........................................................................................................................ 65
(a) “Restricted . . . to the drainage basin thereof” ................................................... 66
Pakistan’s arguments .............................................................................................. 66
PK-IN 82842 iii
India’s arguments ................................................................................................... 68
(b) Run-of-River Plants .............................................................................................. 68
Pakistan’s arguments .............................................................................................. 69
India’s arguments ................................................................................................... 71
(c) “Where a Plant is located on a Tributary of the Jhelum . . . water
released below the Plant may be delivered . . . into another Tributary” ......... 73
Pakistan’s arguments .............................................................................................. 73
India’s arguments ................................................................................................... 74
(d) “If necessary” ........................................................................................................ 75
Pakistan’s arguments .............................................................................................. 76
India’s arguments ................................................................................................... 78
(e) Interpretation of the phrase “then existing Agricultural Use or hydro-
electric use” ............................................................................................................ 80
Pakistan’s arguments .............................................................................................. 80
India’s arguments ................................................................................................... 81
(f) Whether Pakistan has established an “existing . . . use” ................................... 83
Pakistan’s arguments .............................................................................................. 83
India’s arguments ................................................................................................... 84
(g) Whether the diversion of the Kishenganga/Neelum River would cause
an adverse effect .................................................................................................... 86
Pakistan’s arguments .............................................................................................. 86
India’s arguments ................................................................................................... 88
3. The Parties’ arguments on Article IV(6) of the Treaty ........................................... 90
Pakistan’s arguments .............................................................................................. 90
India’s arguments ................................................................................................... 92
B. THE PERMISSIBILITY OF RESERVOIR DEPLETION UNDER THE TREATY ..................... 94
1. The Parties’ arguments on the admissibility of the Second Dispute ...................... 98
(a) Whether Pakistan has followed the procedure of Article IX for the
submission of disputes to the Court ................................................................... 100
India’s arguments ................................................................................................. 100
Pakistan’s arguments ............................................................................................ 102
(b) Whether the Second Dispute is a technical matter that falls within Part
1 of Annexure F and should therefore be classified as a “difference” to
be decided by a neutral expert ........................................................................... 104
India’s arguments ................................................................................................. 104
Pakistan’s arguments ............................................................................................ 106
PK-IN 82842 iv
2. The Parties’ arguments on the permissibility of reservoir depletion below
Dead Storage Level................................................................................................... 107
(a) The permissibility of reservoir depletion generally.......................................... 108
Pakistan’s arguments ............................................................................................ 108
India’s arguments ................................................................................................. 109
(b) The Treaty’s definition of “Dead Storage” ....................................................... 111
Pakistan’s arguments ............................................................................................ 112
India’s arguments ................................................................................................. 113
(c) The Treaty’s provisions on the filling of reservoirs ......................................... 114
Pakistan’s arguments ............................................................................................ 114
India’s arguments ................................................................................................. 116
(d) The Treaty’s provisions on low-level outlets..................................................... 118
Pakistan’s arguments ............................................................................................ 118
India’s arguments ................................................................................................. 119
(e) The Treaty’s provisions on water flow .............................................................. 119
Pakistan’s arguments ............................................................................................ 119
India’s arguments ................................................................................................. 120
(f) The necessity of drawdown flushing .................................................................. 120
Pakistan’s arguments ............................................................................................ 120
India’s arguments ................................................................................................. 122
(g) The Baglihar expert determination ................................................................... 126
Pakistan’s arguments ............................................................................................ 127
India’s arguments ................................................................................................. 129
C. THE RELEVANCE OF TERRITORIAL CLAIMS................................................................ 130
Pakistan’s arguments ............................................................................................ 130
India’s arguments ................................................................................................. 132
IV. ANALYSIS OF THE COURT ................................................................................................ 134
A. THE TERRITORIAL SCOPE OF THE TREATY ................................................................. 134
B. THE FIRST DISPUTE: THE PERMISSIBILITY OF DELIVERING THE WATERS OF
THE KISHENGANGA/NEELUM RIVER INTO ANOTHER TRIBUTARY THROUGH
THE KHEP ...................................................................................................................... 137
1. India’s general obligations under Articles III and IV(6) ...................................... 138
2. The requirements for Run-of-River Plants under Annexure D ........................... 140
(a) The permissibility of inter-tributary transfers in general ............................... 141
(b) The KHEP as a Run-of-River Plant located on a tributary to the
Jhelum .................................................................................................................. 142
PK-IN 82842 v
(c) The criterion that inter-tributary transfers must be “necessary” .................. 145
3. The interpretation of the “then existing Agricultural Use or hydro-electric
use by Pakistan” in Paragraph 15(iii) .................................................................... 148
(a) The text ................................................................................................................. 149
(b) The context ........................................................................................................... 151
(c) The object and purpose of the Treaty ............................................................... 153
4. Challenges of the application of Paragraph 15(iii) to the KHEP ......................... 154
(a) The Parties’ approaches to “then existing” uses as applied to the KHEP ..... 154
(b) Implications of adopting the “ambulatory” approach ..................................... 157
(c) Implications of adopting the “critical period” approach ................................ 158
(d) The Treaty’s balance between the rights of both Parties ................................ 161
5. The import of the Court’s interpretation for the construction and
operation of the KHEP ............................................................................................ 162
(a) India’s vested right to build and operate the KHEP ........................................ 162
(b) The preservation of downstream flows ............................................................. 168
(c) The insufficiency of the data on record to determine a precise minimum
downstream flow; the Court’s request for further data .................................. 172
C. THE SECOND DISPUTE: THE PERMISSIBILITY OF RESERVOIR DEPLETION
UNDER THE TREATY ...................................................................................................... 174
1. The scope of the Second Dispute ............................................................................. 174
2. The admissibility of the Second Dispute................................................................. 177
(a) Whether Pakistan has complied with the procedure of Article IX of the
Treaty ................................................................................................................... 179
(b) Whether the subject matter of the Second Dispute can properly be
heard by the Court .............................................................................................. 182
3. The permissibility of drawdown flushing ............................................................... 186
(a) Reservoir sedimentation and sediment control ................................................ 188
(b) The context of the Treaty with respect to drawdown flushing........................ 191
(c) The specific provisions of the Treaty ................................................................. 194
(d) The necessity of drawdown flushing for power generation on the
Western Rivers .................................................................................................... 196
V. DECISION ............................................................................................................................... 201

PK-IN 82842 vi
FIGURES AND MAPS

Map of the Indus system of rivers and its catchment area .................................................................... 42

Schematic representation of the KHEP .................................................................................................. 51

Map of the respective locations of the KHEP and the NJHEP ............................................................. 53

Schematic representation of a dam with a low-level spillway .............................................................. 95

Diagrams showing the specific design of the KHEP ................................................................... 96 & 97

Diagram illustrating the difference between the high level and orifice-type intakes .......................... 122

PK-IN 82842 vii
GLOSSARY OF DEFINED TERMS
1954 Proposal Proposal by the World Bank for a “Plan for the Development and Use
of the Indus Basin Waters” dated 5 February 1954 (Annex PK-2)
Baglihar (or Baglihar Raymond Lafitte, Determination of Neutral Expert on the Baglihar
Determination) Project dated 12 February 2007 (Annex PK-230)
Commission The Permanent Indus Commission established by Article VIII of the
Treaty
Commissioners The Pakistani Commissioner and the Indian Commissioner
Counter-Memorial India’s Counter-Memorial dated 23 November 2011
Court The Court of Arbitration in these proceedings as constituted pursuant
to Article IX(5) and Annexure G of the Treaty
CWPC India’s Central Water and Power Commission
CWPC Letter Letter from the Chairman of the CWPC to India’s Ministry for
Irrigation and Power dated 16 May 1960 (Annex IN-54)
Dead Storage As defined at Paragraph 2(a) of Annexure D to the Treaty, “that
portion of storage which is not used for operational purposes.”
Dead Storage Level As defined at Paragraph 2(a) of Annexure D to the Treaty, “the level
corresponding to Dead Storage”
EIA Environmental impact assessment
First Dispute As stated in Pakistan’s Request for Arbitration, the dispute between
the Parties as to:
Whether India’s proposed diversion of the river Kishenganga
(Neelum) into another Tributary, i.e. the Bonar-Madmati Nallah,
being one central element of the Kishenganga Project, breaches
India’s legal obligations owed to Pakistan under the Treaty, as
interpreted and applied in accordance with international law,
including India’s obligations under Article III(2) (let flow all the
waters of the Western rivers and not permit any interference with
those waters) and Article IV(6) (maintenance of natural channels)
First Meeting Meeting convened by the Court with the Parties on 14 January 2010
pursuant to Paragraph 14 of Annexure G to the Treaty
ICOLD International Commission on Large Dams
Indian Commissioner Commissioner for Indus Waters appointed by India pursuant to
Article VIII(1) of the Treaty
PK-IN 82842 viii
Kishenganga/Neelum River The river called the “Kishenganga” by India and the “Neelum” by
(or Kishenganga/Neelum or Pakistan
River)
KHEP Kishenganga Hydro-Electric Project
11 March 2009 Letter Pakistani Commissioner’s letter to the Indian Commissioner dated
11 March 2009 (Annex PK-194)
MCM Million cubic metres
Memorial Pakistan’s Memorial dated 27 May 2011
Morris Report Expert report by Dr Gregory L. Morris submitted by Pakistan with its
Reply; “Response to Items A, B and C in Chapter 7, Counter-
Memorial of the Government of India”
Neutral Expert The neutral expert appointed pursuant to Annexure F to the Treaty
who rendered the Baglihar Determination
NJHEP Neelum-Jhelum Hydro-Electric Project
Order on Interim Measures Order on the Interim Measures Application of Pakistan dated June 6,
2011
Pakistani Commissioner Commissioner for Indus Waters appointed by Pakistan pursuant to
Article VIII(1) of the Treaty
Parties The Islamic Republic of Pakistan and the Republic of India
PCA Permanent Court of Arbitration
Rejoinder India’s Rejoinder dated 21 May 2012
Reply Pakistan’s Reply dated 21 February 2012
Request for Arbitration Pakistan’s Request for Arbitration dated 17 May 2010
Run-of-River Plant As defined at Paragraph 2(g) of Annexure D to the Treaty, “a hydro-
electric plant that develops without Live Storage as an integral part of
the plant, except for Pondage and Surcharge Storage.”
Schleiss Report “Note on Second Dispute regarding Drawdown Flushing,” expert
report by Prof. Dr Anton J. Schleiss submitted by India with its
Rejoinder
PK-IN 82842 ix