India refuses to recognise Court of Arbitration’s order that favours Pakistan

India has blatantly refused to accept the Permanent Court of Arbitration’s ruling that it was competent to look into Pakistan’s case about the Kishenganga and Ratle hydroelectric projects under the Indus Waters Treaty.

The Hague-based Court of Arbitration gave an award on July 03, 2023 on a 2016 case brought by Pakistan under Article IX and Annexure G of the Indus Waters Treaty. India asked the World Bank for appointment of a Neutral Expert on the same matter in the same year.

In December 2016, World Bank paused the process of appointing the Chairman of the Court of Arbitration and Neutral Expert. The embargo was removed after six years and both the processes – Court of Arbitration and Neutral Expert – were instituted.

Ahead of the first meeting, India sent a letter in December 2022 to the World Bank expressing doubt over the competence of the Court of Arbitration. This letter was then conveyed to the Court of Arbitration. India didn’t take part in CoA’s proceedings and also did not exercise its right to appoint two arbitrators to the panel.

Based on India’s objections in the letter, the Court of Arbitration observed in a press release that it could adjudicate on the matter.

“In a unanimous decision, which is binding on the Parties and without appeal, the Court rejected each of the objections raised by India and determined that the Court is competent to consider and determine the disputes set forth in Pakistan’s Request for Arbitration,” said the press release of the PCA.

India’s Ministry of External affairs termed the “constitution of the Court of Arbitration in contravention of the provisions of the Indus Waters Treaty”.

A MEA press note asserted that “India cannot be compelled to recognise or participate in illegal and parallel proceedings not envisaged by the Treaty”.

It noted that the Indian government is in talks with Pakistan “regarding the modification of the Indus Waters Treaty under Article XII (3) of the Treaty”. “This recent development only underlines why such modification is so necessary,” added MEA press release.

According to the press release uploaded on the official website of the Permanent Court of Arbitration, The Hague, in the light of its findings in relation to India’s objections, the court unanimously made the findings and declarations which include that India’s non-appearance in these proceedings does not deprive the court of competence. The court has authority, in accordance with Paragraph 16 of Annexure G to the Indus Waters Treaty 1960, to decide all questions relating to its competence.

The PCA also finds that the matters referred to arbitration in Pakistan’s request for arbitration concern a dispute or disputes within the meaning of Article IX(2) of the Indus Waters Treaty 1960. And the initiation of the present proceedings was in accordance with Article IX (3), (4), and (5) of the Indus Waters Treaty 1960. The PCA also says that the court was properly constituted in accordance with Paragraphs 4 to 11 of Annexure G to the Indus Waters Treaty 1960.

India had raised six objections which are i) the constitution of the court of arbitration is illegal, ii) the court doesn’t have the competence to listen to the case, iii) it is not yet established that the issue about changes in designs of the projects is a dispute as a dispute can be resolved at the PCA forum so it should be taken up by a neutral expert as it is the difference between Pakistan and India, not the dispute, iv) Pakistan had not satisfied the procedural requirements of Articles IX(3), (4), and (5) of the Treaty before initiating these proceedings, v) Article IX (6) of the Treaty prevented the court from considering the questions “being dealt with by” the neutral expert and vi) the procedure for empaneling the court of arbitration, set out in Annexure G to the Treaty, had not been complied with in the present case, with the consequence that there was no effectively constituted court of arbitration.

The court of arbitration, with the help of the provisions enshrined in the Indus Waters Treaty and past cases of hydropower projects, rejected the six objections raised by India.