The Court of Arbitration constituted in the matter of the Indus Waters Kishenganga Arbitration (Pakistan v. India) yesterday rendered its Final Award in respect of the dispute between Pakistan and India under the Indus Waters Treaty involving the Kishenganga Hydro-Electric Project (the “KHEP”) located on the Kishenganga/Neelum River.

On February 18, 2013, the Court had issued a Partial Award, in which it unanimously decided that the KHEP is a Run-of-River Plant within the meaning of the Indus Waters Treaty and that India may accordingly divert water from the Kishenganga/Neelum River for power generation. However, the Court also decided that India is under an obligation to construct and operate the KHEP in such a way as to maintain a minimum flow of water in the Kishenganga/Neelum River, at a rate to be determined subsequently. Also in its Partial Award, the Court decided a second dispute relating to the permissibility of reducing the water level in the reservoirs of Indian Run-of-River Plants on certain tributaries of the Indus for the purpose of flushing sediment accumulated in the reservoir.

In its Final Award dated December 20, 2013, which is binding upon the Parties and without appeal, the Court of Arbitration unanimously decided the question of the minimum flow that was left unresolved by the Partial Award. The Court decided that India shall release a minimum flow of 9 cumecs into the Kishenganga/Neelum River below the KHEP at all times. However, the Court also decided that either India or Pakistan may seek reconsideration of this decision through the Permanent Indus Commission and the mechanisms of the Indus Waters Treaty after a period of seven years from the first diversion of water from the Kishenganga/Neelum River.