The court issued the “Supplemental Award” on the proceedings instituted by Pakistan against India.
“Consistent with this interpretation of the Treaty, the Court has previously found that once a proceeding before a court of arbitration is properly initiated, as in the present case, “there must be a strong presumption against the incidental loss of jurisdiction over the matters placed before it by subsequent acts, such as the appointment of a neutral expert.
“Accordingly, the text of the Treaty, read in light of its object and purpose, does not to allow either party, acting unilaterally, to hold in abeyance or suspend an ongoing dispute settlement process,” the order read.
The Supplemental Award said that “the text … does not provide for the unilateral “abeyance” or “suspension” of the Treaty. Rather, the Treaty provides for its continuation in force until terminated by mutual consent by India and Pakistan”.
“Such text definitively indicates an intent by the drafters not to allow for unilateral action to alter the rights, obligations, and procedures established by the Treaty, including the treaty’s dispute settlement procedures.
“Additionally, the object and purpose of the Treaty, as expressed in its Preamble, includes establishing procedures for the resolution “of all such questions as may hereafter arise in regard to the interpretation or application of the provisions agreed upon in the Treaty.”
The order added, “To that end, the Treaty’s procedures, inter alia, call for the establishment of a court of arbitration at the request of one of the parties, and provide that such court of arbitration, after receiving written and oral submissions, is empowered to render an award or awards that “shall be final and binding upon the Parties with respect to that dispute.”
“It is difficult to see how this object and purpose of the Treaty — compulsory dispute resolution for definitive resolution of disputes arising between the Parties — could possibly be achieved if it were open to either Party, acting unilaterally, to suspend an ongoing dispute settlement process. Such an interpretation would fundamentally undermine “the value and efficacy of the Treaty’s compulsory third-party dispute settlement process”.
The award, made public on the website of the Permanent Court of Arbitration, was welcomed by Pakistan, saying that it affirmed the court or the neutral expert’s competence despite India’s unilateral action.
Through a request for arbitration on August 19, 2016, Pakistan initiated the arbitration proceedings against India, seeking to resolve certain issues concerning the design or operation of run-of-river hydro-electric plants on the Indus, Jhelum, and Chenab rivers and their tributaries.
The plants included the Kishenganga Hydro-Electric Plant and the Ratle Hydro-Electric Plant. After the filing of Pakistan’s request for arbitration, India requested for the appointment of a neutral expert to resolve certain design and operation questions concerning the two projects.
On October 13, 2022, the World Bank, which had brokered the IWT 65 years ago, appointed Michel Lino as a neutral expert pursuant to Article IX and Annexure F to the Treaty. In April 2025, after the Pahalgam attack, India said it was holding the IWT in abeyance as a punitive measure against Pakistan.
“The Court of Arbitration unanimously finds: A) India’s position that it is holding the Treaty in “abeyance”, however, that position may be characterized as a matter of international law, does not deprive the Court of Arbitration of competence,” the ruling said.
“B) finds that the Court of Arbitration has a continuing responsibility to advance its proceedings in a timely, efficient, and fair manner without regard to India’s position on “abeyance”, and that a failure to do so would be inconsistent with its obligations under the Treaty,” it added.
“C. DETERMINES that the above findings apply, mutatis mutandis, with respect to any competence that the Neutral Expert otherwise possesses. D. RESERVES for further consideration and directions all issues not decided in this Award.”
The Court of Arbitration is led by Prof Sean D Murphy and included Prof Wouter Buytaert, Prof Jeffrey P Minear, Judge Awn Shawkat Al-Khasawneh and Dr Donald Blackmore. It said that according to IWT, technical questions could be placed before a neutral expert or an arbitral panel.
Pakistan, meanwhile, welcomed the Supplemental Award, noting that the Court affirmed its competence in the light of recent developments and that India’s unilateral action could not deprive either the Court or the neutral expert to adjudicate the issues before them.
“Pakistan looks forward to receiving the Court’s Award on the First Phase on the Merits in due course following the hearing that was held in Peace Palace in The Hague in July 2024,” said an official handout issued after the ruling was published on the court’s website.
“The high priority, at this point, is that India and Pakistan find a way back to a meaningful dialogue, including on the application of the Indus Waters Treaty,” it said. It referred Prime Minister Shehbaz Sharif’s remarks this week that Pakistan was “ready to engage in a meaningful dialogue with India”.