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In a significant victory for India in its ongoing dispute with Pakistan over the Indus Water Treaty, the Neutral Expert has ruled in favour of India. The Neutral Expert, on January 20, 2025, passed his decision1 on his competence to decide on the Points of Differences between India and Pakistan on the design of the Ratle and Kishenganga Hydroelectric (HE) Projects.
The Neutral Expert's decision on his competence confirmed his authority to examine whether India's designs for the Kishanganga HEP and Ratle HEP plants conform to Paragraph 8 of Annexure D of the Treaty. Accepting that while some questions require interpreting other parts of the Treaty, the Neutral Expert held that these are "incidental questions" that still fall within his scope. Accordingly, the Neutral Expert determined that he can proceed to evaluate the merits of India's Points of Difference.
Background
India and Pakistan have locked horns over two Indian hydroelectric projects namely, 850 MW Ratle HE Project on Chenab main and 330 MW Kishenganga HE Project on river Kishenganga, a tributary of river Jhelum. In 2007, Pakistan raised six objections to India's Kishenganga project. Four of them were regarding design of the project and two concerning legal aspects of water diversion and reservoir silt management. While these were being discussed at the Commission level, Pakistan in 2009 took two legal issues to the Permanent Court of Arbitration.
The Court of Arbitration, formed in 2010, addressed two key disputes of the legality of water diversion for power generation and the permissibility of lowering reservoir water below Dead Storage Level for sediment flushing. After extensive proceedings, the Court issued its Partial and Final Awards in 2013 and upheld India's right to divert water, subject to a minimum release of 9 cumecs. The Court also prohibited India from bringing the water down below Dead Storage Level at Kishenganga and future hydroelectric projects on Western rivers, though exempting existing projects. The Court thus proscribed a sediment management technique known as drawdown flushing by India in hydroelectric projects on Western Rivers.
After resolving two legal issues through the Court of Arbitration, four technical disputes concerning the Kishenganga dam's design remained under discussion between India and Pakistan. One issue regarding freeboard was amicably resolved in 2014 by the two Commissioners. Meanwhile in 2012, Pakistan raised similar objections to the Ratle Hydroelectric Project in 2012, which also remained under discussion through 2015. In 2016, Pakistan unilaterally approached the World Bank to establish a Court of Arbitration to resolve these issues – three for Kishenganga and four for the Ratle HE Project.
India, on the other hand, asserted that the technical complexities of the dispute warranted resolution through a Neutral Expert, rather than proceeding with the Court of Arbitration.
This approach mirrored the precedent set by the Baglihar Hydroelectric Project case when the differences were settled by the Neutral Expert, Professor Raymond Lafitte, a Swiss national, civil engineer and professor at the Swiss Federal Institute of Technology in Lausanne , appointed by the World Bank in May 2005. Consequently, India simultaneously submitted a formal request for the appointment of a Neutral Expert.
Despite India's position, the World Bank initiated both processes simultaneously - the appointment of a Neutral Expert and the constitution of the Court of Arbitration. Following strong protests from India, the World Bank suspended both processes to encourage amicable resolution. However, in 2022, the World Bank lifted this suspension and proceeded with both mechanisms: constituting the Court of Arbitration and also appointing Mr Michel Lino, as the Neutral Expert.
The Indus River system. | Times of India.
Michel Lino is a distinguished French engineer specializing in hydropower and dam engineering, with an impressive 39-year professional career dedicated to hydraulic infrastructure. His extensive expertise spans large dams, hydroelectric facilities, river infrastructure, hydrology, and seismic risk assessment. Throughout his career, Lino contributed significantly to the field through his technical insights and professional guidance, establishing himself as a prominent voice in engineering circles. Notably, Lino held the role of vice president of the International Commission of Large Dams (ICOLD) from 2016 to 2019, and currently serves as the organization's president, further solidifying his leadership in the international dam engineering community.
Currently, India participates only in the Neutral Expert proceedings while boycotting the Court of Arbitration process on its principled position that the constitution of this Court of Arbitration is in contravention of the provisions of the Indus Waters Treaty.
Although the Court, in its Award dated 6 July 2023, held that India’s non-appearance in these proceedings does not deprive the Court of Arbitration of competence to address all questions raised in Pakistan’s Request for Arbitration, India rejected the Court’s observation and reiterated its "consistent and principled" position. Earlier, miffed with these developments and amid Islamabad's "intransigence" on its implementation, India announced in January 2023 its intention to modify the Indus Water Treaty, which has governed water-sharing between the two nations for seven decades.
The Proceedings of the Neutral Expert
In the proceedings before the Neutral Expert, Pakistan changed its position from earlier views that similar issues were appropriate for a Neutral Expert. Pakistan argued that the issues went beyond technical matters and involved broader Treaty interpretation and therefore the "systemic" issues affecting multiple plants should be handled differently. Pakistan also requested deferral, pending a separate Court of Arbitration decision on the ground that the matters overlapped with ongoing Court of Arbitration proceedings
Before the Neutral Expert, India held back to its principled position that as per Article IX of the Treaty, when a question arises concerning the interpretation or application of this Treaty, it is first taken to the Permanent Indus Commission, comprising two Commissioners from either country; if the differences are not resolved, then either party can escalate the issue to a Neutral Expert. The matter can be taken to the Court only under two conditions - one, if both the parties agree that the issue requires legal interpretation of the Treaty and two, when the Neutral Expert appointed earlier, refers the matter to the Court of Arbitration. But in the present case, both options were not followed and Pakistan unilaterally and illegally took the matter to the Court of Arbitration. India also submitted that during the pause, she offered, on multiple occasions, the possibility of discussing and resolving the issues bilaterally at the level of the Permanent Indus Commission. This has not been possible due to lack of cooperation from Pakistan.
The Neutral Expert’s Analysis
After considering the submissions from both sides, the Neutral Expert set aside Pakistan’s argument that the points of difference are outside his competence on the ground that the questions put to him by India have a systemic effect beyond the individual plant. He agreed that his competence is plant-specific but held that this limitation does not serve to take any of the points of difference outside the scope of his competence.
Pakistan's argument that the issue requires the interpretation of the Treaty and therefore beyond his competence was also dismissed by the Neutral Expert with the view that the need to interpret Treaty provisions does not remove issues from his competence. He stressed that he can refer matters outside competence to other procedures if needed.
Pakistan’s submission to hold the proceedings, pending a separate Court of Arbitration decision was also not considered by the Neutral Expert who held that although the Court of Arbitration is separately considering related but broader issues, the parallel proceedings do not prevent examining the differences and there is no requirement to defer the proceedings on the matter before him.
The Neutral Expert admitted that "technical" questions can involve legal interpretation but held that needing to interpret other Treaty provisions does not remove his jurisdiction over design-related differences. He confirmed his jurisdiction over the issues and decided to proceed to examine the merits of Points of Difference rather than wait for the award of the Court of Arbitration. The Neutral Expert clarified that his decision will be binding for Kishenganga HE Project (KHEP) and Ratle HE Project (RHEP) specifically
Conclusion
This decision of the Neutral Expert is concerned solely with issues related to the competence of the Neutral Expert, and is not intended to address the merits of any aspect of the Points of Difference. The decision concludes that the Neutral Expert will move forward to examine the merits of India's questions regarding the plant designs, while maintaining the ability to refer any matters found to be outside their competence to other dispute resolution procedures under the Treaty
This decision represents a significant clarification of the role of Neutral Experts under the Indus Waters Treaty, particularly in cases where technical and legal issues intersect. It affirms that technical expertise can coexist with legal interpretation while maintaining clear jurisdictional boundaries. The Neutral Expert's decision to proceed despite parallel proceedings also shows pragmatic approach to dispute resolution, especially given India's non-participation in the Court of Arbitration proceedings. This could have important implications for future water-related disputes between India and Pakistan.
The Road Ahead
Quite obviously, India welcomed the decision vindicating her stance that the seven questions referred to the Neutral Expert in the Kishenganga and Ratle hydroelectric projects fall within his competence under the Indus Waters Treaty. The Neutral Expert is expected to proceed on merits and provide his Determination in a couple of years.
The current resolution, however, is the beginning of a series of disputes in the time to come on India’s upcoming projects, namely Kiru (624 MW), Kwar (540 MW), Kirthai I & II (1320 MW) and Sawalkote (1856 MW). Pakistan may continue to weaponize the Treaty as a political instrument, potentially spreading narratives about water theft and strategically impeding India's development in the Indus basin. This approach follows Pakistan's tendency to prioritize perceived Indian losses over mutual benefits.
India must respond strategically by accelerating development on Western rivers, pursuing proactive Treaty renegotiations, and systematically countering Pakistan's selective interpretations. The ongoing diplomatic and technical engagement around the Indus Waters Treaty underscores the complex geopolitical dynamics of transboundary water resources in the region. India's measured and principled approach will be crucial in navigating these challenges.
(Exclusive to NatStrat)
Endnotes:
1. The decision can be downloaded from the website of the Permanent Court of Arbitration (https://pca-cpa.org)
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