Hague, Geneva: The Permanent Court of Arbitration (PCA) has ruled (on 27th June 2025) that it retains full jurisdiction in a high-stakes inter-state arbitration initiated by Pakistan against India under the 1960 Indus Waters Treaty. The Court’s unanimous Supplemental Award on Competence, issued today, reaffirms that India’s unilateral decision to place the Treaty “in abeyance” cannot strip the Court of its authority to adjudicate the ongoing water dispute concerning two run-of-river hydroelectric projects called Kishenganga and Ratle projects, located on rivers that flow from India into Pakistan.

Background of the Dispute
The case, officially titled The Indus Waters Western Rivers Arbitration (Islamic Republic of Pakistan v. Republic of India), is being heard under PCA Case No. 2023-01. It concerns the design and operation of the Kishenganga and Ratle hydroelectric projects, which Pakistan contends violate technical constraints established by the Indus Waters Treaty — a treaty that has long served as a foundational agreement governing water sharing between the two countries, but recently under controversy with India seeking negotiations to amend the treaty.

Parallel Proceedings: Court of Arbitration and Neutral Expert
The dispute has unfolded through two parallel tracks under the Treaty’s dispute resolution mechanisms. In August 2016, Pakistan initiated proceedings before the Court of Arbitration, invoking Article IX and Annexure G of the Treaty. In response, India commenced separate proceedings in October 2016 by requesting the World Bank to appoint a Neutral Expert under Annexure F, addressing questions that substantially overlap with those raised by Pakistan.

Due to the simultaneous activation of both mechanisms, the World Bank paused both appointments in December 2016—a pause lifted in 2022. As a result, the Court of Arbitration was empaneled and the Neutral Expert appointed. In its press release, the PCA noted that while the Court refrains from assessing the competence of the Neutral Expert, it found that “to the extent a neutral expert is competent,” the same principles affirmed in the Supplemental Award apply: namely, that unilateral actions—such as India’s claim of Treaty “abeyance”—cannot extinguish the expert’s jurisdiction. This means that the Neutral Expert, like the Court, may continue his mandate regardless of India’s recent position.

The PCA’s Supplemental Award
In the 27 June ruling, the PCA made clear that “India’s position on ‘abeyance’ of the Treaty does not limit the competence of the Court over this dispute.” The Court emphasized that once arbitration has been initiated, neither party can suspend or halt the proceedings by unilateral action. “The Court found that its competence cannot be affected by the unilateral decision of a Party taken after the initiation of the arbitral proceedings,” the press release stated.

India’s “Abeyance” Declaration Rejected
The Supplemental Award comes after India, in April 2025, declared the Treaty would be held “in abeyance” following an attack by gunmen in Jammu and Kashmir. India accused Pakistan of supporting cross-border terrorism and claimed its sovereign right to suspend Treaty obligations. However, the PCA rejected the legal basis of this claim, concluding that “the terms of the Treaty, read in light of the Treaty’s object and purpose, do not allow either Party, acting unilaterally, to hold in abeyance or suspend an ongoing dispute settlement process.”

India’s Reaction: A Rejection of Jurisdiction
India’s reaction to the decision was swift and categorical. In a statement issued in New Delhi, the government called the Court “illegally-constituted” and declared the award “illegal and per se void.” The Indian government reiterated its longstanding position that the PCA’s authority in this matter is fundamentally flawed, stating, “India has never recognised the existence in law of this so-called Court of Arbitration.” The statement further asserted that “until Pakistan credibly and irrevocably abjures its support for cross-border terrorism,” India would remain unbound by Treaty obligations.

“This latest charade at Pakistan’s behest is yet another desperate attempt by it to escape accountability for its role as the global epicenter of terrorism,” India stated.

Pakistan’s Response: A Call for Dialogue
Pakistan, by contrast, welcomed the Court’s ruling, calling it a reaffirmation of the rule of law and due process under the Indus Waters Treaty. In its official response, Pakistan stated: “The Court has affirmed its Competence in the light of recent developments and that unilateral action by India cannot deprive either the Court or the Neutral Expert, in the proceedings initiated by India, of their competence to adjudicate the issues before them.” The government expressed hope that the two nations could resume a constructive dialogue. Referencing remarks by Prime Minister Muhammad Shehbaz Sharif on June 24, the statement noted that “Pakistan is ready to engage in a meaningful dialogue with India on all outstanding issues, including Jammu & Kashmir, water, trade and terrorism.”

Composition of the Court
The Court of Arbitration is chaired by Professor Sean D. Murphy (United States) and includes Professor Wouter Buytaert (Belgium), Professor Jeffrey P. Minear (United States), Judge Awn Shawkat Al-Khasawneh (Jordan), and Dr. Donald Blackmore (Australia). The arbitration proceedings are administered by the PCA, headquartered at the Peace Palace in The Hague.

Next Steps
The case remains in its merits phase, following a July 2024 hearing. A final award on the substantive issues of the dispute is expected in due course. For now, the PCA’s ruling sends a strong message about the binding nature of international legal mechanisms and the limitations on unilateral action in treaty-based dispute resolution.

Here is a copy of Press Release Issued by Permanent Court of Arbitration:

Full Text of Statement by India:

Matters pertaining to the illegally-constituted so-called Court of Arbitration

June 27, 2025

Today, the illegal Court of Arbitration, purportedly constituted under the Indus Waters Treaty 1960, albeit in brazen violation of it, has issued what it characterizes as a “supplemental award” on its competence concerning the Kishenganga and Ratle hydroelectric projects in the Indian Union Territory of Jammu and Kashmir.

2. India has never recognised the existence in law of this so-called Court of Arbitration, and India’s position has all along been that the constitution of this so-called arbitral body is in itself a serious breach of the Indus Waters Treaty and consequently any proceedings before this forum and any award or decision taken by it are also for that reason illegal and per se void.

3. Following the Pahalgam terrorist attack, India has in exercise of its rights as a sovereign nation under international law, placed the Indus Waters Treaty in abeyance, until Pakistan credibly and irrevocably abjures its support for cross-border terrorism. Until such time that the Treaty is in abeyance, India is no longer bound to perform any of its obligations under the Treaty. No Court of Arbitration, much less this illegally constituted arbitral body which has no existence in the eye of law, has the jurisdiction to examine the legality of India’s actions in exercise of its rights as a sovereign.

4. India, therefore, categorically rejects this so-called supplemental award as it has rejected all prior pronouncements of this body.

5. This latest charade at Pakistan’s behest is yet another desperate attempt by it to escape accountability for its role as the global epicenter of terrorism. Pakistan’s resort to this fabricated arbitration mechanism is consistent with its decades-long pattern of deception and manipulation of international forums.

New Delhi
June 27, 2025

Full Text of Statement by Pakistan:

Pakistan welcomes the Supplemental Award by the Court of Arbitration in the Indus Waters matter that has been handed down today and made public on the website of the Permanent Court of Arbitration.  Pakistan notes that the Court has affirmed its Competence in the light of recent developments and that unilateral action by India cannot deprive either the Court or the Neutral Expert, in the proceedings initiated by India, of their competence 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.

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.  To this end, and reaching out to India, Prime Minister of Pakistan Muhammad Shehbaz Sharif said on 24 June 2025, in widely publicised remarks, that Pakistan is “ready to engage in a meaningful dialogue with India on all outstanding issues, including Jammu & Kashmir, water, trade and terrorism.”

⊕ Watch VIDEO – India Holds Indus Water Treaty in Abeyance: Relevant Factors That Will Decide What’s Next