Read the full judgement
I am quoting the conclusion part , here.
1. Pakistan’s Claims Satisfy the Test of Plausibility
140. Pakistan’s claims of Treaty violation challenge the permissibility of the construction and operation of the KHEP on the river Kishenganga/Neelum. At this stage in the proceedings, the Court has not and cannot form any views as to the merits of Pakistan’s claims.212 That said, the Court is satisfied that Pakistan has presented a plausible, provisionally tenable argument under the Treaty in support of its case. Having reviewed Pakistan’s arguments as they are stated in its Memorial, the Court cannot exclude the possibility that India’s planned installations, or elements of those installations, on the kishenganga/Neelum would not be in conformity with the Treaty.213
211 The OXFORD ENGLISH DICTIONARY (Concise 11th ed. 2008) defines “necessary” as a synonym of “required to be done, achieved, or present; needed.” (at p. 956). Similarly, the NEW OXFORD AMERICAN DICTIONARY (3d ed., 2010) provides the following synonyms for “necessary”: “required to be done, achieved, or present; needed; essential.”
212 In this context, the Court stresses the provision of Paragraph 28(b) of Annexure G, pursuant to which “the specification of such interim measures shall not be construed as an indication of any view of the Court on the merits of the dispute.”
213 Article III of the Treaty, “Provisions regarding Western Rivers,” provides:
(1) Pakistan shall receive for unrestricted use all those waters of the Western Rivers which India is under obligation to let flow under the provisions of Paragraph (2).
2. Temporarily enjoining India’s construction of many components of the KHEP (including the headrace tunnel and powerhouse facility) is not necessary to avoid prejudice to the Award.
141. In considering which aspects of the KHEP present a real risk of “prejudice to the final solution” of the dispute
, the construction schedule of the KHEP as compared to the procedural timetable of the present arbitration is of critical importance.214 Under the current timetable, the Court intends to communicate its final Award to the Parties late in 2012 or early in 2013.215 It follows that it cannot be “necessary” to order a halt of any construction activity on the KHEP that will take place after the issuance of the Court’s final Award.
216 On the other hand, specific works put at issue in the dispute that are scheduled to commence soon, and are likely to have reached a certain degree of permanence by the time the Award will be rendered, create by that token a risk of “prejudice to the final solution . . . of the dispute,” thereby rendering an interim measures order “necessary.”
142. In the Court’s view, the suspension of many of the key components of construction activity of the KHEP, such as the boring of tunnels and the construction of the power house, does not appear to be “necessary” to safeguard its ability to render an effective Award. As seen during the Court’s site visit, the construction and completion of these elements of the KHEP occur at some distance from the Kishenganga/Neelum riverbed, and would thus not in and of themselves affect the flow of the river. Thus, even under the hypothesis that the Court finds at the merits stage that Pakistan’s claims, or elements of those claims, are meritorious and the KHEP cannot be completed and put into operation as planned, no violations of Pakistan’s rights would have been caused by the tunneling and power house construction aspects of the KHEP, and no particular remedies seem to be available from the Court in this regard (at least as far as the Court can see at this early phase in the proceedings).Its interesting observation. India could do any type of activities near the river except disturbing the flow of water. Also if fait accompli is presented by construction at the river bed, COA would have found it difficult to issue even interim measures. This presents unique possibilities in so far as such activities are concerned. Like India can do all other works even without notifying Pakistan if such works are "presently not connected with river". Also India could work in parallel and start construction on the River itself so as to present fait accompli. This would be some what difficult.
143. In the Court’s view, the continuation of such activity is appropriately governed by the “proceed at own risk” principle of international law, as specifically recognized by India during the hearing. The situation would merely be one in which India would have invested considerable sums of money without reaping the benefit of the operation of the KHEP as currently
envisaged. This, however, is precisely the risk that India has declared it is willing to assume, and there seems to be no further risk of “prejudice to the final solution,”
in terms of the Court’s Award, in allowing these aspects of the KHEP’s construction works to proceed.
(2) India shall be under an obligation to let flow all the waters of the Western Rivers, and shall not permit any interference with these waters, except for the following uses, restricted . . . in the case of each of the rivers, The Indus, The Jhelum and The Chenab, to the drainage basin thereof:
[. . .]
(d) Generation of hydro-electric power, as set out in Annexure D.
Whether or not construction and operation of the KHEP on the Kishenganga River is or would be an “interference” with the flow of the waters of the Indus River system into and through Pakistan or is or would be an authorized exception to such interference is a question – indeed, the question – for the merits of the dispute before the Court. It cannot and will not be addressed in this Order.
214 An updated construction schedule was handed by the Government of India to the Court of Arbitration and the Government of Pakistan on the last day of the hearing on interim measures. It forms part of the case file as Exhibit IN-21.
215 The Court notes, in this regard, that the hearing on the merits in this case is currently scheduled for August 20 to 31, 2012 (Procedural Order No. 1, para. 5.2.2(a)), and that the Court “shall endeavour to render its Award within 6 months of the close of the hearings.” (Supplemental Rules of Procedure, Art. 16).
216 In this connection, the Court refers to India’s assurances that the delivery of the waters from the Kishenganga into the Bonar-Madmati Nallah will not occur before 2015 (E-mail Communication of March 17, 2011 from counsel for India, Application for Provisional Measures dated June 6, 2011, Appendix ,
and that India will inform the Court and Pakistan of any significant developments concerning the construction schedule of the KHEP (Interim Measures Hearing Transcript, 270:2-6).
3. Temporarily enjoining the operation of the bypass tunnel is not necessary to avoid prejudice to the Award
144. In its pleadings217 and during the hearing on interim measures,218 India maintains that the construction and operation of the KHEP’s by-pass tunnel219 at the Gurez site does not violate the Treaty, as that tunnel is a permitted “temporary by-pass” under Article I(15)(b) of the Treaty, and is therefore not an “interference with the waters” of the Kishenganga/Neelum. Pakistan disagrees with this interpretation.220
145. At this stage in the proceedings, the Court finds that this issue has not been fully briefed. Nonetheless, consistent with the nature of interim measures, the Court, on a provisional basis, cannot exclude that the by-pass tunnel of the KHEP at the Gurez site is a “temporary by-pass” within the meaning of Article I(15)(b), as that provision relates to Article III(2) of the Treaty. The Court also notes that, as described by India, the KHEP by-pass tunnel is, by its very nature,intended to be essentially of temporary use and would thus not by itself be capable of rendering more or less likely the implementation of any remedies that the Court may decide upon in its Award. The same can be said for the temporary cofferdams.
4. Temporarily enjoining India’s construction of certain elements of the dam at the Kishenganga/Neelum riverbed is necessary to avoid prejudice to the Award
146. Conversely, the Court considers that the construction of the permanent dam which India proposes to emplace in and on the Kishenganga/Neelum riverbed falls squarely within the category of works that create a significant risk of “prejudice to the final solution.”
Although the dam component of the KHEP presumably accounts for only a fraction of the overall construction costs, Pakistan’s legal arguments are, in essence, conditional upon its completion. It is the dam that would eventually enable India to exercise a certain degree of control over the volume of water that will reach Pakistan; the temporary obstruction of the river and its channeling through a by-pass tunnel does not have any such effect. Moreover, it is the dam that would eventually place India in a position to divert parts or all of the waters of the Kishenganga/Neelum river into the Bonar-Madmati Nallah, thus potentially affecting water supplies in downstream areas of the Neelum valley.
147. Accordingly, while the dam is of course intended to function as only one (albeit integral) part of a complex hydro-electric installation, it is clear that it is a key component of Pakistan’s complaints of breaches of the Treaty. A temporary halt to the construction of the dam would, in the Court’s view, go a long way toward avoiding any situation of potential inconsistency with the Treaty while these proceedings are ongoing. It is the Court’s conclusion that so holding is in accordance with the purport of the Indus Waters Treaty system, which the arbitration mechanism in Article IX and Annexure G is intended to serve.
148. Moreover, even if the Court were ultimately to reject Pakistan’s arguments regarding the alleged illegality of the KHEP in all its elements, as it fully retains the option of doing, the Court at this stage cannot rule out that adjustments to the design of the KHEP dam or related works at the Gurez site may be required. The entirely unconstrained construction of the KHEP pendente lite thus presents a risk of constricting the legal principles to which the Court may have recourse in its Award. Continued construction may also have the effect of foreclosing, delaying the implementation of, or rendering disproportionately large the cost of particular remedies that the Court may choose to order
.221 It is not difficult to envisage a situation where the construction of permanent works leading to the erection of a dam on the riverbed runs the risk of a prejudicial fait accompli
, as the existence of such works would inevitably need to be taken into account in any consideration of remedies should a breach of the Treaty be determined to have occurred.
149. The Court understands that activities to prepare the construction of the dam in the riverbed at the Gurez site are set to commence in November 2011, some two-odd months away;
such activity is thus imminent. Even under the assumption that any construction activity will slow down significantly over the winter months, the work on the dam could progress at least during the late spring, summer, and early fall of 2012. Based upon the Parties’ submissions and the construction schedule, and bearing in mind the Court’s inspection of the dam site during the site visit, the Court is persuaded that, while the present proceedings are underway, works on the dam are likely to advance to a point where the possible restoration of the flow of the Kishenganga/Neelum to its natural channel will be rendered significantly more difficult and costly to the potential prejudice of any prescriptions that may be made by the Court in its Award.
150. In the circumstances, the Court concludes that the construction of this portion of the KHEP is capable of leading to “prejudice to the final solution . . . of the dispute,” and that it is necessary to enjoin India from proceeding with the construction of permanent works on or above the Kishenganga/Neelum riverbed that may inhibit the full flow of that river to its natural channel until the Court renders its Award.
151. The Court considers that while this arbitration is pending, and subject to any agreement between the Parties as to the implementation of the present Order, India may:
(i) erect temporary cofferdams and operate the by-pass tunnel it has said to have completed;
(ii)temporarily dry out the riverbed of the Kishenganga/Neelum at the Gurez valley;
(iii) excavate the riverbed; and
(iv) proceed with the construction of the sub-surface foundations of the dam. However, as specified above, until the Court renders its Award, India may not construct any other permanent works on or above the riverbed that may inhibit the restoration of the full flow of that river to its natural channel.
V . ORDER
152. Having found that it is necessary to lay down certain interim measures in order to “avoid prejudice to the final solution . . . of the dispute” as provided under Paragraph 28 of Annexure G to the Indus Waters Treaty, the Court unanimously rules that:
(1) For the duration of these proceedings up until the rendering of the Award,
(a) It is open to India to continue with all works relating to the Kishenganga Hydro-Electric Project, except for the works specified in (c) below;
(b) India may utilize the temporary diversion tunnel it is said to have completed at the Gurez site, and may construct and complete temporary cofferdams to permit the operation of the temporary diversion tunnel, such tunnel being provisionally determined to constitute a “temporary by-pass” within the meaning of Article I(15)(b) as it relates to Article III(2) of the Treaty;
(c) Except for the sub-surface foundations of the dam stated in paragraph 151(iv) above, India shall not proceed with the construction of any permanent works on or above the Kishenganga/Neelum riverbed at the Gurez site that may inhibit the restoration of the full flow of that river to its natural channel; and
(2) Pakistan and India shall arrange for periodic joint inspections of the dam site at Gurez in order to monitor the implementation of sub-paragraph 1(c) above. The Parties shall also submit, by no later than December 19, 2011, a joint report setting forth the areas of agreement and any points of disagreement that may arise between the Parties concerning the implementation of this Order.
153. The Court shall remain actively seized of this matter, and may revise this Order or issue further orders at any time in light of the circumstances then obtaining.