In a landmark decision that can bring a breakthrough to South Asian water diplomacy, an international arbitration tribunal has categorically denied India its demand to suspend the 65-year-old Indus Waters Treaty and has ordered modifications in the dispute over several hydroelectric schemes that Pakistan has argued undermine its water security.
The 2025 arbitration award of the Court of Arbitration under the Permanent Court of Arbitration (PCA) marks the most significant event in the 65-year history of the treaty, with critical questions in relation to treaty stability, water rights, and international law in one of the most unstable regions of the world.
Background of the Case: From Treaty Success to Crisis
The Indus Waters Treaty, signed on September 19, 1960, between India and Pakistan, brokered by the World Bank, is one of the most enduring and strong international water treaties. Through the accord, the waters of the Indus River system are shared, with India being granted control of the three eastern rivers (Ravi, Beas, and Sutlej) and Pakistan being granted control over the three western rivers (Indus, Jhelum, and Chenab). India has limited non-consumptive rights to the western rivers in the form of hydroelectric power generation, navigation, and irrigation, but the Treaty binds India not to develop such uses beyond a defined technical limit that follows a technical injunction that does not allow India to divert the free-flowing of water towards affecting the rights of Pakistan to avail free-flowing water.
The treaty also developed an innovative dispute resolution mechanism that included a Permanent Indus Commission and the availability of Neutral Experts and arbitration under Article IX- systems that have enabled the pact to endure four wars and numerous political upheavals across sixty years.
The situation worsened increasingly in April 2025 when a terrorist attack in Pahalgam, Jammu and Kashmir, that was claimed or perpetrated by groups allegedly sponsored by Pakistan aggravated. The decision by India to announce a temporary suspension of the Indus Waters Treaty was dramatic, and it has caused a lot of disturbance to the world’s legal fraternity. This was the earliest indication of a case whereby there was an attempt to unilaterally end the IWT in its 65-year-old history. It was an important turn in water diplomacy, as one expert in international law, who is not a specialist in the situation, describes it. The Indus Waters Agreement governs the rivers that support 300 million people. At its height, it would have been disastrous.
Key Facts of the Case
The factual background given to the Court was based on two critical aspects that are interrelated and mutually entailing, and which determined the future of water relations between the two nuclear-capable neighbors.
1. India’s Unprecedented Suspension Declaration
The declaration by India in April 2025 was a juncture in international treaty law. India defended this momentous decision on security grounds, on the grounds that the alleged sponsorship of terrorism by Pakistan had implications of a massive violation of the Treaty and the general international law. The Indian government claimed that it could not act according to the treaty at the time when it was struggling to contain terror threats, which were supported by the other party.
Pakistan was quick to dismiss this rationale on the basis that the Treaty, like a boundary agreement, could not be suspended regardless of the political or security imperative. The Pakistani officials claimed that such suspension was against the basic concepts of international law in general and pacta sunt servanda (agreements must be kept), Article 26 of the Vienna Convention on the Law of Treaties (VCLT) in particular.
2. Contested Hydroelectric Projects
At the same time, India was raising Pakistan’s eyebrows at Indian hydroelectric projects on the western rivers, particularly on the Kishenganga and Ratle hydro schemes. These points of contention were on all highly technical, but nonetheless strategically sensitive areas of the design that Pakistan has allegedly breached the provision of the treaty, which reads, strangers shall not flow as written in Article III and the commentaries in the explanations of Article III, which are given in Annexure D.
The legal specialists in Pakistan found the following problematic characteristics:
- Gated spillways: These were to be opened or closed at will, as opposed to the ungated spillways that the treaty demanded.
- Low-level sediment outlets: Located so as to possibly divert water flow.
- Excessive pondage capacity: Storage volumes beyond treaty-permitted limits
- Lack of freeboard restrictions: The possible capacity to store it covertly.
As a Pakistani official related to the case, he said, “India was literally tapping our rivers. These attributes enabled them to cut or redirect the water supply at some of the worst times, compromising the agricultural and ecological requirements of Pakistan.
3. Jurisdictional Complications
The cause of the dispute was complicated by the parallel proceedings. India argued that Annexure F to the Final Act of the Great Game was to take into account the technical matters related to the hydroelectric projects by a Neutral Expert rather than the Court of Arbitration. This jurisdictional clash also gave rise to the use of a case within a case since Pakistan claimed that the text of the treaty had to be interpreted as some specific points had to be interpreted, given the fact that it was only the Court that could interpret the text of the treaty on the basis of Article IX.
Issues Before the Court
The tribunal of arbitration encountered a number of legal issues, which were connected to each other and which had extensive consequences for the international water law and the interpretation of treaties:
- Issues as to whether or not the unilateral suspension of the IWT by India could be justified within the Treaty or the general principles of international law.
- Whether the hydroelectric projects of the run-of-river type in India had been built in compliance with the technical specifications in the treaty under Annexure D.
- Did the earlier determinations of Neutral Experts purport to impose some binding precedents in future proceedings?
- Whether parallel proceedings by use of Neutral Expert and Arbitration processes were lawfully co-existent within the dispute resolution framework in the IWT.
- The correct approach to interpretation is to be used in technical annexures under the umbrella treaty.
Arguments of the Parties: A Clash of Legal Doctrines
The arbitration showed huge discrepancies in the interpretation of the Treaty by the two countries and their interpretations of international law, with each presenting complicated legal arguments supported by volumes of expert evidence.
Pakistan’s Legal Strategy
The argument used by Pakistan was premised on three major principles of international law, which provided what the legal analysts called the comprehensive challenge to the unilateral amendment of a treaty.
As far as Treaty Suspension is concerned, the legal representatives of Pakistan argued that international law strictly prohibited the unilateral suspension. Under Articles 60 and 62 of the Vienna Convention on the Law of Treaties (VCLT), Pakistani lawyers demonstrated that the termination of a treaty has to be caused by a material breach of the other party or a fundamental change of circumstances which was absent in this case. They further argued that the IWT was a kind of treaty, like a boundary, and therefore needed more stability, which makes it almost impossible to suspend it through political matters.
As far as project design is concerned, the technical and legal experts in Pakistan conducted comprehensive reviews of Kishenganga and Ratle’s projects, arguing that multiple design aspects violated the rules stipulated in Annexure D.
specifications:
- Low-level outlets that could manipulate downstream flows
- Gated spillways provide excessive operational control
- Pondage capacity exceeding treaty limits
- Design configurations that fundamentally undermined Pakistan’s rights to unrestricted flow
Pakistan argued that India was engaged in attempting to weaponize water resources, in violation of both the specific Treaty commitments and the vital principle of pacta sunt servanda. They argued that India’s conduct could be characterized by bad faith, which threatened the likelihood of the Treaty protecting water security in Pakistan.
Pakistan sought the Court to grant it exclusive jurisdiction under Article IX on the basis that the conflicts required interpretation of the provisions of the Treaty, a duty that could not be entrusted to the technical experts whose duties are limited.
India’s Counter-Arguments
India refused to participate in the proceedings, but their position was nonetheless translated into early submissions and went into legal records.
India referred to Article 62 VCLT with the support that the highly changed conditions, namely, the ones that were plagued by overpopulation, a heightened increase in energy demands, and persistent terrorism, have made it necessary to revisit matters of the Treaty responsibilities. Indian lawyers argued that the environment of the Treaty’s operation had changed so much due to security conditions that it was no longer reasonable to continue with its observance.
India claimed that its hydroelectric schemes were guided by internationally recognized practices that were up to date with current best engineering practices and that they were firmly in accordance with the rights in Annexure D. Indian engineers argued that gated spillways and clearance of sediment ports were not water control measures, but rather essential safety and operational aspects of modern dam building.
India also argued forcefully that the disputes are to be resolved only through the Neutral Expert procedure established under Annexure F, and that the arbitration process was not properly constituted and exceeded its limits of jurisdiction. This position showed India’s general attitude toward limiting the scope of arbitral review.
This was a critical departure from the traditional positions because India stated that Pakistan’s unwillingness to engage in renegotiating the Treaty undermined the spirit of cooperation and gave reason to independent Indian actions. This argument was aimed at finding fault with the stiffness of Pakistan, thereby laying the blame for the crisis.
India’s Defense: Security and Engineering
India refused to participate in the arbitration procedure, stating that the case should be solved by the technical experts rather than the international courts. India had two primary arguments when it had to defend its argument.
First, as it pertains to the treaty suspension, India invoked the notion of fundamental change of circumstances and stated that the phenomena of terrorism, a rising population, and energy needs had changed the conditions so much since 1960 that the obligations under the treaty needed to be reviewed.
Second, with regard to the hydroelectric schemes, India followed its designs, according to the so-called best engineering practices, and fully utilized the treaty provisions. Indian engineers argued that elements like gated spillways and the sediment outlets were necessary so the dams could be operated safely and not as a means of regulating water.
The Tribunal’s Comprehensive Reasoning and Award
In its final decision of 2025, the three-judge Court of Arbitration has offered what international law scholars are calling an exemplary treaty interpretation and international water law case. The unanimous vote of the tribunal in support of Pakistan also showed an ability to carry out thorough legal and technical research.
1. Treaty Suspension: Affirming the Sanctity of Water Agreements
Analysis of the suspension of the treaty was done carefully by the Court, weighing the Vienna Convention on the Law of Treaties and the tradition of international law. The tribunal pointed out that water agreements, particularly those governing cross-boundary arrangements, are accorded exception status under international law.
Main reason:
• No Material Breach: The Court held that even assuming Pakistan’s backing of terrorism constituted no material breach of IWT, as the Treaty bears no anti-terrorism clauses or any security-related undertakings.
• Doctrine of Fundamental Change: The tribunal rejected India based on Article 62 VCLT and explained that the doctrine requires unforeseeable changes that existed at the time of treaty conclusion that change the obligations in its essence, which have not been met in the changing security circumstances.
Boundary Treaty Analogy: The Court ruled that treaties regarding territory and water distribution result in legal regimes which are not to be disrupted by political disputes, referencing a high-profile, ICJ ruling of the same year in the case of the GabčIkovo-Nagymaros Project.
Judicial Reasoning Quote: “Treaties governing territorial or boundary arrangements, such as the IWT, are subject to exceptional stability under international law. Neither political tensions nor terrorism justify suspension of obligations that have created permanent rights and duties.”
2. Jurisdictional Authority: Clarifying Institutional Roles
Competence Confirmed: The Tribunal has examined India’s jurisdictional claims in detail and has determined India’s jurisdiction in the interpretation of the clauses of the Treaty in line with Article IX. The Court differentiated technical fact-finding (Neutral Experts are suitable in such cases), and legal interpretation (in such cases, arbitral action has to be undertaken).
Institutional Framework: The Court was categorical in that the neutral experts and the arbitration courts were not mutually competent; they complemented one another.
- Impartial Experts: the professionals in technical evaluation and objective decision-making.
- Arbitration: Compulsory in the case of a dispute where interpretation of Treaties and issues of law is needed.
3. Hydroelectric Project Analysis: Technical Violations with Legal Consequences
The Methodology: The Court, in fact, utilized the technique of cautious interpretation of Annexure D, Paragraph 8, with regard to the existing system of principles concerning treaty interpretation on one side and, on the other, trusting to the textual interpretation and to the interpretations of practice.
Specific Findings:
- Excessive Pondage (Para. 8(c)): India’s designs provided water storage capacity beyond Treaty-permitted maximums, creating potential for flow manipulation
- Gated Spillways (Para. 8(d)-(f)): The Court found that gated structures gave India undue operational control over water releases, contravening the Treaty’s “let flow” principle
- Sediment Outlets: Low-level outlets were positioned in ways that could divert water from main channels, violating unrestricted flow obligations
- Engineering Standards: The tribunal ruled that compliance with general “best practices” could not override specific Treaty obligations
The treaty obligations must not take precedence over the best practices in engineering. Where the treaty has outlined some technical parameters, they are legally binding requirements, irrespective of the other engineering design methods. 4. Influential Impacts and Upcoming Conflicts
4. Precedential Effects and Future Disputes
The Court holds that the results of the Neutral Expert and arbitration confirm the impact of res judicata (final binding results), which is consistent with the universal principles of arbitration.
The identification consisted of rules on how to coordinate parallel processes and formed the foundation to avoid jurisdictional problems in future conflicts.
5. Legal Remedies and Implementation Orders
Immediate Requirements: The Court has directed India to:
- Closely follow up on compliance by eliminating the treatment of the Treaty as dormant.
- Modify the Kishenganga and Ratle projects to meet the requirements of Annexure D.
- Provide comprehensive technical documentation of a contract to specifications.
- Remain under constant observation for project changes.
Long–term Obligations: The award put in place a long-term obligation of constructive engagement between the parties on the Treaty framework and the avoidance of unilateral interpretation of technical specifications.
The Verdict: A Resounding Victory for Pakistan
In its ruling in 2025, the three-judge arbitration panel supported Pakistan on virtually every major issue, a move that is being termed by legal observers as one of the most successful endorsements of treaty integrity in the recent past of international law.
On Treaty Suspension: ‘Agreements Must Be Kept’
On Dam Design: Technical Violations with Strategic Implications
Immediate Consequences and Long-term Impact
The ruling will see an instant transformation in the water management within the entire basin of the Indus. India has to embrace reforms, which may be expensive to its divisive hydroelectric ventures, whereas Pakistan is acquiring a judicial framework that it has never received under the current water rights norms. It is also a positive development of the dispute resolution process within the agreement and has defined boundaries to the technical expertise assessment and arbitration interpretation procedure.
In addition to the parties, the award sends home a heavy message on the issue of treaty stability as the world faces increasing nationalism and unilateralism. It shows that the international treaties cannot be unilaterally canceled even in the case of terrorism or geopolitical scandals, particularly concerning the most important resources. The ruling sets out important precedents on international water law regarding the defining nature of treaties that are a matter of boundary, as well as the restriction of the fundamental change of circumstances doctrine.
Analysis: Courts and Precedent and Broader Implications
The recent arbitration decision between Pakistan and India in 2025 has been a breaking point in the history of international law that goes beyond international conflict resolution on the bilateral level and is relevant in a wide area beyond South Asia.
Treaty Law Developments
The award especially excels in the provision of a foundation on the pacta sunt servada rule by placing definite boundaries to the suspension and the termination of the treaties. This decision to reject the pleadings of fundamental change by India by the Court creates a significant precedent that restricts the understanding of Article 62 VCLT, at least regarding treaties that address the distribution of permanent territorial or resource agreements.
International Water Law Evolution
The award gives important guidance on the following issues to the expanding transboundary water governance field:
- -Stability requirements of special water allocation treaties.
- The relationship between technical compliance and legal obligations
- The proper balance between engineering flexibility and treaty constraints
- The coordination of multiple dispute resolution mechanisms
Dispute Resolution Innovation
The parallel proceedings exposition in the award provides a significant structure for the multifaceted treaty systems consisting of several institutional regimes. By the express dichotomy of fact-technical analysis and legal interpretation, the Court gives a rule in the avoidance of jurisdictional controversy in other systems of treaty.
Climate Change Adds New Urgency
The decision is quite critical, and hence it is at a critical point. The Himalayas feed the Indus River system, which is under pressure due to climate change. The increase in temperature is changing the pattern of precipitation in both countries and is also threatening the water security of the two countries. The demand that the 2025 award must follow the stipulated treaty to the letter may be thought of as inflexible, but the experts believe that it is essential in stabilization since the two countries are grappling with these new challenges.
A spokesperson of the World Bank on transboundary water issues notes that climate change will exert pressure on the treaty in a manner that has never been witnessed before. This is particularly critical when the resource is overloaded, and it is critical to set effective protocols that can be implemented.
A Model for Global Water Disputes?
The India-Pakistan (Indus Waters) arbitration could have implications for other parties outside South Asia. With the rising global water scarcity, the decisive validation of the sanctity of treaties in the award may be felt by rivers as far as the Nile and Mekong. International law is evident through the decision, as it can continue to be functional even when parties refuse to cooperate effectively.
The prize also shows that despite the polarized world, it is possible to administer a fair and just arbitration to resolve the conflict between hostile neighbors. In the case of India Pakistan (two nations which have fought four wars and have one of the most militarized borders in the world) the selection of Pakistan to use legal methods rather than physical force to settle the dispute not to mention the subsequent Indian acquiescence with the authority of the court on the Indian side show that even in the most difficult circumstances the rule of law is alive and kicking.
Looking Ahead: Implementation barriers.
The easier realization of a major legal victory is done as Pakistan celebrates, as the tougher issue of implementation continues to be witnessed. India must redesign major infrastructure projects, and both states must look into rebuilding trust in the conflict resolution mechanism of the treaty. The decision will be a guideline in the future, and the effectiveness will be determined by how committed the two countries are to ensuring water collaboration rather than political rivalry.
The waters of the Indus have, as has always been the case with the Himalayas, cut through the Arabian Sea, and it is therefore a proven fact in international law that, since the 2025 plan, a significant, though a still slight, success has been enjoyed by multilateralism, which is the larger pattern worldwide; the more the danger of eruption after a century of internal recession.
Conclusion
The arbitration decision in 2025 is cited as a historic case in international treaty law and transboundary water management, and strengthens the significance of treaty commitments in the Indus Waters Treaty (IWT). It also makes it clear that in case of a political crisis, the IWT is always upheld, and causes like terrorism or changing geopolitical situations do not give any reasons to cancel treaty obligations unilaterally. The decision also exhibits a narrow understanding of Indian hydroelectric rights law, according to which such projects have to be scrutinized rigorously in the context of the provisions of Annexure D, where the rights of Pakistan to the free flow of the western rivers take precedence. Moreover, the award enhances the strengthening of the dispute resolution mechanism by emphasizing the binding character of the arbitral and Neutral Expert decisions, which boosts the predictability and stability of the law with reference to future disputes. The move has operational implications for both India and Pakistan: India must adjust the contentious hydroelectric initiatives to comply with the treaty, whereas Pakistan gains a greater legal standing as to its water rights. In the context of international law, the decision strengthens pacta sunt servanda, which is to uphold agreements, and demonstrates how a geopolitical confrontation can be solved by the use of an established system of settling disputes. From a long-term perspective, the 2025 award emphasizes that the resilience of the IWT lies not just in its textual statements but also in the interpretation and implementation structures on which it is based. With climate change and escalating water scarcity building tensions in the region, the Treaty and its interpretations by the Court will continue to play significant roles in maintaining peace, stability, and cooperative sharing of common water resources in South Asia.
References
Gabčíkovo-Nagymaros Project (Hungary/Slovakia), ICJ Reports 1997. International Court of Justice. https://www.icj-cij.org/en/case/92
Indus Waters Kishenganga Arbitration (Pakistan v. India). (2013). PCA Case No. 2011-01. Permanent Court of Arbitration. https://pcacases.com/web/view/20
Indus Waters Treaty, India & Pakistan. (1960). UN Treaty Series, Volume 419, I-6032. https://treaties.un.org/doc/Publication/UNTs/Volume%20419/volume-419-I-6032-English.pdf
Permanent Court of Arbitration. (2025). PCA Case No. 2023-01: Supplemental Award on the Competence of the Court. https://pcacases.com/web/sendAttach/75789
Permanent Court of Arbitration. (2025). Supplemental Award on Competence: Indus Waters Western Rivers Arbitration. https://pcacases.com/web/sendAttach/76022
Vienna Convention on the Law of Treaties. (1969). United Nations Treaty Series, Volume 1155, I-18232.
World Bank. (2025). Fact Sheet: The Indus Waters Treaty 1960 and the Role of the World Bank. https://www.worldbank.org/en/region/sar/brief/fact-sheet-the-indus-waters-treaty-1960-and-the-world-bank
