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Folder Title: India - Pakistan - Indus Waters Treaties - Court of Arbitration - Correspondence 01

Folder ID: 1787797

Dates: 3/1/1960 - 10/1/1960

Fonds: Records of the South Asia Regional Office (WB IBRD/IDA SAR)

Digitized: August 06, 2014

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1787797A1995-165 other#: 17 182305B

India - Pakistan - Indus Waters Treaties - Court of Arbitration - Corres

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INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

FOREXECUTIVE DECLASSIkii)DIRECTORS' CONFIDENTIALMEETING ,

R 60-48(For consideration onApril 26, 1960)

FROM: The Acting Secretary April 25, 1960

PROPOSED WAN - PAKISTAN

SUPPLEMENTAL PRESIDENT 'S REPORT AND RECCiMENDATIONS

1. The provisions of the Indus aters Treaty now under discussion betweenIndia and Pakistan, with the good offices of the Bank, have not yet been finallyagreed. It is not therefore possible at this point of time to submit a text ofthe proposed Treaty to the Executive Directors.

2. Certain functions and responsibilities are proposed for the Bank, or forthe President of the Bank, under the provisions of the Treaty now under discuss-ion. These are :-

(a) The Treaty payment by India referred to in Paragraph 11 of thePresident's report (P-220) is to be paid to the Bank for the creditof the Indus Basin Development Fund "to be established and admin-istered by the Bank"; and the Bank undertakes to pay to India outof the Indus Basin Development Fund the appropriate amount payableto India in the event that Pakistan should ask for an extension ofthe Transition Period. The specific role of the Bank in regardto the Indus Basin Development Fund is, however, set out in detailin the Indus Basin Development Fund Agreement of which the text hasalready been circulated to the Executive Directors.

(b) If certain emergency situations (to be specified in the Treaty) shouldarise, and if the existence of these emergency situations should bebrought to the notice of the Bank by Pakistan, and if, after con-sultation with India, the Bank should be of the opinion that Pakistan,because of the emergency, cannot construct the "replacement works"within the Transition Period specified in the Treaty, then the Bankundertakes to notify both Parties to that effect. Having been sonotified, both Parties undertake to consult together, and to enlist

Distribution

Executive Directors and AlternatesPresidentVice PresidentsDepartment Heads

-2 .

the good offices of the Bank in their consultation, with a view toreaching mutual agreement as to whether or not any modifications of theprovisions of the Treaty are appropriate and advisable, and, if so, thenature and extent of the modifications.

(c) There would be provision in the Treaty for the settlement by a "NeutralExpert" of certain technical differences (which would be specified inthe Treaty) that might arise between the Parties. The Neutral Expertwould be a "highly qualified engineer". The Treaty would provide that,in certain circumstances, the appointment of this Neutral Expert would bemade by the Bank.

(d) The Treaty would require each of the Parties to maintain on deposit withthe Bank the sum of U.S. $5,000 to be held in trust by the Bank, and outof which would be paid the expenses of any Neutral Expert from time totime appointed.

(e) The Treaty would make provision f6r the establishment of a Court ofArbitration to settle disputes which are outside the competence of theNeutral Expert. The Treaty would provide that, in certain circum-stances, the President of the Bank should nominate the Chairman ofthe Court and should nominate some person to draw lots to fill vacanciesin the composition of the Court of Arbitration.

(f) It is proposed that the Treaty document should be signed on behalf ofthe Bank, in token of the Bank's agreement to undertake the functionsand responsibilities specified in (a), (b), (c), (d) and (e) above.

3. As soon as a definitive text of a Treaty has been agreed between India andPakistan, copies of the text will be supplied to the Executive Directors with arecommendation by the President that the Executive Directors should adopt aResolution (of which the text would be submitted) authorising the Bank (and thePresident of the Bank) to assume the functions and responsibilities specified inthe Treaty with respect to the matters set out in Paragraph 2 above.

AprjJ 1 1'6

Dear Secretary-Ceneral-

E wrlte t ack owledge and tIhank you for yourlotter of Marc' 2) 1 0 in which you were kind enouI toaccept the responsib 1 ty of appolnt'ng an arbitrator in ec rcumrstances contemplateed by Article X of t-!e Tnduvs 'as4n

Development Fund Agreement.

I am informing the participating Governmentsaccordingly.

Yours sincerely,

W.A.B. IliffVice President

Mr. Dag HammarskjoldSecretary-GeneralUnited NationsNew York, N.Y.

WABIliff/jj

UI2D NAT

MSW TRK

29 March 1960

bear Mr. Ilif f,

I an pleased to acknowledge the receipt of your letter of24 March 1960 with wLich you enclosed two copies of theinternational Agreement for the gstablisheent of the Indus BasiDevelopmeat Fumd, to be entered into by the Governments of Australia,Canada, the Federal Republic of Germany, New Zealand, Pakistan, theUnited Kingdom and the United States, and by the International lank.

Article X of this Agreement, to which you have drwn myattention, provides for arbitration in the event that the parties cannotsettle a dispute among theselves by agreement. If the parties shouldbe unable to select an arbitrator, it is proposed that the arbitrator beappointed by the Secretary-General of the United Nations.

You way inform the participating Govertments that theproposed provision for the possible appointment of an arbitrator bythe Secretary-General is fully acceptable to me.

I wish to take this opportunity to extend to you my coa-gratulations an your part in achieving settlement of the Indus Watersquestion.

Sincerely yours,

/a/ Dag NamerskjoldDag EommarskjoldSearstary-General

Mr. W.A.S. IliffVice PresidentInternational Bank forReconstruction and DevelopmentWashington 25, D.C.

Yarch 24, 1960

Dear asecretary-General:

As part of a settlmc.nt of the indus Waters question and by way of' makingprovision for contributions from various Friendly Governznnts to natc theconstruction costs of a. systen of works in Pakistan, it is proposed that anIndus Bazin Development Fund should be establin'cd by an international Agrcmcntto be enterod into by the Goveraments of Australia, Canada, Germany, INew Zealand,Pakistan, the United Kingdom and the United &tates, and by the Bank.

I enclose two copies of this Agreement of which the terms have now beenagreed with the various participating Governments. It is contemplated thatthe Agreenent would be signed simultaneously with the signature of the WaterTreaty between India and Pakistan which we hope would happen early in May.

You will notice that there is a provision in Articls X of the Agreensntf'or the settlcneat of disputes betwcen any of the Parties to the Agrementand it has been th ht dosirable to make provision for the appoint- i of anarbitrator in the event that the Parties are unable to settle a dispute bya-grosaent anong the Parties themselves. If' the Parties should further beunable to agree aan themselves for the selection of an arbitrator, it iSproposed that the arbitrator, failing such selection, should be appointedby the Secretary-Cenoral of the United Nations.

I have been asked by the participating Governments to approach you withthe request that you right act in the capacity proposed for you in Article Iand I hope that you will be able to agree.

With kind regards

I am,

Yours sincerely,

V1.A.B. Ilf

U. A. B. IliffVice President

Encls.

Mr. Dag EamrrarskjoldOecretary-GCneralUnited hationsNew York, N.Y.

WAB Iliff/eb

..

August 1, 1960

Dear Harrys

When I was in London last week, I meationed to C.R.O. that we wouldwish to move the Lord Chief Justice of England to accept the role whichis cast for him under Annexure G of the Indus Voters Treaty and also toraise with the Rector of the Imperial College of Science and Technologythe question that he might be prepared to act in the role assigned tohim.

I enclose three sets of the following papers-

(a) A Bank Memorandum explaining the proposed roles of theLord Chief Justice and of the Rector;

(b) A copy of the latest draft of the text of the IndusWaters Treaty; and

(c) A copy of Annexure 0 which deals with the compositionprocedure of the Court of Arbitratim.

I think these docvmts are self-ezplantory and I shall be grtefulif you mould ask C.R.O. to take whatever steps may be necessay to obtainthe consent of the Lord Chief Justieo and of the Retor to undertake thefunctions proposed for them.

Yours ever,

W. A. B. IliffVice President

Encl.

Mr. H.S.H. StanleyBritish @xbessyWashington, D.C.

WAB Iliff/eb

August 1, 1960

Dear Secretary-General,

You will remember that I wrote to you on March 24 asking you toundertake a certain responsibility of appointing an arbitrator underArticle X of the Indus Basin Development Fund Agreement. This youkindly undertook to do.

A proposal has now been made by the Government of India and theGovernment of Pakistan that yet another duty should be placed uponyour shoulders, arising out of the provisions of the proposed InduWaters Treaty itself. This, I think, is adequately explained in theattached Memorandum and I hope that you will find it possible to agree.

With kind regards,

Yours sincerely,

W.A.B. lIiff

W. A. B. Iliff

Attachment

Mr. Dag HamsarskjoldSecretary-GeneralUnited NationsNew York, N.Y.

wAB niff/eb

August 1, 1960

?9' dear Cief Justicet

An you probably knm,, the Bank has been working for seme years tobring about an international treaty between India and Pakistan to resolvethe long outstanding dispute between the two countries about the use ofthe waters of the Indus system of rivers. We are now, I believe, withinsight of a successful conclusion of thea" negotiations.

As is explained in the attached docmunts, the Treaty will providefor the establishment of a Court of Arbitration to resolve any differencesthat may arise with regard to the interpretation or implementation of theprovisions of the Treaty. In certain cirmeatances, the appointment ofthe "Neutral Members" of the Court of Arbitration may have to be left toselection by a third party and both Governments are very desirous that inthe case of the Legal Kember the selection should be ade either by theChief Justice of the Supreme Court of the United States or by the LordChief Justice of England, the choice between the two as selector beingdetermined by lot.

I shall be most grateful to you if you can undertake to accept therole that is being proposed for you. We are planning on the signatureof the Treaty by not later than mid-September and I shall be glad to havea reply from you as early as may be convenient to you.

,ith kind regards and heat wishes,

I am,

3incerely yours,

Eugene R. Black

Attachment

The Hon. arl WarrenChief JusticeSupram Court of the United StatesWashington, D.C.

WAB Iliff/eb

Augist 1, 1960

Dear Mr. President,

As you probably know, the Bank has been working for some years tobring about an international treaty betwn-India and Pakistan to resolvethe long outstanding dispute between the two rountries about tho use ofthe waters of the Indus system of rivers. We are now, I believe, withinsight of a successful conclusion or these negotiations.

As in explained in the attached documents, the Treaty will providefor the establishment of a Court of Arbitration to resolve any differencesthat may arise with rerard to the interpretation or implementation of theprovisions of the Treaty. In oertain circumstances, the appointment ofthe 'Neutral Members* of the Court of Arbitration may have to be left toselection by a third party and both Governments are very desirous that inthe case of the Egineering Member the, selection should be made either bythe President of the Massachusetts Institute of Technology, Cambridge,Massachusetts, U.S.A., or by the Rector of the Imperial College of Scienceand Technology, London, England, the choice between the two as selectorbeing dOterained by lot.

I shall be most grateful to you if you can undertake to accept therole that is being proposed for you. We are planning on the signatureof the Treaty by not later than aid-September and I shall be glad to havea reply from you as early as may be convenient to you.

With kin reogrds and best wishes,

I am,

Sincerely yours,

eugne R. Black

Attaahment

Mr. Julius A. StrattonPresidentWaachusetts Institut of

TeachnologyCambridge, Mass.

WAB Iliff/eb

FORM No. 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5-48)

OFFICE MEMORANDUMTO: Files DATE: August 4. 1960

FROM: W.A.B, Iliff

SUBJECT: Indus Waters Treaty - Annexure G

Steps have now been taken to obtain the consent of all thepersons mentioned in the Appendix to Annexure G to accept therole cast for them in Paragraph 7(b) of Annexure G.

The acceptance of this role by the President of theInternational Bank ill be one additional matter requiring theconsent of the Executive Directors in addition to the pointsset out in Paragraph 2 of Menorandum No. R 60-48 datedApril 25, 1960.

c.o. Mr. GoodmanMr. Ellsworth Clark

$upremw ("rt of *jye titct Atatro

CHAMBERS OFTHE CHIEF JUSTICE August 4, 1960

Honorable Eugene R. Black,President,International Bank for Reconstruction

and Development,Washington 25, D. C.

My dear President Black:

In the Chief Justice's absene,/4ay I acknowledgeand thank you for your letter of August 1st. I will be gladto call it to his attention at the first opportunity. Howewr,at the present time, he is traveling in California, and theremay be a little delay in reaching him.

Respectfully yours,

Excutive Secretaryto the Chief Justice.

August 18th.

I telephoned Mrs. McHugh and she said she had not been able toget in touch with the Chief Justice. He is expected to return toWashington next week. She said she thought we might get a negativeanswer.

W.A.B.I.

August 30

Mrs. McHugh telephoned to say that the Chief Justice had said "yes".

UNITED NATIONS NATIONS UNIES

NEW YORK

GA.LE ADDREBM - UNATIONS NEWYORK - ADREUSE TELEGRAPHIQUE

"ILE NO.; 1-1 Augu~st 1960

Dear Mr. Iliff,

In the abse of the Secretary-General I wish to reply toyour letter of 1 ust 1960 relating to the proposed IndusWvaters Treaty which is presently under negotiation between Indiaand Pakistan. A copy of the draft text, as so far agreed, ofthe Treaty and of Annexure G to the Treaty have been enclosedwith your letter.

A memorandum attached to your letter draws attention toArticle IX of the draft Treaty which relates to the settlement ofdisputes between the parties and to paragraph 7 of Annexure G whichrelates to appointments to be made of members of a court ofarbitration. This paragraph provides in particular that in theevent that the two parties should fail to reach agreement on theindividual to serve on the court of arbitration as Chairman, aselection would be made either by the Secretary-General of theUnited Nations or by the President of the International Bank,the choice between the two selectors being determined by thedrawing of lots.

I am authorized by the Secretary-General to state that thisproposed provision for the possible appointment by him of a Chairmanof the Court of Arbitration is acceptable to him and that you mayinform the Governments concerned to this effect.

Yours sincerely,

Andrew W. CordierExecutive Assistant to theSecretary-General

Mr. W.A.B. IliffVice PresidentInternational Bank forReconstruction and DevelopmentWashington 25, D.C.

- RECEIVED

OG 17 an 5

OFFICE OF THE PRESIDENT CAMBRIDGE 39, MASSACHUSETTS

August 12, 1960

Mr. Eugene R. Black, PresidentInternational Bank for Reconstruction and DevelopmentWashington 25, D. C.

Dear Mr. Black:

Upon my return to Cambrid~e' after an absence of several weeks,I found your letter of August 1 relating to the proposed treatybetween India and Pakistan.

I understand,under circumstances described on Page 7 ofAnnexure G of the Indus Waters Treaty, I may be called upon todesignate the Engineering Member of a Court of Arbitration. AlthoughI can foresee possible ccmplications and difficulties arising inconnection with this duty, I feel it is a public responsibility thatI ought to accept. Accordingly, I am prepared to take the proposedrole if it falls to my lot to do so.

With kinde st wishe s,

Sincerely yours,

J. A. Strattonent

JAS:LHM

August 18, O60

Dear wr. Oordlar,

I witea t q*vnowledge and to theak you for yowrletter of 1t'August in Mcid h you intbMed as thatyou an authorised by tha SecretaOry-Pseral to statethat the proposed provision In the Indus Waters Treatyfr the possible appointment by MIa of a Chairman of

the Court of Axtitration inseaptable, to theseaetery-Gneral and that I aq infar the Govmmtsooeawd to that *ff*t.

I an most grateful tat tAh Sw0tey7-in0svI hsfound it possible to acsct.

W.A.B. lIiffWe A* 1 11ff

vise fresidint

Wr. A.W. Coldlarbxective Assisteat

to the Saetaro.enralUnited NataaowNow York

Aost 18, 1960

Dez i. fresidmnt,

In Mr. lacks absno, I on writing toacknowledge 'to thank you for your letterof Agust 12./ am most gatoful that youhave found it possible to accept the funtionproposed for you with regard to the appointmtof the lhgimering Member of the Court ofArbitration that mqy, in ertain oirouvstanoes,be set up under the provisions of the proposedIndus Wtors Traty.

Towrs dmowoersy

W.A.B. ifw. A. . IliffVie Prosidw*t

Mr. J.A. Stratta

m"G-amtta instituteof Tgehlaogy

Cambridge 29, Nam.

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ILIFF VICE PRESIDENT INTERNATIONAL BANK INTBAFRAD

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I AM HAPPY TO AUTHORISE YOU TO INCLUDE RECTOR OF THE

IMPERIAL COLLEGE IN THE APPROPRIATE PLACE IN THE

TEXT OF THE INDUS TREATY

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Vasltingtan ZA, 3D. (.CHAMBERS OF

THE CHIEF JUSTICE September 8, 1960

Honorable Eugene R. Black,President,International Bank for Reconstruction

and Development,Washington Z5, D. C.

My dear President Black:

This is to confirm the telephone conversation between mysecretary and Mr. William Iliff to the effect that I am willing to beone of the selectors of the legal member for the Court of Arbitra-tion to be established under the proposed international treaty betweenIndia and Pakistan concerning the waters of the Indus system of rivers,provided it is the desire of the parties to the treaty and our State De-partment.

I assume it is implicit in my acceptance that if it should fallto my lot to appoint a lawyer or a judge for the Court of ArbitrationI would limit myself to consideration of Americans. Otherwise, Iwould have no competence because I do not have a sufficient acquaint-ance with the bench and bar of other countries to enable me to makea considered choice.

I will be happy to be of any assistance within my means.

With kind regards, I am

Sincerely,

September 131, 1960

ay dear 0r. Cief Justices

Ar. B1ack is likely to be absent from the Bank for the next fewweeks. Ae is in Minnesota convalescing from a recent operation but,I am glad to say, makifg good progress,

In his absence, I write to aaknowledge and thank you for yourletter of September 8 In which you inform Mr. Slack that you arewill1inw to be one of the selectors for the legal member of the Courtof Arbitration to be established ider the Indus Waters Treaty 1960.

ihe request that you should act in this capaoity Caoespontaneously from the two Governments who are parties to the Treatyand the Jnitad States State Department. is happy to learn that yvahave felt able to accept.

It is, of course, undrstood that, if it sheuld fall to your lotto appoint a legal member to the CWurt of Arbitration, "u ould feeloblied, for the reasons that you muntion, to limit yrself tocssideration of United states nationals, This is quite aseeptableto the parties to the Treaty.

With kind regards, I am

orte sincarely,

W.A.B. Iliff

W. A, 0. lmffVice President

The don. arl arranChief JusticeSupreme ourt of the United StatesWashington, LI.C.

Annexure G

The

Indus Waters Treaty 1960

ANNEXURE G

COURT OF ARBITRATION

(Article IX(5))

(Draft Dated 6th June, 1960)

1

1 ANNEXURE G-COURT OF ARBITRATION

2 (ARTICLE IX(5))

3 1. If the necessity arises to establish a Court of Arbi-4 tration under the provisions of Article IX, the provisions5 of this Annexure shall apply.

6 2. The arbitration proceeding may be instituted

7 (a) by the two Parties entering into a special agreement8 (compromis) specifying the issues in dispute, the9 composition of the Court and instructions to the

10 Court concerning its procedures and any other mat-11 ters agreed between the Parties; or

12 (b) at the request of either Party to the other in accord-13 ance with the provisions of Article IX(5). Such14 request shall contain a statenient setting forth the15 nature of the dispute or claim to be submitted to16 arbitration, the nature of the relief sought and the17 names of the arbitrators appointed under Para-18 graph 6 by the Party instituting the proceeding.

19 3. The date of the special agreement referred to in20 Paragraph 2(a), or the date on which the request referred21 to in Paragraph 2(b) of this Annexure is received by the22 other Party, shall be deemed to be the date on which the23 proceeding is instituted.

24 4. Unless otherwise agreed between the Parties, a Court25 of Arbitration shall consist of seven arbitrators appointed26 as follows:-

27 (a) Two arbitrators to be appointed by each Party in28 accordance with Paragraph 6; and

29 (b) Three arbitrators (hereinafter sometimes called the

2

1 umpires) to be appointed in accordance with Para-2 graph 7, one from each of the following categories:

3 (i) Persons qualified by status and reputation4 to be Chairman of the Court of Arbitration5 who may, but need not, be engineers or6 lawyers.7 (ii) Highly qualified engineers.8 (iii) Persons well versed in international law.

9 The Chairman of the Court shall be a person from cate-10 gory (i) above.

11 5. The Parties shall endeavour to nominate and main-12 tain a Standing Panel of umpires (hereinafter called the13 Panel) in the following manner:-

14 (a) The Panel shall consist of four persons in each of15 the three categories specified in Paragraph 4(b).

16 (b) The Panel will be selected, as soon as possible after17 the Effective Date, by agreement between the Parties18 and with the consent of the persons whose names are19 included in the Panel.

20 (c) A person may at any time be retired from the Panel21 at the request of either Party: Provided, however,22 that he may not be so retired

23 (i) during the period after arbitration proceed-24 ings have been instituted under Paragraph25 2(b) and before the process described in26 Paragraph 7(a) has been completed; or

27 (ii) during the period after he has been appointed28 to a Court and before the proceedings are29 completed.

30 (d) If a member of the Panel should die, resign or be31 retired, his successor shall be selected by agreement32 between the Parties.

3

1 6. The arbitrators referred to in Paragraph 4(a) shall2 be appointed as follows:-

3 The Party instituting the proceeding shall appoint4 two arbitrators at the time it makes a request to the5 other Party under Paragraph 2(b). 'Within 30 days6 of the receipt of this request, the other Party shall7 notify the names of the arbitrators appointed by it.

8 7. The umpires shall be appointed as follows:-

9 (a) If a Panel has been nominated in accordance with10 the provisions of Paragraph 5, each umpire shall11 be selected as follows from the Panel, from his12 appropriate category, provided that the category13 has, at that time, at least three names on the Panel:-

14 The Parties shall endeavour to agree to place the15 names of the persons in each category in the order16 in which they shall be invited to serve on the17 Court. If such agreement cannot be reached within18 30 days of the date on which the proceeding is19 instituted, the Parties shall promptly establish20 such an order by drawing lots. If, in any category,21 the person whose name is placed first in the order22 so established, on receipt of an invitation to serve23 on the Court, declines to do so, the person whose24 name is next on the list shall be invited. The25 process shall be repeated until the invitation is26 accepted or all names in the category are27 exhausted.

28 (b) If a Panel has not been nominated in accordance29 with Paragraph 5, or if there should be less than30 three names on the Panel in any category or if no31 person in a category accepts the invitation referred32 to in Paragraph 7(a), the umpires, or the remaining33 umpires or umpire, as the case may be, shall be34 appointed as follows:-

35 (i) By agreement between the Parties.

4

1 (ii) Should the Parties be unable to agree on2 the selection of any or all of the three um-3 pires, they shall agree on one or more per-4 sons to help them in making the necessary5 selection by agreement; but if one or more6 umpires remain to be appointed 60 days after7 the date on which the proceeding is insti-8 tuted, or 30 days after the completion of the9 process described in sub-paragraph (a)

10 above, as the case may be, then the Parties11 shall determine by lot for each umpire12 remaining to be appointed, a person from13 the appropriate list set out in the Appendix14 to this Annexure, who shall then be requested15 to make the necessary selection.

16 (iii) A national of India or Pakistan, or a person17 who is, or has been, employed or retained by18 either of the Parties shall be disqualified19 from selection under sub-paragraph (ii)20 above:

21 Provided that:22 (1) the person making the selection shall be23 entitled to rely on a declaration from24 the appointee, before his selection, that25 he is not disqualified on any of the above26 grounds; and27 (2) the Parties may by agreement waive any28 or all of the above disqualifications in29 the case of any individual appointee.

30 (iv) The lists in the Appendix to this Annexure31 may, from time to time, be modified or en-32 larged by agreement between the Parties.

33 8. In selecting umpires pursuant to Paragraph 7, the34 Chairman shall be selected first, unless the Parties other-35 wise agree.

5

1 9. Should either Party fail to participate in the drawing2 of lots as provided in Paragraphs 7 and 10, the other Party3 may request the President of the Bank to nominate a per-4 son to draw the lots, and the person so nominated shall do5 so after giving due notice to the Parties and inviting them6 to be represented at the drawing of the lots.

7 10. In the case of death, retirement or disability from8 any cause of one of the arbitrators or umpires his place9 shall be filled as follows:-

10 (a) In the case of one of the arbitrators appointed under11 Paragraph 6, his place shall be filled by the Party12 which appointed him. The Court shall, on request,13 suspend the proceedings but for not longer than 1514 days pending such replacement.

15 (b) In the case of an umpire, a new appointment shall16 be made by agreement between the Parties or, fail-17 ing such agreement, by a person determined by lot18 from the appropriate list set out in the Appendix19 to this Annexure, who shall then be requested to20 make the necessary selection subject to the provi-21 sions of Paragraph 7(b) (iii). Unless the Parties22 otherwise agree, the Court shall suspend the pro-23 ceedings pending such replacement.

24 11. As soon as the three umpires have accepted appoint-25 ment, they together with such arbitrators as have been26 appointed by the two Parties under Paragraph 6 shall form27 the Court of Arbitration. Unless the Parties otherwise28 agree, the Court shall be competent to transact business29 only when all the three umpires and at least two arbi-30 trators are present.

31 12. Each Party shall be represented before the Court by32 an Agent and may have the assistance of Counsel.

33 13. Within 15 days of the date of institution of a pro-34 ceeding, each Party shall place sufficient funds at the dis-35 posal of its Commissioner to meet in equal shares the

6

1 initial expenses of the umpires to enable them to attend the2 first meeting of the Court. If either Party should fail to3 do so, the other Party may initially meet the whole of4 such expenses.

5 14. The Court of Arbitration shall convene, for its first6 meeting, on such date and at such place as shall be fixed7 by the Chairman.

8 15. At its first meeting the Court shall

9 (a) establish its secretariat and appoint a Treasurer;

10 (b) make an estimate of the likely expenses of the Court11 and call upon each Party to pay to the Treasurer12 half of the expenses so estimated: Provided that,13 if either Party should fail to make such payment,14 the other Party may initially pay the whole of the15 estimated expenses;

16 (c) specify the issues in dispute;

17 (d) lay down a programme for submission by each side18 of legal pleadings and rejoinders; and

19 (e) determine the time and place of reconvening the20 Court.

21 Unless special circumstances arise, the Court shall not22 reconvene until the pleadings and rejoinders have been23 closed. During the intervening period, at the request of24 either Party, the Chairman of the Court may, for sufficient25 reason, make changes in the arrangements made under26 (d) and (e) above.

27 16. Subject to the provisions of this Treaty and except28 as the Parties may otherwise agree, the Court shall decide29 all questions relating to its competence and shall determine30 its procedure, including the time within which each Party31 must present and conclude its arguments. All such decisions

7

1 of the Court shall be by a majority of those present2 and voting. Each arbitrator, including the Chairman, shall3 have one vote. In the event of an equality of votes, the4 Chairman shall have a casting vote.

5 17. The proceedings of the Court shall be in English.

6 18. Two or more certified copies of every document pro-7 duced before the Court by one Party shall be communicated8 by the Court to the other Party; the Court shall not take9 cognizance of any document or paper or fact presented by

10 a Party unless so communicated.

11 19. The Chairman of the Court shall control the dis-12 cussions. The discussions shall not be open to the public13 unless it is so decided by the Court with the consent of the14 Parties. The discussions shall be recorded in minutes drawn15 up by the Secretaries appointed by the Chairman. These16 minutes shall be signed by the Chairman and shall alone17 have an authentic character.

18 20. The Court shall have the right to require from the19 Agents of the Parties the production of all papers and20 other evidence it considers necessary and to demand all21 necessary explanations. In case of refusal, the Court shall22 take formal note of it.

23 21. The members of the Court shall be entitled to put24 questions to the Agents and Counsel of the Parties and25 to demand explanations from them on doubtful points.26 Neither the questions put nor the remarks made by the27 members of the Court during the discussions shall be re-28 garded as an expression of an opinion of the Court or29 any of its members.

30 22. When the Agents and Counsel of the Parties have,31 within the time allotted by the Court, submitted all ex-32 planations and evidence in support of their case, the Court

8

1 shall pronounce the discussions closed. The Court may,2 however, at its discretion re-open the discussions at any3 time before making its Award. The deliberations of the4 Court shall be in private and shall remain secret.

5 23. The Court shall render its Award, in writing, on the6 issues in dispute and on such relief, including financial7 compensation, as may have been claimed. The Award shall8 be accompanied by a statement of reasons. An Award9 signed by four or more members of the Court shall consti-

10 tute the Award of the Court. A signed counterpart of the11 Award shall be delivered by the Court to each Party. Any12 such Award rendered in accordance with the provisions of13 this Annexure shall be final and binding upon the Parties14 with respect to that particular dispute.

15 24. The salaries and allowances of the arbitrators16 appointed pursuant to Paragraph 6 shall be determined17 and, in the first instance, borne by their Governments;18 those of the umpires shall be agreed upon with them by19 the Parties or by the persons appointing them, and (sub-20 ject to Paragraph 13) shall be paid, in the first instance,21 by the Treasurer. The salaries and allowances of the secre-22 tariat of the Court shall be determined by the Court and23 paid, in the first instance, by the Treasurer.

24 25. Each Government agrees to accord to the members25 and officials of the Court of Arbitration and to the Agents26 and Counsel appearing before the Court the same privi-27 leges and immunities as are accorded to representatives28 of member states to the principal and subsidiary organs29 of the United Nations under Sections 11, 12 and 13 of30 Article IV of the Convention on the Privileges and Immu-31 nities of the United Nations (dated 13th February 1946)32 during the periods specified in these Sections. The Chair-33 man of the Court, with the approval of the Court, has the

9

1 right and the duty to waive the immunity of any official2 of the Court in any case where the immunity would im-3 pede the course of justice and can be waived without4 prejudice to the interests of the Court. The Government5 appointing any of the aforementioned Agents and Counsel6 has the right and the duty to waive the imumunity of any7 of its said appointees in any case where in its opinion the8 immunity would impede the course of justice and can be9 waived without prejudice to the effective performance of

10 the functions of the said appointees. The immunities and11 privileges provided for in this Paragraph shall not be12 applicable as between an Agent or Counsel appearing be-13 fore the Court and the Government which has appointed14 him.

15 26. In its Award, the Court shall also award the costs16 of the proceedings, including those initially borne by the17 Parties and those paid by the Treasurer.

18 27. At the request of either Party, made within three19 months of the date of the Award, the Court shall re-20 assemble to clarify or interpret its Award. Pending such21 clarification or interpretation the Court may, at the request22 of either Party and if in the opinion of the Court circum-23 stances so require, grant a stay of execution of its Award.24 After furnishing this clarification or interpretation, or if25 no request for such clarification or interpretation is made26 within three months of the date of the Award, the Court27 shall be deemed to have been dissolved.

28 28. Either Party may request the Court at its first meet-29 ing to lay down, pending its Award, such interim measures30 as, in the opinion of that Party, are necessary to safe-31 guard its interests under the Treaty with respect to the32 matter in dispute, or to avoid prejudice to the final solu-33 tion or aggravation or extension of the dispute. The Court

10

1 shall, thereupon, after having afforded an adequate hear-2 ing to each Party, decide, by a majority consisting of at3 least four members of the Court, whether any interim4 measures are necessary for the reasons hereinbefore stated5 and, if so, shall specify such measures: Provided that:-

6 (a) the Court shall lay down such interim measures7 only for such specified period as, in its opinion, will8 be necessary to render the Award: this period may,9 if necessary, be extended unless the delay in render-

10 ing a decision is due to any delay on the part of the11 Party which requested the interim measures in sup-12 plying such information as may be required by the13 other Party or by the Court in connection with the14 dispute; and

15 (b) the specification of such interim measures shall not16 be construed as an indication of any view of the17 Court on the merits of the dispute.

18 29. Except as the Parties may otherwise agree, the law19 to be applied by the Court shall be this Treaty and, when-20 ever necessary for its interpretation or application, but21 only to the extent necessary for that purpose, the follow-22 ing in the order in which they are listed:-

23 (a) International conventions establishing rules which24 are expressly recognized by the Parties.

25 (b) Customary international law.

11

1 APPENDIX TO ANNEXURE G

2 (Paragraph 7(b))

3 Iist I List II List III4 for selection of for selection of for selection of5 Chairman Engineer Member Legal Member

6 (i) The Secretary- (i) The President of (i) The Chief7 General of the Massachusetts Justice of the8 United Nations Institute of Supreme Court9 Technology, of the United

10 Cambridge, States11 Mass., U.S.A.

12 (ii) The President of (ii) The Rector of (ii) The Lord Chief13 the International the Imperial Justice of14 Bank for Recon- College of England15 struction and Science and16 Development Technology,17 London, England

[NOTE: The consent of the persons named in the above lists is beingsought, but has not yet been obtained.]