The Varsho River Dispute

1. The Varsho River runs approximately 850 kilometers from its source in the highlands of the Harahkaray Free State ("Harahkaray”) until it reaches the Dinghun Sea. Along its route, the Varsho forms a sizeable freshwater lake – Lake Kilgus – before resuming its seaward course. From its source until it reaches Lake Kilgus, the river is referred to as the Upper Varsho. From Lake Kilgus to the Dinghun Sea, it is referred to as the Lower Varsho. There are three small islands located in Lake Kilgus: Veres Island, Ryne’s Landing and the Kilgus Strip. The Kilgus Strip emerged as an island only in 2010, following a significant earthquake (see below). Historically, Veres Island and Ryne’s Landing have been populated by an ethnic minority – the Witsocki.

2. From the point at which the Varsho leaves the territory of Harahkaray, the river and Lake Kilgus form a natural boundary between two States that lie to the south of Harahkaray: the Kingdom of Battenland ("Battenland”) and the Republic of Alamaguay ("Alamaguay”). The geography of the region is set forth in the attached map.

3. During the nineteenth and early twentieth century, the status of Lake Kilgus, Veres Island and Ryne’s Landing was a source of tension in relations between Battenland and Alamaguay. In 1925, Battenland and Alamaguay negotiated a bilateral agreement to settle the boundary between the two States and to resolve certain issues relating to Lake Kilgus (the "1925 Agreement”). The 1925 Agreement included the following provisions: 
Article 1. The course of the Varsho River shall constitute the permanent and inviolable boundary between the Royal Kingdom of Battenland and the Republic of Alamaguay, from the place where the Varsho leaves the Harahkaraiac territory to where it enters the Sea of Dinghun.
Article 2. Battenland shall possess henceforth in complete sovereignty the country, lands and domains situated on the right bank of the Varsho, and Alamaguay shall possess henceforth in complete sovereignty the country, lands and domains on its left bank, both as the Varsho lies north and south of the Great Lake Kilgus.
Article 3. The thalweg of the Varsho shall be the limit between the sovereign domains of Battenland and Alamaguay at each place where the Varsho lies.
Article 4. Within the Great Lake Kilgus, the boundary shall follow a straight line from the point at which the waters of the Varsho enter the Lake to the point at which the waters of the Lake enter into the lower Varsho.
Article 5. The islands to be found within the Great Lake Kilgus shall be henceforth recognized as the sovereign territory of Alamaguay, in accordance with the boundary established herein and historic practice.
Article 6. Within their respective sovereign domains, Battenland and Alamaguay agree to respect the peaceful use of the waters of the Varsho and the Great Lake Kilgus for commerce and transportation where such use is reasonable and not to the serious detriment of the other State. In the event of any differences concerning the interpretation or application of this provision, the contracting States agree to undertake negotiations in good faith.
The Agreement was ratified within weeks of its negotiation and entered into force on 1 December 1925.
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4. Battenland is a constitutional monarchy and has been governed by an elected parliament and prime minister since the early nineteenth century. It has been a member of the United Nations since its founding in 1945. The current Prime Minister of Battenland is Ms. Ailish Marvell, who heads a governing coalition made up of three political parties. The capital of Battenland is the city of Dunston, which is located at the mouth of the Varsho River.
5. The political history of Alamaguay reflects a tumultuous past. The country has alternated between civilian rule and military dictatorship for most of the past 100 years. From 1919 until 1943, Alamaguay operated as a "one-party democracy”. That government collapsed during the Second World War, after which Alamaguay was ruled for 25 years by a military junta. Following a popular uprising in 1968, civilian rule was restored and a constitution was enacted, but a coup in 1979 returned power to the military. In 1994, a new constitution was adopted and multi-party elections were held for the first time. President Maddox Maksudian was elected then and has since been twice re-elected. He is currently serving his third seven-year term. The capital of Alamaguay is the city of Linna Lubadus. It is located inland, approximately 300 kilometers east of Lake Kilgus.
6. Battenland industrialized during the nineteenth century and today has a sophisticated economy that includes prominent companies in the high-tech and pharmaceutical sectors. During the 1960s, hydrocarbon resources were discovered in the seabed beneath the waters adjacent to Battenland’s southwestern coast. Battenland has continuously exploited these resources since that time and is a net exporter of oil and natural gas. As of 2010, Battenland supplied Alamaguay – which historically has lacked domestic energy sources – with nearly 60 percent of its energy needs.
7. In contrast to Battenland, Alamaguay remains a substantially agrarian economy. Political instability over the past 100 years has restrained economic growth. However, Alamaguay actively promotes international tourism in its sparsely populated eastern region, which features desert landscapes and unusual rock formations. In 1999, Alamaguay designated part of that region the Niziol Valley National Park. Niziol Valley was named a UNESCO World Heritage site in 2007. As of 2010, nearly 40 percent of visitors to Niziol Valley are from Battenland, a far higher percentage than from any country other than Alamaguay itself. In 2011, Alamaguay’s state-owned mining company – Alamagold – began to exploit recently discovered precious metal deposits in an area adjacent to Niziol Valley.
8. Battenland used the Varsho River extensively as a means of transportation during the nineteenth and early twentieth century, but has significantly reduced its use of the river for commercial transport over the last 50 years. However, Battenland uses the Varsho River for irrigation, and it extracts water from Lake Kilgus to supply drinking water to several municipalities. Battenland also actively promotes tourism in the scenic Lower Varsho and in Lake Kilgus. Several of Battenland’s wealthiest citizens enjoy lakeside villas and estates along the western shore of Lake Kilgus, an area that has recently gained worldwide recognition for its viticulture.
9. Alamaguay does not extensively use the Varsho as a source of water for irrigation, instead relying on the Asos River, a different waterway that lies further to the east. In Lake Kilgus, the local Alamaguayan (Witsocki) populations on Veres Island and Ryne’s Landing actively fish the waters of the lake, as do Alamaguayan citizens living on the shores of the lake.
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10. On 15 September 2010, a 7.1 magnitude earthquake struck Battenland, not far from the river boundary with Alamaguay. In addition to structural damage and a number of casualties in Battenland, the earthquake caused two notable geomorphological events. First, the quake shifted a significant amount of earth in the area of Lake Kilgus. As a result, a new, low-lying island (with an average height of 1.8 metres above the water level) emerged near the southwestern coast of the lake, approximately 3 km from Battenland’s shore. The new island, which is called the Kilgus Strip because of its elongated shape, measures approximately 5 square kilometres. Secondly, the earthquake resulted in a change in the course of the Lower Varsho at a point approximately 50 km south of Lake Kilgus. Where the river had formerly followed a U-shaped bend, the waterway now flows straight through. As a result, a 4 square kilometre parcel of marshland – known as Oxbow Marsh – that had previously been to the east of the river finds is now west of the river.
11. Within days of the earthquake, a small contingent of Witsocki fishermen based on Veres Island set up a camp on the Kilgus Strip and raised the Alamaguayan flag. On 20 September 2010, President Maksudian’s office issued the following press release: 
"In accordance with its rights and obligations under international law, the Republic of Alamaguay hereby declares sovereignty over the Kilgus Strip. All regulations applicable to Veres Island and Ryne’s Landing are extended by presidential decree to said island, effective immediately.”
Over the next few days, Alamaguay sent a number of officers and civil engineers from its national army to the Kilgus Strip to assist the settlers.
12. Alamaguay’s actions were immediately condemned in Battenland. Although focused on recovery efforts in Dunston and elsewhere, Battenland sent a Note Verbale dated 23 September 2010 to Alamaguay to protest the declaration of sovereignty over the Kilgus Strip. In relevant part, the Note Verbale stated the following:
"The Kingdom of Battenland hereby protests the actions of Alamaguay with respect to the new island territory, known as the "Kilgus Strip”, located in Lake Kilgus. Pursuant to Article 4 of the 1925 Agreement, the Kilgus Strip is part of the Kingdom of Battenland. Civilian and military personnel of Alamaguay are requested to leave the Kilgus Strip immediately.”
13. Press reports suggested that while the Kilgus Strip was not deemed to be of any particular strategic or economic importance to Battenland, Alamaguay’s unilateral action – during a national crisis in Battenland – had struck a nerve with both government leaders and rank-and-file citizens. In response to the public outcry, the Parliament of Battenland quickly passed a new law aimed at restricting the export of energy products to Alamaguay. The Energy Export Restriction Act ("EERA”) prohibited the export of oil or natural gas by companies registered or operating in Battenland to Alamaguay, effective 1 January 2011. Alamaguay did not immediately respond to these developments. Over the next three weeks, however, more Witsocki fishermen set up a second camp on the Kilgus Strip.
14. Through the end of October 2010, there were no further exchanges between Battenland and Alamaguay concerning the Kilgus Strip. This situation changed on 1 November 2010. At dawn and without notice, Battenland dispatched an elite military unit to the island. Battenland’s forces easily overcame the local Witsocki settlers and the small number of Alamaguayan military personnel on the island. No gunfire was exchanged.
15. Simultaneous to the landing of military personnel on the Kilgus Strip, Battenland also sent military units to Veres Island and Ryne’s Landing. At Veres Island, a fire fight involving local police, residents, and Battenland military personnel resulted in three non-fatal casualties, all Alamaguayan police. By 9 a.m., Battenland had seized control of the two islands. In addition, Battenland moved a small number of military personnel into the Oxbow Marsh, an area that had been uninhabited. By afternoon, Alamaguayan civilians and military personnel had been expelled from the Kilgus Strip, evacuated by boat.
16. Meeting later that day in an emergency session, the United Nations Security Council adopted Resolution 2227 (2010), wherein the Council:
Concerned that the actions of the Kingdom of Battenland in Lake Kilgus have created a situation of extreme tension between itself and the Republic of Alamaguay,
Noting the unusual circumstances that have given rise to the emergence of a new island situated in Lake Kilgus (the so-called "Kilgus Strip”),
Affirming the importance of the principle of territorial sovereignty and the imperative that States pursue all reasonable means to advance the peaceful settlement of disputes,
Determining that the situation in Lake Kilgus constitutes a threat to peace and security in the region,
Acting under Chapter VII of the Charter of the United Nations,
1. Demands that Battenland withdraw its military personnel from Veres Island and Ryne’s Landing immediately;
2. Directs Alamaguay and Battenland to undertake negotiations as soon as practicable to resolve the status of the Kilgus Strip;
3. Urges both States to refrain from taking any activity likely to aggravate the dispute;
4. Decides to remain actively seized of the matter.
17. A flurry of diplomatic activity followed. On 3 November 2010, Battenland’s military forces withdrew from Veres Island and Ryne’s Landing. However, Battenland maintained its presence on the Kilgus Strip and in Oxbow Marsh. On 4 November 2010, Alamaguay sent a Note Verbale to Battenland stating that the Kilgus Strip should be returned to Alamaguay and asserting that Oxbow Marsh remained part of Alamaguayan territory, notwithstanding the change in the course of the Lower Varsho. The Note proposed talks aimed at the peaceful transfer of the Kilgus Strip to Alamaguayan civilian authorities, as well as the withdrawal of Battenland military personnel from the Oxbow Marsh. Battenland did not respond to the proposal, but on 1 December 2010, Battenland’s Parliament repealed the EERA, which had not yet taken effect.
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18. On 15 March 2011, Alamaguay announced that it had discovered significant shale gas deposits in the north of the country, in an area adjacent to the Upper Varsho. In a press release issued by the Ministry for Internal Development, Alamaguay stated that its state-owned energy company – Alamapower – would develop the site by using an extraction technique known as hydraulic fracturing (commonly known as "fracking”). The press release stated that the project would make it possible for Alamaguay "to take significant strides towards energy independence in the near future. This objective has taken on renewed importance in view of the changed policies of our neighbouring country and threats to our energy security”.
19. Press reports described great enthusiasm by Alamaguayan industry groups for the new project and highlighted government claims that the project would generate thousands of new jobs and a significant uptake in government revenue. Those same reports noted that Alamaguayans living on the banks or islands of Lake Kilgus had expressed concerns that the project might have a negative impact on the quality of the lake water. A representative of the Witsocki population on Veres Island and Ryne’s Landing was quoted as saying that he hoped the government would "stop keeping us in the dark about what this might mean, besides jobs”.
20. On 1 April 2011, Battenland sent a Note Verbale to Alamaguay, which in relevant part stated as follows:
The Kingdom of Battenland acknowledges the announcement by Alamaguay regarding the proposed extraction of natural gas by Alamaguay in the area of the Upper Varsho. Battenland seeks to confirm whether an environmental impact assessment has been undertaken. If so, Battenland asks that it be immediately provided with that information and have an opportunity to comment. If no EIA has been prepared, please indicate the timeframe within which such an assessment will be produced.
Battenland reminds Alamaguay of its obligations under the 1925 Agreement between our two States. Based on the environmental problems associated with hydraulic fracturing, including the potential contamination of the water table and the waters of the Varsho River, Alamaguay cannot lawfully proceed with the project until it can demonstrate that no serious detriment would result. Pursuant to Article 6 of the Treaty, Battenland proposes negotiations as soon as possible.
21. The next day, President Maksudian responded publicly to Battenland’s note during a press conference:
"The people of Alamaguay have seen enough of the bully tactics of Prime Minister Marvell and her government. Over these past several months, we saw the lengths to which our neighbour will to go to hold us back. But we will not be held hostage by the populists across the border. We are going to do whatever it takes to make Alamaguay energy independent. Measures such as the EERA, a punitive law that was nearly imposed on us, threatened to disrupt our entire economy It would have crippled the government’s ability to provide the services that Alamaguayans everywhere depend on. There is nothing to stop our neighbours from re-enacting that law tomorrow. But the technology now exists to turn Alamaguay’s natural resources, which until now have been beyond our reach, into a valuable commodity that will benefit all of the Alamaguayan people. Given the quick trigger and sabre-rattling of Ms. Marvell and the extortionate tactics of her government, our efforts to exploit these resources must absolutely be treated as a matter of the utmost importance to our national security.
Have we done an environmental survey? Look, we would not undertake this project if we did not believe that it could be done safely. The risks are far outweighed by the benefits, there can be no question.”
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22. On 2 June 2011, Shadoku Drugs, a pharmaceutical company incorporated in Battenland, announced the discovery of a valuable new plant-life compound that had been developed out of a rare strain of algae within the area of Oxbow Marsh. According to preliminary tests, the algae-based drugs, described only as Compound D23, held great promise as a treatment for certain forms of cancer, although further tests would be required before clinical studies could be undertaken. The press release noted, however, the fragility of the waters of Lake Kilgus and stated that future development of the drug would depend on preventing Oxbow Marsh, the Varsho River and Lake Kilgus from seeing any increase in pollutants or other contaminants.
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23. Despite sharply-worded rhetoric emanating from government spokespersons in Battenland and Alamaguay with respect to the proposed fracking project along the Upper Varsho, high-level talks were held on three occasions during the second half of 2011 and early 2012 to discuss the project. Following a meeting on 3-4 February 2012, Alamaguay announced that the parties had agreed to establish a joint commission to monitor the waters of the Varsho River, and that Alamaguay planned to proceed with the project, that it had met all applicable obligations under international law, and that extraction would begin in June 2013.
24. In a press conference that same day, Battenland’s lead negotiator, Ms. Frances DePino, expressed disappointment with Alamaguay’s announcement. In particular, she noted that Alamaguay had still not disclosed whether an environmental impact assessment had been undertaken, that it was unclear to what extent Alamaguay had considered the potential environmental damage of the proposed project, and that a joint commission had been agreed to only "in principle” and was conditional on Alamaguay first meeting its obligations under customary and conventional international law. Nonetheless, the two sides issued a joint communiqué on 5 February 2012 stating that "progress has been made” and that both governments remained optimistic that a settlement could be reached.
25. In June 2012, Battenland and Alamaguay each sent delegations to the United Nations Conference on Sustainable Development held in Rio de Janeiro, Brazil ("Rio +20”). Battenland’s delegation included Prime Minister Marvell. During the conference, Battenland circulated a Note Verbale to all other attending delegations in which it described Alamaguay’s environmental record as "going from bad to worse” and highlighted reports of pollution in the Niziol Valley National Park caused by nearby leach mining operations and Alamaguay’s plans to extract natural gas "at all costs”. The Note Verbale further proposed that the Conference adopt resolutions condemning the practice of hydraulic fracturing and Alamaguay’s environmental record.
26. Following a session on clean water and environmental risk at the conference, Prime Minister Marvell was stopped by a television reporter as she was leaving a meeting room and was asked whether negotiations with Alamaguay concerning the shale gas project had reached a stalemate. Ms. Marvell responded as follows:
"Negotiations are on-going, I wouldn’t say they have ended. What I will say is that President Maksudian and his proxies can talk to us as much as they want, but the Varsho River project is not going to happen. It violates our boundary treaty and it violates international law. And it just might wipe out a potential cure for cancer that one of our leading companies is developing. How can anyone argue that dumping chemicals into the Varsho River is not going to be of great harm? I’m happy to sit down across the table from President Maksudian until he understands this, but the project cannot go forward, not on my watch.”
27. Alamaguay issued an official statement the following day:
"The Government of Alamaguay is greatly disappointed to learn that the Government of Battenland has chosen to disregard its obligation to negotiate in good faith. The comments by Prime Minister Marvell yesterday made clear what many have long suspected. But Alamaguay will not compromise its national security and its economic future because of these unfounded allegations from across the river. The extraction of shale gas by hydraulic fracturing will proceed as scheduled in 2013.
Moreover, the status of the Kilgus Strip and the Oxbow Marsh remain unresolved. Battenland persists in its illegal occupation of both territories. In light of the fact that Battenland has proven itself incapable of engaging in good faith negotiations and is in violation of Security Council Resolution 2227, Alamaguay is considering its options.”
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28. Amidst the escalating tensions between Battenland and Alamaguay, certain members of the governing coalition in Battenland raised questions about the course set by Prime Minister Marvell. As part of a domestic political compromise, the decision was taken to bring the related set of disputes between Battenland and Alamaguay concerning the Varsho River and Lake Kilgus to the International Court of Justice.
29. On 1 October 2012, Battenland filed its Application in which it asked the Court to adjudge and declare that:  
1. The island known as the Kilgus Strip is part of the sovereign territory of the Kingdom of Battenland;
2. The territory known as the Oxbow Marsh is part of the sovereign territory of the Kingdom of Battenland;
3. The Republic of Alamaguay is in violation of its obligations under conventional and customary law with respect to the proposed development of a shale gas mining site adjacent to the River Varsho;
4. The Republic of Alamaguay is in breach of its obligation to protect the waters of the River Varsho and Lake Kilgus, and the plant and animal life found therein, for the benefit of future generations.  
30. Both Battenland and Alamaguay have filed declarations with the Court pursuant to Article 36, paragraph 2, of its Statute. Neither State has conditioned acceptance of the Court’s compulsory jurisdiction in any way.
31. Following the filing of Battenland’s Application, the Foreign Ministry of Alamaguay issued a statement in which it indicated that it welcomed the opportunity to vindicate Alamaguay’s claims to sovereignty over the disputed territories. Moreover, while Alamaguay indicated that it would not challenge the Court’s jurisdiction over Battenland’s environmental claims, it firmly believed that the Court would find them meritless.
32. Battenland and Alamaguay are parties to the 1966 International Covenant on Civil and Political Rights, the 1966 International Covenant on Economic, Social and Cultural Rights, the 1969 Vienna Convention on the Law of Treaties, and the 1992 Convention on Biological Diversity. Alamaguay is a party to the 1972 Convention Concerning the Protection of the World Cultural and Natural Heritage (since 2001), but Battenland is not. Neither State has signed the 1997 United Nations Convention on the Law of the Non-Navigational Uses of International Watercourses.  


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