New Delhi: India on Thursday night took strong exception to the World Bank's "inexplicable" decision to set up a Court of Arbitration and appoint a Neutral Expert to go into Pakistan's complaint against it over Kishenganga and Ratle hydroelectric projects in Jammu and Kashmir.
Surprised at the World Bank's decision to appoint a Neutral Expert, as sought by the Indian government and at the same time establish a Court of Arbitration as wanted by Pakistan, India said proceeding with both the steps simultaneously "legally untenable".
"Inexplicably, the World Bank has decided to continue to proceed with these two parallel mechanisms simultaneously. India cannot be party to actions which are not in accordance with the Indus Waters Treaty.”
"The government will examine further options and take steps accordingly," External Affairs Ministry Spokesperson Vikas Swarup said.
Under the Indus Waters Treaty, signed between India and Pakistan and also the World Bank in 1960, the World Bank has a specified role in the process of resolution of differences and disputes.
Swarup said on the issue of differences between India and Pakistan on Kishenganga and Ratle hydroelectric projects under the Indus Waters Treaty, India had asked the World Bank to appoint a Neutral Expert to resolve the differences of a technical nature which are within the domain of a neutral technical expert.
Pakistan had sought the establishment of a Court of Arbitration, which is normally the logical next step in the process of resolution in the Treaty. The Neutral Expert can also determine that there are issues beyond mere technical differences, he noted.
Pakistan has raised objections over the design of the hydel project in J&K, saying it is not in line with the criteria laid down under the Indus Water Treaty between the two countries.
"The World Bank has decided to proceed with both steps simultaneously. It was pointed by the government to the World Bank that the pursuit of two parallel difference/ dispute resolution mechanisms - appointment of a Neutral Expert and establishment of a Court of Arbitration - at the same time is legally untenable," Swarup asserted.
Noting that despite India's clear advice not to proceed with both together, the World Bank has decided otherwise, thereby, raising questions over the "viability and workability" of the 56-year-old Treaty.
Indus Waters Treaty provides for a hierarchy to resolve differences and disputes vide article IX.
First, the bilateral Permanent Indus Commission (PIC) can addresses technical 'questions' and if PIC can't resolve the matter, the question becomes a "difference", which is addressed by a Neutral Expert (NE) appointed on request by either party.
If the Neutral Expert decides so, he can refer a part of a difference or the whole of it for resolution by a Court of Arbitration (COA). COA has 7 members, 2 arbitrators to be appointed by India and Pakistan, and 3 'Umpires' nominated by certain global dignitaries.
If parties can't agree on who will nominate the 'umpires', a draw of lots decides which three of these global dignitaries will nominate one umpire each.
Pakistan had lost its case in a COA in 2013 when its objection that Kishenganga project can't be built in a tributary diversion was overruled.
Nevertheless, Pakistan persisted in its flawed and obstructive approach to object in technical design parameters such as pondage (volume of water used for running turbines), etc.
It first itself suggested Neutral Expert even in 2015, which it rescinded later. It notified its intention to India to move for COA. India didn't agree to this because there are design matters, preferably addressed by PIC, or at the most by NE.
In violation of Treaty provision and procedure, Pakistan approached the World Bank in August 2016 for COA.
Since PIC was unable to agree on resolving these differences, India notified Pakistan in august 2016 at the Commission level that the differences should be addressed by NE. This was after a meeting of water secretaries of the two countries, which India offered out of good will, in July did not address the matter due to Pakistan's intransigence as it had already decided to go for Court of Arbitration.
IWT clearly states that while NE is dealing with a difference, other mechanisms for settlement of differences and disputes will not address the same matter.