Both countries approached the World Bank after their joint internal mechanism was unable to sort out their dispute over setting up hydel plants on the same river.
Pakistan had sought the establishment of a Court of Arbitration while India wanted the appointment of a neutral expert.
India complained that this amounted to two parallel dispute resolution mechanisms. As the World Bank has done both, spokesperson of Ministry of External Affairs, Vikas Swarup said, "India cannot be party to actions which are not in accordance with the Indus Water Treaty. The Government will examine further options and take steps accordingly."
He further said the appointment of a neutral expert and establishment of a Court of Arbitration at the same time was legally untenable.
In 2005, India has unveiled plans to build a hydro project on a tributary of the Jhelum River in Jammu and Kashmir. Two years later, Pakistan announced similar plans a little distance downstream and entrusted the project to a Chinese company. The dispute is over which side should make concessions on water flows and storage if two hydel projects are located close to each other.
