ISLAMABAD, Jan 12: An international court of arbitration (COA) constituted by the United Nations will take up in the Netherlands on Friday Pakistan's case against India for constructing a hydropower project on the Jhelum River in violation of the 1960 Indus Water Treaty.

Headed by American jurist Stephen Myron Schwebel, a former judge in the permanent international court of arbitration, the seven-member bench is expected to firm up its schedule of hearings in consultation with delegations of the two countries.

Pakistan has objected to India's move to build the 330MW Kishanganga hydropower and storage project through diversion of Neelum River which, it said, violated the Indus treaty.

Pakistan is of the opinion that the project will not only deprive it of priority rights over the river, but generation capacity of a number of hydropower projects and agriculture on its side would also be compromised.

Mr Schwebel was appointed head of the COA by the UN secretary general two months ago after the two governments had failed to agree on a three-member panel through mutual consultation. The selection of chairman of the court and its two members were made through a draw. The two countries have already appointed two arbitrators each.

Pakistan complained that all bilateral forums set up to resolve such disputes have failed to yield any result because of stubborn attitude of the Indian government. This is the first water dispute between the two neighbours that has been taken up by the COA for adjudication since the Indus treaty was signed 50 years ago.

A four-member Pakistani delegation, led by Prime Minister's Adviser on Water Resources Kemal Majidullah and comprising Deputy Attorney General K.K. Agha, Indus Waters Commissioner Sheraz Jamil Memon and consultant Ms Shumaila, left on Wednesday for the Netherlands to attend the hearing. Two members of the delegation have dual nationalities.

Pakistan has nominated Bruno Simma, a German jurist currently working with International Court of Justice, and Jan Paulson, a Norwegian from an international law firm, as its arbitrators.

India has nominated Peter Tomka, a Slovak national and vice-president of the International Court of Justice, and Lucius Caflish, a professor at the Graduate Institute of International Studies in Geneva.

The time is, however, of real essence. Pakistan is currently facing three problems in implementation of the 969MW Neelum-Jhelum hydropower project -- recent floods, slow pace of acquisition of a part of the project area and non-completion of a bridge. Total physical progress on the project is around 18 per cent. The per megawatt generation cost on the project is about $2 million. India, on the other hand, is working day and night on the construction of Kishanganga project, which will cost an uneconomical $3.2 million per megawatt, but it wants its completion for strategic reasons. India plans to complete the project in Feb 2014, well before the scheduled 2016.

Pakistan is of the opinion that diversion of the river water will reduce 16 per cent power generation capacity of the Neelum-Jhelum power project on the same river downstream Muzaffarabad, Azad Kashmir. The economic effect on the project will be a loss of energy worth Rs6 billion a year.

Moreover, the diversion will reduce river flows near the Line of Control on the Pakistani side for at least six months every year, cause irreparable loss to the environment, particularly to Musk Deer Gurez Park -- a vast national park in AJK near the LoC, and deprive the beautiful Neelum valley of revenue from tourism.

About 200km of riverbed in Azad Kashmir will be affected by the Kishanganga project and about 40km length of river will become completely dry, which is against the international environmental laws. Under the law, at least 70 per cent of river flows are to be protected in case any project is undertaken.