The Permanent Court of Arbitration (PCA) has rejected India's objections to its jurisdiction over New Delhi's dispute with arch-rival Pakistan on two key hydropower projects.

The PCA, according to a statement from the international forum, announced Thursday's decision in The Hague, ruling that it has the “competence” to consider matters concerning the 330-megawatt Kishanganga and the 850MW Ratle hydroelectric projects, which have long been a source of contention between the two nuclear rivals.

The PCA ruling came after a lingering legal battle between the two neighbours who, apart from water-sharing, are locked in a string of land and sea disputes, including Jammu and Kashmir.

The court is now set to begin hearing Pakistan's objections to the designs of the two projects, which Islamabad considers as a breach of the Indus Water Treaty (IWT).

Violation of treaty

The two longtime rivals share the water of six rivers under the IWT, a water-sharing agreement brokered by the World Bank in 1960.

Under the agreement, the waters of the eastern rivers — the Sutlej, Beas and Ravi — have been allocated to India, while the three western rivers — the Indus, Jhelum and Chenab — go to Pakistan.

Pakistan accuses India of "continuously" violating the treaty by building dams on the western rivers, whereas New Delhi thinks Islamabad controls more water than New Delhi as a result of the treaty.

India is also locked in a water dispute with China on Beijing’s construction of dams and proposed diversion of the Brahmaputra River, which originates in Tibet and provides a third of India’s needs for irrigation.

Pakistan welcomes the ruling

Pakistan welcomed the ruling, terming it a "way forward" on disputes with India.

Foreign Ministry spokesperson Mumtaz Zahra Baloch said in a statement that the IWT is a "foundational" agreement between Pakistan and India on water sharing, and Islamabad remains "fully committed to the treaty’s implementation, including its dispute settlement mechanism."

"We hope that India would also implement the treaty in good faith," she maintained.

India calls for neutral experts

Rejecting the PCA ruling, India said that it cannot be "compelled to recognise or participate in illegal and parallel proceedings not envisaged" by the IWT.

"We have seen a press release issued by the PCA mentioning that an illegally-constituted so-called Court of Arbitration has ruled that it has the ‘competence’ to consider matters concerning the Kishenganga and Ratle hydroelectric projects," India Foreign Ministry said in a statement.

Contending that India’s consistent and principled position has been that the "constitution" of the so-called Court of Arbitration "is in contravention of the provisions" of the treaty, the ministry said a neutral expert is already seized of the differences pertaining to the Kishenganga and Ratle projects.

"The neutral expert proceedings are the only treaty-consistent proceedings at this juncture. The treaty does not provide for parallel proceedings on the same set of issues," it said.