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India and Pakistan have rejected each other's proposed nominees for the Court of Arbitration to adjudicate on a dispute over the Kishanganga hydropower project in Jammu and Kashmir.
The two sides have decided to draw lots to determine three individuals who will now select the umpires under three categories -- chairman, legal member and engineer member, media reports said on Thursday.
Pakistan made a request two months ago for arbitration on the disputed project, which, it alleges, violates the Indus Waters Treaty of 1960.
On July 13, delegations from India and Pakistan had exchanged the names of proposed members for the court.
The Pakistani side was led by Special Assistant to the Prime Minister on Water Resources Kamal Majidullah and the Indian side by Central Water Commission Chairman A K Bajaj.
After the two sides failed to agree on any names, they decided to set up a panel comprising a chairman, a legal member and an engineer to select the umpires.
The panel will be chosen by drawing lots.
Pakistan is waiting for a date, time and venue in New Delhi to draw the lots.
Pakistan and India will follow the dispute resolution mechanism outlined in the treaty to settle their differences.
Pakistan has also engaged the services of Alan Vaughan Lowe, a professor of public international law with Oxford University and an expert in water-related matters.
Islamabad has opposed the Kishanganga project on the ground that it will reduce the generation capacity of the 969-MW Neelum-Jhelum power project on the same river downstream at Muzaffarabad in Pakistan-occupied Kashmir.
The project will result in a loss of energy equivalent to Rs 6 billion every year, it has claimed.
Pakistan has also claimed that the diversion will reduce river flows near the Line of Control on the Pakistani side for at least six months and cause irreparable losses to the environment, particularly the Musk Deer Gurez Park and denude the Neelum valley.