A tribunal must apply national law in order to resolve a dispute. This is because national law may be more applicable to specific disputes, such as those arising from international trade. The balance between the need for party autonomy and the legitimate desire to hold the host state to international obligations must be struck. This can be a difficult balance to strike, and is not always achievable. As such, the concept of ordre public is often value-laden. If national law is not applied properly, the resulting conflict will only escalate and the party will not be able to recover.
If a contract contains provisions regarding the application of national law, then the courts may apply it. National law can apply to international agreements if both parties have consented to it. For example, if the parties agreed that international law would apply, the tribunal must determine whether the agreement contained the terms required for the foreign party to benefit. Moreover, a treaty arbitration may apply national law as well. There are also a number of other cases where a tribunal may find a conflict between international and national law.
Although national law is generally applicable in arbitration, international norms may override national laws. Such a rule may conflict with the doctrine of party autonomy or the sovereignty of the host state. While international law is an important component of the legal system, arbitrators are not bound to do so. They may simply decide that the dispute is too complex to be resolved by international law. This is a risk that arbitrators must bear in mind when deciding which norm to apply in arbitrations.