The term ‘national law’ may not be completely accurate. It’s a broad term that refers to the legal system of a given country. However, it does have some nuances that make it more applicable to certain types of cases. Let’s examine how it differs from state sovereignty. A common mistake is to talk about national law and apply it to everything. There are numerous differences between these two types of law. Using a ‘broad brush’ approach can leave you with a very narrow definition.
First, let’s examine the general principle that international law applies in cases where national law is inadequate. It is not an easy task to determine whether the national law of a foreign country has an inherent ineffective remedy for an infringing action. The SPP tribunal aimed to distill that principle into a simple rule. However, the tribunal emphasized that national law should apply when the state that hosts the dispute has chosen not to enact a specific remedy.
When applying national law, arbitrators should avoid imposing their interpretation on the applicable national law. In many cases, this can be counterproductive. In addition to the potential for conflicting interpretations, arbitrators should also keep in mind that they are relying on national law rather than international law. The ICSID convention does not allow arbitrators to make this determination too quickly. A more appropriate approach would be to limit the use of international law to cases in which the application of national law is warranted.