As a rule, when parties agree to apply a specific national law, that law will be followed. This is because the host state has sovereignty over the claim. The nature of the claim is a more neutral determinant of choice of law, as claims arising from breaches of a contract, for example, are generally considered national in nature. But the question of who gets to decide which law is right is a more complicated one. So, how do we decide?

Sometimes international and national law overlap in application, or there may be conflicting interpretations. For example, national and international law can apply when a particular claim has a particular ‘national’ component. This is the case, for example, in claims concerning investment treaties, expropriation, and umbrella clauses. But national law can apply in these situations, if there are lacunae or conflicts between international law and a fundamental national norm.

In addition to domestic law, there is an international law that can govern trade in a certain country. This international law is often more complex than national law, because it involves trade usages and unwritten rules. It can also be a ‘common core’. If these rules are derived from domestic laws, they cannot be considered truly a-national. That is why it is important to know about both types of law when determining which one is the most appropriate for a particular business.

In the absence of international law, a nation’s legal system can be divided into two distinct subsets. National and international law are often described as two separate systems. The distinction between these two systems is often made between dualism and monism. Dualism stresses the separate character of national and international legal systems. National laws apply only within a state, while international rules can be applied in part to national laws. However, when one state’s legal system conflicts with another country’s law, the national law will be applied.