How do arbitrators determine which law applies to a commercial dispute?

In commercial arbitration, arbitrators determine the applicable law primarily based on the agreement established between the parties. The process generally follows these steps:

• Party Autonomy: The award must be based upon the law specifically determined by the parties in their contract.1
• Conflict of Laws: If the parties have not specified the governing law in their agreement, the arbitrator must apply the law they consider appropriate in accordance with the principles of the conflict of laws.1
• Contextual Considerations: In either scenario, the arbitrator is required to take into account the specific terms of the contract and the usage of the relevant trade.1

In the context of international disputes between states, if a submission agreement (or compromis) fails to define the applicable law, the arbitrator generally applies the relevant principles of international law.2