International law is traditionally considered to be made by the sovereign states and for the sovereign states. Its subject matter includes diplomatic relations, military issues and state territory. The exclusive focus of International law on relations among states has proved to be both a source of strength and of weakness. The control which is exercised in the making and implementation of International law by the different states has greatly contributed to the increase in the effectiveness of the law. it is very unlikely that the States will develop any legal norm unless there is a harmony with their national interests and unless they plan to abide by them.

The consent of states is the cornerstone of international law. This process of communication from which the consent emerges is quite complex, but leads to typical outcomes. Treaty is one such outcome, in which consent is given explicitly to any rule of international law. Customary international law is another outcome, where such consent is more implicit in nature. Treaties and customary law are two such norms which continue to be the most important sources of international law.

New areas of international law emerged in the course of the 20th Century, which was completely different from the traditional pattern of a legal system which concerned solely with relations among sovereign states. These human rights were the new area which emerged as an important area of concern for the world community.

The provisions relating to human rights deal with the treatment of individuals and groups, laws relating to international criminals and international economic law that purports to regulate the activities of private participants in the international market and also with the approach of the states to deal with them. Contrary to the more traditional areas of international law, these newly emerged fields are not primarily concerned with balancing state interests. Their area of concern is the rights and duties of individuals, groups and companies.

State boundaries have been transcended by many of the interests involved. Some of them aim at the entire global community. But most of the legal techniques for handling these international issues have remained largely unchanged. The states still control a lot of legal tools, and these legal tools are usually conditional upon their consent and are often aim at furtherance of their specific interests. To begin with the topic, it is desirable to survey briefly the traditional typology of the sources of international law. Thereafter, the application of international law in particular in international investment law is demonstrated.

• To study interaction between the sources of International law; and
• To study application of International law

Meaning and definition of International Law

Meaning
International law is the body of agreements and treaties between the nations which govern and determine the interaction of one nation with other nation, one nation and the citizens of other nation and also the business interactions between different nations. In today’s world of globalization, no state can exist independently and in seclusion. Every state is in relation to the other states of the world.

International law can be divided into two different categories which are as follows:

• Private international law,
• Public international law.

Private International law is applicable to the cases involving the disputes and controversies between the private bodies like humans or corporations which have a relationship with one or more nations. For example, the legal dispute which arose due to the toxic gas leak from the industrial plant which was owned by Union Carbide, the U.S. Corporation in Bhopal, India is considered as a dispute which is governed by the principles of private international law.

Public International law mainly governs the relationship between nations. The legal areas of which are governed by this law are standards of international behavior, laws relating to the sea, economic laws, environmental laws, laws relating to human rights, and diplomatic laws.

The principles of public International Law can be written or unwritten i.e. codified or uncodified. The principles are codified usually under the treaties. The principles which are uncodified are known as customary laws and there is no need for the nations which consider such laws to be binding upon themselves to do any overt act to ratify it.

Definition of International Law

There has been no consensus between the jurists regarding the definition of international law because of the nature of the international law which is very difficult to confine under the boundaries of words. However, several jurists have defined the term.

Below are the definitions by some of the prominent jurists and experts:

• Prof. L. Oppenheim:
  Law of Nations or International Law is the name for the body of customary and conventional rules which are considered legally binding by the civilized states in their intercourse with each other.
   
• J.L. Brierly:
  The Law of Nations or International Law may be defined as the body of rules and principles of action, which are binding upon civilized states in their relations with one another.
   
• Torstein Gihl:
  The term International Law means the body of rules of law which apply within the International Community or society of Sates.
   
• In the Queen v. Keyn, Lord Coleridge, C.J., defined International law in the following words:
  The law of nations is that collection of usages which civilized States have agreed to observe in their dealings with one another.
   
• R.N. Gilchrist:
  International Law is the body of rules which civilized states observe in their dealings with each other. These rules being enforced by each particular state according to its own moral standard or convenience.
   

Sources of International Law

In the absence of any world government, there is no world Congress or parliament to legislate international law the manner in which ordinary laws of any country is drafted. This creates a difficulty in determining what exactly International law is. It is desirable to survey the traditional typology of the sources of international law at the onset.

The International Court of Justice while deciding any dispute in the international arena is guided by Article 38 of the Statute of International law which directs the manner in which the hierarchy of sources of International law has to be applied in an orderly way.

The hierarchy of the sources of International law as directed by the statute is as follows:

1. General or particular International conventions, which establishes the rules expressly recognized by the contesting states;
2. International custom, which are evidenced by a general practice accepted as law;
3. The general principles of law which are recognized by civilized nations;
4. The judicial decisions and the teachings of the most highly qualified publicists of the various nations subject to the provisions of Article 59 are to be considered as subsidiary means for the determination of rules of law.

Treaties

Treaties are basically the agreements which are entered into by the sovereign states and they are the most important sources of the International law. They are also known as pact, agreement, covenant, charter, protocol, memorandum of understanding and exchange of letters. Treaties deal with a large spectrum of topics and they either be unilateral or bilateral. The multilateral law-making treaties codify certain fields like Law of Diplomatic Relations or the Law of the Sea. The people who are interested in understanding the development of International law mostly focuses on multilateral treaties.

Some of the multilateral treaties have been quite successful and have been ratified by most of the states and have been useful in bringing stability to the areas of international law which are regulated by them. The Vienna Convention on Diplomatic Relations, which commands almost universal participation and acceptance is probably the best example. However, such partial success can’t veil the fact that the creation of multilateral treaties suffers from many shortcomings.

The process is both cumbersome and protracted. For example, the Law of the Sea Convention, the making of which was initiated in 1973 with the United Nations Conference on The Law of the Sea took until 1994, to complete its entry into force for 60 states and even then it was not ratified by most of the countries including United States and United Kingdom.

There are several stages involved in the making of a multilateral law-making treaty.

These are as follows:

1. The first is deliberation by an expert body such as the International Law Commission.
2. The acceptance of a draft treaty by a political body, such as the General Assembly of the United Nations.
3. Then, the text of the draft treaty is finalized usually at a State Conference.

The treaty is finally ratified by the individual states which results into the enforcement of the treaty. Even after coming into force a treaty, only those states are bound by it that have given explicit consent to be bound. The withholding of the consent by even a single but a powerful state like America can severely undermine the enforceability of the treaty. Recent examples of such a situation are the Law of the Sea Convention, the Comprehensive Nuclear Test Ban Treaty or the Rome Statute for an International Criminal Court.

The states even after ratifying a treaty could reduce its impact by attaching far-reaching reservations. A reservation is a unilateral statement by a state purporting to exclude or modify the legal effect of certain provisions of a treaty in their application to that particular state. The objections to the reservation could be raised by the other states.

Whether the reservation conforms to the treaty's objective and purpose is the most essential standard for the admissibility of a reservation. One of the best examples of the dilemma which arose out of the reservations is the Convention on the Elimination of All Forms of Discrimination against Women of 1979.

This Convention has been ratified by several Islamic states, however, subject to far-reaching reservations. A large number of countries have raised objections to these reservations as being contrary to the objective and purpose of the Convention.

Another drawback of the treaties is the interpretation and application of treaties, which is frequently complicated because of the different language versions of them and the way they are framed by lawyers who operate under different legal traditions. The multilateral law- making treaty is thus considered far from being considered as an effective instrument of international legislation. But bilateral treaties generally serve as an instrument of lawmaking.

In fact, a series of bilateral treaties regulate certain areas of international law. To name a few, extradition treaties, air transport agreements, and bilateral investment treaties. However, in the course of time it has become apparent that this method is neither efficient nor elegant. To create a network of bilateral treaties on a single topic, among all 188 members of the United Nations, 17,000 such treaties are required, with each of these treaties being negotiated individually! Although often similar, these treaties are likely to display variation and consequently, do not create uniformity and equality of treatment.

Customary Law

Customary laws are much more common in international law than in most of the domestic legal systems. These in a way reflect the lacuna of the International law to develop any efficient law-making system. The pattern of the international relationship between the states is the primary source of evolution of the customary international law. These behavioral patterns are known as practices. If there is also a belief attached to the practice that it is based on any legal obligation or opinio juris, then the practice becomes a customary international law. There are several theoretical problems attached with the customary international law.

Some of the important questions which mostly remain unanswered are as follows:

1. How widespread a practice should be to consider it as a customary international law?
2. How much time a practice takes to establish itself as a customary law?
3. How does one rule of international law replace by another such rule?

There are also practical disadvantages with the customary international law. One of the major problems lies in the fact that Customary international law can be difficult to establish conclusively as to studying the practices of so many states finding out the relevant statements expressing a legal conviction, where such is available requires a lot of research.

Sometimes customary international law also turns out to be somewhat vague and open to conflicting interpretations. In a case where the perceived interests of certain states or groups of states change, their attitude towards customary international law will also be altered, and a particular rule may then be challenged.

General Principles of Law

General principles of law as a source of international law are theoretically equivalent to treaty or customary law. But in actual practice, general principles are used mostly used to cement those gaps which are left by treaties and customary law. Comparison of various national legal systems around the world establishes General Principles of law. The principles which are found common in all or majority of the legal systems in the world are considered to be applicable even in the International arena. The examples of such principles would be the binding nature of agreements, protection of acquired rights, and prohibition of unjust enrichment or principles of procedural fairness before a court of law.

General principles of law are applied quite often, especially by international arbitral tribunals and are considered to be an important source of International law. The drawback of General principles of law is that the positive proof of their existence and application is more or less complicated and so they turn out to be rather unwieldy. In practice it is not possible to compare all the legal systems of the world. A practical solution is often tendered by studying some leading representative systems of law, derived from different legal cultures such as civil law, common law and Islamic law, quite often with the help of secondary publications in languages which are accessible.

Decisions of Courts and Tribunals

In strict sense the decisions of the courts and tribunal and scholarly writings are not proper sources of International law. It means that the courts of law and legal scholars are not supposed to create the law and their work is to apply the existing laws, and to clarify legal provisions by their decisions and writings.

The practical aspect of the value of the decisions of courts and tribunal is not akin to the theory as the distinction tends to get rather blurred. The importance of the decisions of courts and tribunal is easily discernible to anyone who studies international law in greater detail, as the courts and arbitral tribunals have actually advanced the law, and the theoretical framework provided by a scholar tends to influence decision-makers in practice.

This is quite obvious because there is a good deal of interaction in professional circles, among those who are involved in treaty-making, state practice, adjudication and scholarly publications. For example, sometimes professors become judges, give advice to the parties involved in any legal proceedings or are consulted by government officials. In other words, there is a community of international lawyers, similar to other scientific communities like those of astronomers, anthropologists or cardiologists.

Decisions of International Organizations

The statute of the court of justice declares only four official sources of international law but a question is posed by most of the scholars that if the list of the sources of International law is exhaustive and what about the decisions of the International Organizations which have proved to be a major source of International law in the course of time as they have not been mentioned as a source of law.

The reason behind the non-inclusion of the decisions of International Organizations could be easily perceived. The official list containing the sources of International law was incorporated in the Statute of the International Court of Justice about 80 years ago, long before international organizations became a prominent feature of international life. Therefore, the decisions of these international organizations are relatively a newer phenomenon. However, their importance in the contemporary scenario cannot be denied.

The acceptance of decisions of international organizations also lead to fresh problems as the decisions of international organizations are extremely diverse in nature they defy any generalized description or analysis. Yet, the fact that some emanate from regional organizations like the European Community or the Gulf Cooperation Council and others from global organizations, like the United Nations, is a relatively minor problem. The major problems arise on the question of the legal nature of these decisions in any particular case.

Some decisions like the regulations of the European Community are generally binding rules, and are comparable to domestic legislation. Many others, like the Resolutions of the General Assembly of the United Nations, are mere recommendations. But it does not follow that they do not have any legal relevance. In fact, legal arguments are usually backed by these recommendations.

However, not all of these decisions are equally authoritative and a detailed analysis of such factors as the number of positive votes, which countries voted in favor or any confirmation through repetition, is required to determine the legal significance of these decisions. The matter is further complicated by the adoption of certain decisions as binding at some times by the bodies like United Nations Security Council, such as resolutions imposing sanctions on members.

The Security Council simply passes a recommendation calling upon states to follow a particular course of action, like suggesting a form of dispute settlement in the other times. The determination of the legal nature of a particular Security Council Resolution requires that its text should be studied with a view to interpret the intention of the Council while framing those decisions. In most cases, however, this is not a practical problem.

Interaction of Sources

After the analysis of different sources of international law, it is desirable to clarify the relationship of these sources with each other. It would be an incorrect assumption that the different sources of international sources exist in isolation: that some aspects of international law are regulated by treaties, others by customary international law and the remaining others by the decisions of international organizations. In practice, different sources interact closely and impact each other.

In reality International law is not just a static system of rules but is basically an evolution of decision-making process. The identified rules of law are the abstractions which are derived from this process, but they are not its essence. Even a treaty, which apparently is a clear set of written rules, is part of this process.

Treaty is a result of a long evolution that involves customary international law, prior treaties and often deliberations and decisions made by international organizations. After the conclusion of any treaty the next step is its implementation and interpretation by international and domestic courts, it finally becomes a part of state practice, which sometimes leads to the evolution of new customary international law and may ultimately be amended or abrogated by any another concluded treaty.

The complex interaction of the sources of International law finally breeds a very practical consequence. While examining any legal issue it is not enough to find the ‘right’ rule only by identification of the treaty that is applicable or the appropriate rule of customary international law. Rather, it is pertinent to take a synoptic look at the various sources in order to analyze their relative relevance and authority.

Application of International law

The observations which are stated above can be illustrated by giving a wide overview of international investment law. Basically, investment law was considered to be mostly derived from customary international law. Today some of the traditional investment law still exists.

It provides the foreign investors with certain procedural guarantees, like fair treatment and protection of investors by the home states, compared to the host states. The two important features were and still are the protection of property from expropriation, and adherence with terms of contracts concluded between investors and host states.

By the 20th century several events which took place disturbed the seemingly stable picture of the international investment law. The very first amongst these events was the upsurge of socialist ideologies, chiefly in the Soviet Union with its abandonment of private business and property rights. The development of new doctrines in Latin America with to shed economic domination by the European powers and later by the United States was second such event.

Such Latin American doctrines gave rise to the Calvo Doctrine, named after the 19th Century Argentinian diplomat and Jurist Carlos Calvo. This doctrine aims at keeping the foreign investors at par with the national investors and denial of any special treatment for better or for worse.

The third was decolonization and it is regarded as the most consequential one. Many newly independent countries contended that the guarantees and special treatment was reserved by the foreign investors in their land during the unequal conditions, and that the continuation of such privileges constituted perpetual exploitation, and that investors had made and were still making excessive profits, at the cost of the host countries and their populations. The exploitation of raw materials were the major investments that often-stirred controversies, in countries which were heavily dependent on these raw materials for their export earnings.

The consequential disputes were discussed in various scholarly publications, in international organizations and before arbitral tribunals. In addition to the references to the investment laws these disputes also involved the invocation of general principles of law by both sides while the investors' side relied on acquired rights and the sanctity of contracts the host countries relied on unjust enrichment and on the unequal nature of the agreements. Additionally, a new doctrine was developed under the label of permanent sovereignty over natural resources.

This doctrine has been included in several resolutions passed by the United Nations General Assembly and it most importantly proclaimed that states shall have a permanent and inalienable right to control the natural resources in their territory, irrespective of any contractual or property rights that foreign investors may have acquired. The permanent sovereignty over natural resources was preferred over the principle of sanctity of contracts and property rights.

This conflict has culminated in a series of resolutions which were adopted by the UN General Assembly in the 1970s. The Charter of Economic Rights and Duties of States, adopted in December 1974 was the most important of these resolutions. An overwhelming majority which was controlled by developing and socialist countries had approved it. Most of the negative votes or abstentions came from western industrialized states. Not everything contained in that resolution was controversial. Some of the principles like sovereign equality, peaceful settlement of disputes and promotion of international social justice were acceptable to all. But the provisions regarding expropriation was one point on which differences were irreconcilable.

In principles, the right of the states to expropriate was not contested. However, there was some relief which was sought to be provided by the inclusion of a new clause in the Resolution which provided that where a dispute arises over compensation for expropriation, the right to decide such case shall lie with the courts of the expropriating state and on the basis of the law of the expropriating state.

In was an attempt to de-internationalize the issue by making it an internal matter of the state that took the action. However, this was not acceptable to the capital-exporting states and to the investors themselves as they insisted that any expropriation would have to be compensated, and that this compensation would have to be adequate, meaning that it would have to represent the full value of the expropriated property, that it would have to be prompt without undue delay, and should be effective, that is, in a convertible currency.

Whether a nonbinding resolution of the United Nations General Assembly could abrogate customary international law was a major point of discussion. In one of the famous arbitral awards in a case against Libya it was specifically denied. One of the conceptual problems of customary international law was the continuing overwhelming legal conviction of the international community in the face of a contrary resolution of the General Assembly adopted with a large majority.

How to terminate an existing rule of customary international law? Is it possible only by the introduction of a new positive rule of customary international law? Or can it simply terminate, if one of the two elements for its creation, such as practice or legal conviction, no longer exists? Were some of the questions which were posed by most of the scholars of that time.

The practical consequences of confrontational atmosphere and developments that prevailed were not favorable to economic development. A number of uncompensated expropriations which were pronounced on investor protection in international organizations received adverse publicity in the West. Investor confidence waned. In the 1970s and 1980s foreign direct investment dropped steadily. The debt crisis of the 1980s was one of its consequences. Economic development in many countries came to a halt or even showed signs of regression.

In the 1990s this situation underwent a transformation. The major reason for this transformation was the acknowledgment in most developing countries that the continuing flow of private investment is the biggest single factor in economic development. The private investment demands a secure legal environment, and these legal safeguards had been undermined seriously in the 1970s.

Interestingly, the traditional bilateral treaty turned out to be the most important legal instrument to restore investor confidence. The bilateral investment treaty (BIT) was pioneered by Switzerland and Germany and in no time, it became the favored way for many countries to guarantee legal protection to investors. The access for investors and guarantee of fair and equitable treatment is regulated by BITs. In the case of expropriations, typically by providing for full, prompt, and effective compensation these treaties grant protection. The most important part of these treaties is that in case of disputes between investors and host states, they offer procedural guarantees, typically through provisions for international arbitration.

By no means are BITs concluded only between industrialized and developing countries. They have turned into a ubiquitous aspect of international economic relations. Most often they are concluded between developing countries. The succeeding states of the Soviet Union have concluded many BITs. China has BITs with about 100 states. The different estimates reveal that now there are over 1,500 BITs worldwide. Domestic legislation is another unexpected source of international investment law. In today’s world, the capital-importing states are eager to project themselves as secure and reliable domains for foreign direct investment.

The creation of a multilateral treaty is one obvious way of improving international investment law. However, the attempts to create a comprehensive Multilateral Agreement on investment (MAI) designed in order to supplement or replace the multitude of bilateral treaties have not succeeded and are not likely to succeed in the near future.

However, the Convention on the Settlement of Investment Disputes between States and Nationals of other States is one of the multilateral treaties dealing with dispute settlement that deserves mentioning. It is. This Convention is responsible for the International Centre for Settlement of Investment Disputes (ICSID). An independent system of conciliation and arbitration is offered by ICSID Convention and it is, in principle, available in most investment disputes.

Most of the capital-exporting and capital importing countries have ratified this multilateral treaty. It is required that the host state and the investor agree to submit any disputes to this system by concluding a contract between the two parties. A clause in domestic legislation or in a bilateral investment treaty offering this form of dispute settlement to investors who may take up this offer at any time is often frequent.

This system offers advantages to both sides involved in an international dispute case. The investment climate is improved by the host state by boosting investor confidence and thereby is likely to attract more investment. Additionally, the host state gains a guarantee that the home state of the investor will not exert any diplomatic pressure on the host state.

In turn, the investor is no longer required to depend on the domestic courts of the host state that might be perceived as biased by him. Instead, he acquires access to international arbitral tribunal. The tribunal applies not only the domestic laws of the host state but also international law. The result is a binding and enforceable arbitral award that is to be abided by all countries that are parties to the Convention.

It is estimated that more than half of the world's private investments are currently protected by this system. Many cases have been decided under this system and there are still a larger lot of the pending cases. More importantly, the mere knowledge of existence of an effective system of dispute settlement has a deterrent effect and so it is likely to induce legal conformity in the first place which will definitely contribute towards stability.

The review of the decisions of arbitral tribunals under this system emerges an already familiar picture. All the sources of international law are applied by these tribunals jointly and not separately. Multilateral and bilateral treaties, typically BITs are also relied on by these tribunals. Customary international law and general principles of law are applied by them. The tribunals also refer back to decisions of other arbitral tribunals and international courts. Thus, the interaction and interrelation of the various sources of international law can clearly be discerned even in the microcosm of an arbitral award in an investment dispute.

Conclusion
There are various sources of international law such as treaties, customary international law and general principles of law. Practically, these sources are closely interrelated and often interact by supplementing and replacing one another. Mostly a rule created in one type of source consequently emerges in other form of source. Thus, these sources of international law ought not to be viewed in isolation.

Most states around the world are bound by numerous international instruments guaranteeing a broad range of human rights. A question that is often raised is what happens when a particular state is bound by two international instruments which set out diverging levels of protection of a particular human right. The general rule in this regard is that in such a case the state implements the most far-reaching obligation or highest standard. To this effect most of the human rights conventions contain special provisions.

For example, Article 5(2) ICCPR and Article 5(2) ICESCR provides that ‘There shall be no restriction upon or derogation from any of the fundamental human rights recognized or existing in any state party to the present Covenant pursuant to law, conventions, regulations or custom on the pretext that the present Covenant does not recognize such rights or that it recognizes them to a lesser extent.’

The number of ratifications and accessions to conventions demands special attention within the realm of standard setting. The human rights conventions which have been widely ratified have a greater value and impact, and they reinforce the universal character of human rights law, as well as the equality of all human beings under the law. Widely ratified conventions (with possibly lower number of reservations) contribute highly in ensuring equal application of human rights standards.

It is contended by most of the scholars that much of the standard-setting work has already been completed. In addition, it is pointed out that in recent decades there has been an excessive proliferation of standards, and a means for better implementation of the existing norms are required. Further elaboration of basic human rights is the need of the hour as they have only been roughly defined. Better legal protection is required for human rights defenders, lesbian, gay, bisexual, and transgender people and persons belonging to indigenous peoples, or in relation to particular issues such as transitional justice or scientific advances in biomedicine.

In the current international system, the law-making process is far from ideal, as it is poorly coordinated and rather haphazard. However, even after this structural weakness, most of the time the system works surprisingly well but this must not induce complacency. The present and prospective global challenges call for fresh thinking in the sphere of international law. It requires a high level of creativity to come up with innovative ideas and techniques and even greater courage to implement them effectively.