(1) The Tribunal shall apply the rules oflaw designated by the par- ties as applicable to the substance of the dispute.Failing such designa- tion by the parties,the Tribunal shall apply (a) the law determined by the conflict of laws rules which it considers applicable and (b) such rules of international law as the Tribunal considers applicable.

(2) The Tribunal may decide ex aequo et bono if the parties have expressly authorized it to do so and if the law applicable to the arbitra- tion so permits.