One of the first steps in the process of settlement of international disputes before an arbitration tribunal or a national court, after detrermination of their jurisdiction, is to english the substantive law governing the dispute. In cases when such disputes relate to documentary credits, the question aries if the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce apply as lex contractus or if it is necessary to expressly stipulate the application thereof. Moreever, is the application of the Uniform Customs and Practice for Documentary Credit sufficient for resolution of all disputable issues arising from documentary credits or certain issues do require referring to the relevant provisions of the substantve national law and how would this national law be dermined? In the process of establishiung the national law, it is essential to determine legal nature of the dispute arising from a documentary credit in order to define the primary conflict rule. However, the legal nature is interpreted of the substantive law applicable. This paper reviews certain International Chamber of Commerce arbitration awards in order to define the way in which arbitration applies legal rules of the law applicable for the subject matter of the disputes arising from documentary credits. In conclusion, te paper elaborates the new mechanism of settlement of disputes on documentary credits prepared by ICC, which somewhat differs from the classical notion of arbitral settlement of disputes.