The International Criminal Court said the government of Libya has challenged the court's right to try Muammar Gaddafi's son, Saif al-Islam, for war crimes.
The Hague is authorised by the United Nations to try war crimes committed during Libya's civil war.
It has issued an arrest warrant for Saif al-Islam on charges of murdering and persecuting civilians in the early days of the uprising that toppled his father's regime last year.
The court said it has received a formal submission from Libya's new regime arguing that Saif al-Islam should be tried on Libyan soil. The regime also argues Gaddafi's former military intelligence chief, Abdullah al-Senoussi, should be tried in Libya.
Saif al-Islam was captured by rebels last year and is being held in the western town of Zintan, while al-Senoussi was arrested last month in Mauritania. Libya is seeking his extradition.
The conflict between the court and country boils down to the question of whether Libya is capable of conducting a fair trial for the pair.
Under international law, a country has both the right and the duty to prosecute suspected war criminals.
However, court spokeswoman Sonia Robla explained that once the court has issued an arrest warrant for a suspect, it cannot retract it unless judges believe suspects will be tried for substantially the same crimes they were indicted for, and that they will receive a fair trial. Libya's filing says it seeks to do exactly that.
"Libya respectfully submits that... its (own) national judicial system is actively investigating Mr Gaddafi and Mr al-Senoussi for their alleged criminal responsibility for multiple acts of murder and persecution... amounting to crimes against humanity," the application said.
Human rights groups have expressed concern that Saif al-Islam will not get a fair trial in Libya, especially given the central government's lack of control over some areas - including Zintan - in the aftermath of the civil war.