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The Lex Mercatoria (Old and New) and the TransLex-Principles

The Lex Mercatoria (Old and New) and the TransLex-Principles

Klaus Peter Berger


[ back to TransLex Principles ]


1The historical Lex Mercatoria (I.1.) and its rediscovery in modern times (I.2.) are both described in detail in this text. It also explains the concept behind the TransLex-Principles, a systematic online-compilation of over 130 principles and rules of the New Lex Mercatoria (II.).

 

I. The Lex Mercatoria: Old and New 

2The modern debate on the existence and content of a New Lex Mercatoria uses terminology and makes claims of historical continuity which require a closer look at the historic roots of the Lex Mercatoria in order to allow for a better understanding of the modern discussion. 

1. The Historical Law Merchant

3The historical Lex Mercatoria was the Law Merchant of the Middle Ages - to the extent that it did in fact exist - and early modern times. It is said to have emerged from the customary practices of the traders and merchants of those days, both in the area of maritime trade (a.) and general commercial transactions (b.).

a. Admiralty

4Admiralty provides the most prominent and oldest example for the evolution of uniform customs, practices and legal principles in cross-border trade. Long-distance sea transport, by its very nature, has always required its own "super-territorial" rule-making based on the special routines, traditions and needs of mariners, freighters, charterers, ship-owners and merchants involved in overseas trade. The early Egyptians, Phoenicians and Greeks had extensive commercial exchanges through sea transport over the Mediterranean Sea and established the first unwritten customs and rules of maritime transport.

5Traces of early written manifestations of sporadic rule-making in maritime trade are to be found in the Code of Hammurabi (ca 1780 BC) and the Sumerian Laws Handbook (ca 1700 BC). The first full-fledged codification of maritime law was the Rhodian Sea Law (Lex Rhodia), a body of regulations governing commercial trade and navigation in the Mediterranean sea dating from 800-600 BC. It has shaped maritime law over centuries and its influence is still felt today. The text is lost, but during the expansion of the port of Rhodes in modern times, a granite column was found which carried an inscription related to the Lex Rhodia. The Lex Rhodia dealt with, e.g., the case of jettison ("Lex Rhodia de iactu"), a rule of maritime law that still exists today under the name "general average". According to that rule, parties to a sea transport are tied together as a risk-sharing community and proportionally share any losses resulting from a voluntary sacrifice of part of the cargo to save the ship and the rest of the cargo in an emergency situation, like storms or serious damage to the ship. The Lex Rhodia was subsequently adopted by Roman jurisprudence in Title 14.2 of the Digest ("de lege Rhodia de iactu“) as a collection of practices and customary rules. The Lex Rhodia was so powerful and its impact was so lasting that it influenced the rule-making activities by all parties involved in long-distance sea transport in the Middle Ages. The Lex Rhodia is an early manifestation of self-regulation in cross-border maritime trade. Therefore, it has rightly been characterized as "a sort of common lex mercatoria maritima for the states bordering on the Mediterranean Sea"1.

6Traces of the ancient Lex Mercatoria of the sea can also be found in other early collections of maritime trade principles. The "Nomos Rhodion Nautikos" ("Νόμος Ροδίων Ναυτικός") was a private Byzantine compilation of maritime customary rules, the first and orginal version of which was made between 600 and 800 AD and was later incorporated in the Basilicorum libri, whose Book LIII deals mainly with maritime law, as an Appendix by the emperor Leo VI (886–912). Its influence is shown by the fact that it was copied century after century with no changes to substance, but only to form and language.

7 The Maritime Ordinances and Customs of the Sea ("Ordinamenta et consuetudo maris") of the City of Trani, one of the most important ports of southern Italy in the early Middle Ages, were put together in 1063 AD by elected consuls of the local Guild of Navigators. The Ordinamenta contained 32 rules and principles of maritime trade of those days. A translation made from the original Latin was published in 1501 in Venice. Maritime Ordinances were also issued by other major port cities like Arles (1150), Marseille (1162), Genoa (1186), Morea, the Peloponnese peninsula (1200), Venice (Capitulare navium of 1205 and the Statuta et ordinamenta super navibus of 1255) and Aragon (1270 and 1340).

8The Rôles d'Olérons ("Jugements de la mer", also known as "Loix de Layron" or "de coutumes de la mer") of the early thirteenth century were based on a long succession of decided (real or hypothetical) cases in the local Admiralty Courts on the island of Oléron in the Bay of Biscay. Each paragraph of the Rôles was drafted in the form of a ruling on a case, always ending with the wording "et cest le jugement en ceo cas". For the case of jettison, the Rôles provided that "the Roman law must be applied", probably a reference to the Lex Rhodia. Translations of the Rôles existed into Flemish/Dutch ("Judgements of Damme", "Vonnesse van Damme") and Scots ("Of laws of ships"; "Of lavis of scyppis") and spread through Western Europe. The Dutch collection of customary law of the sea of the Zuidersee towns ("Ordinancie ende insettinghe die de coopluden ende schippers holden mit malcander") dated from the mid fourteenth century. Both the Vonnesse and the Ordinancie were transmitted as a unit in manuscripts centuries after their creation, obviously in an effort to create a collection of sea laws valid in different parts of Western Europe.

9 The binding authority of the Rôles and customs of the seas was repeatedly confirmed in other texts related to maritime trade. An ordinance by the French King Charles V ("the Wise") of April 1364 gave Castilian merchants the privilige to have their maritime claims judged according to the Rôles ("coutume de la mer et les droiz de Layron")2. Likewise, the English Inquisition of Queensborough, which contained 70 verdicts and articles rendered between 1375 and 1422 by a commission of 18 expert seamen appointed by King Edward III for examining the maritime law of those days, acknowlegded the force of the Rôles as well as the need for speedy proceedings ("Est de faire sommaire et plein proces selon loy marine et ancienne coustume de la mer")3.  

10Another influential compilation of maritime law of those days was the Catalan Book of the Consulate of the Sea ("Llibre del Consolat de Mar" or "Les costums marítimes de Barcelona universalment conegudes per Llibre del Consolat de mar") which was printed in the late fifteenth century in Barcelona. It contained a code of procedure issued by the kings of Aragon for the guidance of the "consuls", the commercial judges of the maritime cities on the Mediterranean coast, as well as a collection of ancient customs of the sea. Also included was a body of ordinances for the regulation of warships. The Book circulated in Europe under the title "The Consulate of the Sea", and in the 16th century was translated into the Castilian, the Italian, and the French language.

11The Wisby Sea Law ("Gotlandic or Wisby Water Recht") of the fifteenth century, a compilation of rules and principles of customary maritime law of different origin, and the Sea Law of the Hanseatic League of 1614, the powerful association of the major seaports at the North and Baltic Seas as well as major inland trading cities of those times, constitute further examples for the important role of maritime law as the forerunner in the progressive evolution of the historical Lex Mercatoria. Both drew heavily on the rules and principles contained in the Rôles d'Oléron. The Sea Law of the Hanseatic League was the culmination point of a long history of rule-making activities by its general assembly ("Hanserecesse") which began as early as 1365. These activities were first focussed on the town-laws of the major port cities like Hamburg and Lübeck, whose laws were influenced by the Lex Rhodia de iactu, and ended in the all-Hanseatic codification of 16144. The Hanseatic Sea Law was written by lawyers. Mainly for that reason and unlike all previous compilations which had been drafted by traders, the Law assumed the character of a first systematic codification of the law of the sea of those times.

12Some decades later, the Marine Ordinance ("grande ordonnance de la marine") of the French King Louis XIV ("Louis le Grand" or "Roi Soleil") was issued in August 1681. This code of maritime law stood in the tradition of the Rôles d'Olérons in that it provided that the admiralty ought to do justice according to the rights, judgments and usages of Oleron. The Ordinance was inspired by the maritime customs and statutes of the United Provinces of Amsterdam and Antwerp. It was collected and compiled under the authority of Jean Baptiste Colbert, the French minister of finance, as part of his comprehensive but unfulfilled plan for the nationalization and codification of all French law. Maritime customs of the sea which proved to be established at that time were revised in the Ordinance to suit the needs of mariners and merchants and were made part of the national law, enforceable in the French Admiralty Court. That Court was granted maritime jurisdiction to the exclusion of the old consular courts, whose judges had been elected by the mariners themselves. The Court was called upon to do justice summarily and by plain process according to the marine law and the ancient customs of the sea. The French Ordinance is an early example for the transformation of maritime customs and rules into state legislation, a development that later lead to the disappearance of the law merchant (No. 26 below).

13It was from a comparative survey of these early compilations of admirality law that Lord Mansfield, Chief Justice in the court of the English King's Bench and modernizer of English commercial law and the judicial system, in his famous decision Luke v Lyde of 17595 concluded that maritime law was not “the law of any particular country, but the general law of nations.” Due to the unity of their evolution as a single distinct and continuous body of maritime custom, he acknowledged the existence of a set of internationally recognized principles of admiralty law6, a lex mercatoria maritima. The existence of this "ius gentium of the sea" was acknowleged in modern times by the US Supreme Court and other US courts:

"Since the time of the Founding Fathers, federal courts sitting in admiralty jurisdiction have steadfastly continued to acquiesce in this jus gentium governing maritime affairs. Indeed, the Supreme Court has time and again admonished that ‘courts of this and other commercial nations have generally deferred to a non-national or international maritime law of impressive maturity and universality’. [. . .] This body of maritime law ‘has the force of law, not from extraterritorial reach of national laws, nor from abdication of its sovereign powers by any nation, but from acceptance by common consent of civilized communities of rules designed to foster amicable and workable commercial relations’. [. . .] Thus, when we say today that a case in admiralty is governed by the general maritime law, we speak through our own national sovereignty and thereby recognise and acquiesce in the time-honoured principles of the common law of the sea"7.

b. International Trade

14The general concept of the historical Law Merchant was first described by an anonymous author in the late thirteenth century as part of "Colford's Collection" ("Incipit Lex Mercatoria, que, quando, ubi, inter quos et de quibus sit") in the "Little Red Book of Bristol". Like the Red Books of other English cities, the Little Red Book of Bristol served as a register and book of record for matters, charters of privileges and other documents affecting the town and its trade gilds. It contains mainly entries from between the 14th and 15th century. In line with the almost exclusive emphasis on process and procedure in late thirteenth century English legal thinking, the treatise on the Lex Mercatoria in the Little Red Book was not concerned with the search for substantive principles and rules for mercantile transactions. Instead, it focussed exclusively on ways to evade inconvenient rules of common law in mercantile disputes. Its main focus was on the question as to how one could improve and expedite the procedure in specialized mercantile courts with merchants as judges, including the enforcement of judgements8 in order to reach a fair and equitable resolution of disputes between merchants.

15 The same emphasis on procedure and rules of evidence can also be found in the Fleta, a legal treatise published around 1290, during the reign of King Edward I (1239-1307) and in his Carta Mercatoria of 1303, a royal charter granted to foreign merchants trading in England. In the Carta, King Edward I ordered his officers to do "speedy justice...according to the Law Merchant". That same question was later discussed in the White Book of the City of London (Liber Albus) of 1419. The author concludes that disputes involving travelling merchants ("pepoudrous", derived from the French "pieds poudré", merchants whose feet were dusty from travel) should be decided from one day to the next ("de die in diem") even if the court was not in session9.

16In 1473, with respect to mercantile cases tried in the royal court of Star Chamber, an English court that sat at the Royal Palace of Westminster and was composed of Privy Councillors and common law judges, the Roman-law-trained Chancellor Robert Stillington asserted that alien merchants should be judged not according to the law of the land, but according to "the law of nature which by some is called the law merchant, which is law universal throughout the world”10. This claim was not followed by a more specific expression of general principle of mercantile law. Thus, in the decisions and regulations of the Civil Rota, a court specialized in mercantile established in the Italian city of Genoa in 1528 whose judgements in maritime cases were published in 1582 and 1603 under the title "Decisiones Rotae Genuensis", there are no references to lex mercatoria or ius mercatorum, but to mercantile customs and practices (consuetudo mercatorum).

17The first comprehensive treatise on the law merchant was the study "Tractatus de Mercatura" published in Venice in 1553 (with subsequent editions of the work being published also in Lyon and Cologne) by Benvenuto Stracca. That book, however, was a compilation of short treatises on various aspects of mercantile law from the perspective of the ius commune. It contained little coverage of substantive general legal principles.

18The topic of the historical Lex Mercatoria was later developed in great detail by the merchant Gerard de Malynes. He was born to a Flamish family in Antwerp and emigrated to London in the 1580s. As an assay master of the Royal Mint and member of several government commissions advising the English government on economic problems during the reigns of Elizabeth I and James I, he had already developed a thorough understanding of free trade and the theory of foreign exchanges. In his famous treatise "Consuetudo Vel Lex Mercatoria" published in 1622, Malynes argued that mercantile cases should be treated independently from the common law because he considered the law merchant to be a creation of the merchants themselves, derived from the nature of things, being similar to the law of nations (ius gentium), observed by the merchants "as a law" and to be of greater antiquity even than Roman law:

"And this Law of Merchants hitherto observed in all countries, ought in regard of commerce, to be esteemed and held in reputation as the Law of twelve Tables was amongst the Romanes. For herein you shall find every thing built upon the foundation of Reason and Justice..."11

19Malynes emphasized the similarities between the law merchant and maritime law, which he traced back to the Rhodian Sea Law, the Rôles d'Olérons and the collection of maritime rules of major cities like Marseille, Genoa, Venice and Barcelona, whose laws he considered to be "collected and existent until this day"12. As to these parallels, his description of proceedings in maritime cases strongly resembles the general process-oriented approach taken in such works as Colford's Collection centuries ago:

"All controversies and differences of Sea-faring Actions, or Maritime Causes, ought to be decided according to the Sea Lawes, which tooke their beginning from Customes and observations; and from them is the interpretation of the said Law to be taken: and if any Case shall fall out that was not knowne before, neither written downe and authorized as a Law, then the same is to be determined by the Judge, with the opinion of men of experience and knowledge  in the said sea-faring causes. And herein is all conuenient expedition required, that the matter may be summarily and briefly determined, especially in case of shipwracke; wherein delayes or protractions in Law, is a crueltie to vex such afflicted persons."13

20In light of these parallels it is not surprising that Malynes also pointed to the close connection between maritime law and the general commercial law. He observed that the body of the Lex Mercatoria is "made and framed of the Merchants Customes and the Sea-Lawes, which are involved together as the Seas and Earth". As to general mercantile practices of land trade, Malynes focussed in his treatise on "the three essentiall parts of trafficke", i.e. commodity, money and bills of exchange and in that context examined trade, insurance, banking, suretyship, letters of credit, factoring, bills of exchange, and agency for which certain widely recognized merchant practices seemed to have existed at that time and later spread across Europe. The law of cross-border sale was dealt with, albeit in no great detail, in the context of "buying and selling of Commodities". Malynes also focussed on means to resolve commercial disputes, in particular "by Arbitrators chosen and elected by both parties to end their differences with brevitie and expedition to avoid suits in law, which unto Merchants are inconvenient".14

21The lex mercatoria was also discussed by the diplomat, lawyer, judge and pioneer in the scientific treatment of commercial law, Johannes Marquardus in his book "Tractatus politico-juridicus de iure mercatorum et commerciorum" published in 166215. He focussed more on the elaboration of specific principles and rules found in mercantile transactions and ways to formalize them by drawing on civilian learning.

22The posthum edition of Blackstone's Commentaries on the Laws of England of 1809 put an end to the "romantic"16 view of the historical Lex Mercatoria and foreshadowed (see No. 26 below) the disappearance of the Lex Mercatoria in the codification age:

"...the expression ['lex mercatoria'] has frequently led merchants to suppose, that all their new fashions and devices immediately become the law of the land; a notion which, perhaps, has been too much encouraged by the courts. Merchants ought to take their law from the courts, and not the courts from the merchants; and when the law is found inconvenient for the purposes of extended commerce, application ought to be made to parliament for redress”.17

23The last publication of the pre-nation state age bearing the name "Lex Mercatoria" in its title was the sixth edition (published by Joseph Chitty) of Wyndham Beawes' "Lex Mercatoria or A Complete Code of Commercial Law being a General Guide to All Men in Business" of 1813, whose first edition had been published in 1752.

24In the US, the Supreme Court, in his landmark decision Swift v Tyson of 1842, did not follow the sceptical approach in the posthum edition of  Blackstone's Commentaries but referred to Lord Mansfield's famous reasoning in support of the existence of a transnational maritime law in Luke v Lyde18 to support the idea of a transnational commercial law. The judgement was written by Judge Joseph Story who himself had a strong affinity to the idea of a universal law merchant19. In Swift v Tyson, he applied the general principles of the law merchant as part of the federal commercial law20:

"Undoubtedly, the decisions of the local tribunals upon such subjects [like contracts or other instruments of a commercial nature such as negotiable instruments] are entitled to, and will receive, the most deliberate attention and respect of this court; but they cannot furnish positive rules, or conclusive authority, by which our own judgments are to be bound up and governed. The law respecting negotiable instruments may be truly declared in the languages of Cicero, adopted by Lord MANSFIELD in Luke v. Lyde, 2 Burr. 883, 887, to be in a great measure, not the law of a single country only, but of the commercial world. Non erit alia lex Romae, alia Athenis; alia nunc, alia posthac; sed et apud omnes gentes, et omni tempore una eademque lex obtinebit [There shall not be one law at Rome and another at Athens; one now and another afterwards; but one and the same law shall apply among all peoples and at every time]."

25Almost a century later, the US Supreme Court in Erie v Tompkins overruled its holding in Swift v Tyson in light of the fact that it had proved impossible to discover "a satisfactory line of demarcation between the province of general law and that of local law" and because of the "mischievous result" of increasing the opportunities for forum shopping available to litigants. In view of the Court, the US Constitution does not permit Congress to empower federal courts to create their own common law for cases that do not involve an issue of federal law.

c. Disappearance of the Historical Law Merchant

26Insofar as the ancient Lex Mercatoria did in fact exist, it disappeared during the nineteenth century. At that time, the idea of the nation state and issues of state-sovereignty that came along with it began to prevail over the concept of an independent "trans-national" commercial law.21. Consequently, the principles and rules of the medieval Lex Mercatoria were incorporated in the major European codifications of commercial law like the French Code de Commerce22 or the German Handelsgesetzbuch.

d. Features and Foundation Myths of the Historical Law Merchant

27To the extent that it did in fact exist - for example in the area of maritime law - the main features of the historical Lex Mercatoria as an independent body of legal rules were, a) that it did not originate from any particular legislator or rule-maker, and b) that it consisted of a more or less coherent system of principles and rules of procedural and substantive law. That system resulted from and took account of the "nature of the matter" (Natur der Sache), i.e. the  specific needs and risks of medieval cross-border sea trade as well as the practices and customs - with respect to both substance and procedure - prevailing in the ports and market-places of those days.23

28With respect to general commercial law, the same claim concerning the existence of a historical law merchant in the sense of uniform legal principles for cross-border commercial transations has been made for many decades24. In fact, it has been argued that "the dimension and commendable significance of the medieval mercantile community lies in the creation of its own law out of its own needs and its own views"25. The proponents of the New Lex Mercatoria see themselves in historical continuity to these claims.

29 It must be noted, however, that many of the supposed merchant rules were not uniform even across England, and on the continent the rules of fairs and markets varied even more26. The same applied to commercial customs27. Only very few and very general legal principles developed out of the purely process-oriented approach of the Middle Ages28. One was the principle that the giving of earnest ("God's penny", "denarius dei") became an instrument which bound both buyer and seller in a contract for sale, by putting the contract under devine protection. The principle was made binding on all merchants by an ordinance of King Edward I in 1303. That idea foreshadowed the fundamental legal principle of pacta sunt servanda. Other principles were the reciprocity of obligations and the non-discrimination of merchants from different localities.

30 However, it was generally agreed in the Middle Ages that the insistence on the application of general legal principles and formalities was to be avoided in commercial transactions and disputes, as most disputes between merchants ought to be decided expeditiously and ex aequo et bono, very often by special guild or fair courts. This willingness to depart from the application of strict law when dealing with merchants' transactions and disputes is in line with Baldus' theory of the aequitas doctrine of Roman law in the context of proceedings before mercantile courts, according to which formalities hindering the ordinary course of dealings between merchants and technical subtleties were not regarded as aequitas scripta29.

31The fact that, contrary to maritime law, no compilation of general principles of the law merchant existed until the mid 16th century is somewhat paradoxical given that without a common understanding as to the effects their transactions, the merchants of those days could not have been involved in cross-border commerce. It is therefore fair to assume that these merchants must have operated on the basis of expectations implicit in their general dealings, some of which were definite enough that they could be called "rules". These rules, however, were not judge-made law, but were largely generated in extrajudicial transactions and remained implicit in transactions that did not lead to disputes30. This phenomenon is revisited in modern times by the  proponents of legal pluralism who argue that contracts, in and of themselves, can be self-validating in that they have a law-making effect (below No. 36)

32To the extent that uniform principles and rules did not exist in certain areas of general commercial practice in the Middle Ages and in early modern times, the uncritical adoption of claims related to the existence of its historical counterpart by the proponents of the New Lex Mercatoria has been heavily critizised as the "tyranny of a construct"31. However, even when acknowledging that the medieval Lex Mercatoria is a myth, it is not without merit for the modern debate. It serves as the projection of an ideal rather than as an accurate reflection of Medieval reality. As such, it provides the theoretical starting point for the pragmatic conception of its modern counterpart:

"A foundation myth smacks of irrationality, but there is a rational counterpart: the medieval lex mercatoria as a thought experiment. To some extent, that seems to be what libertarians have in mind when they invoke a medieval lex mercatoria as a pure private governance. It is not intended as a description of how things actually were, but an imagination of how things could have been......The underlying idea is, presumably, one of globalization: If we want to create a law for globalization after the nation state, then we should look for models from the time before the nation state—the Middle Ages in particular."32

 

2. The New Lex Mercatoria

33The Lex Mercatoria was rediscovered in the 1960s by Berthold Goldman, Clive Schmitthoff and others. This development has its roots in the world economy before World War I, particularly in the standardization of contract clauses33 for sales and (maritime) transports. Goldman and Schmitthoff worked almost simultaneously on the revival of the idea of the medieval law merchant in Dijon and London respectively. However, they had different conceptions of the scope and legal quality of the transnationalisation of commercial law, especially with respect to the extent to which it is independent from domestic law. Goldman regarded the New Lex Mercatoria as a third, autonomous legal system besides domestic laws and public international law. For Schmitthoff, transnational law existed only within the confines of the principle of party autonomy which, for him, was a principle of domestic law34. In spite of these differences in their basic approach to the legal treatment of the New Lex Mercatoria, they shared the common conviction that a transnational body of legal principles and rules is gradually emerging from the spontaneous activities (usages, practices, use of model contracts and contract clauses etc.) of the international business community (Goldman) and the multiple activities of international formulating agencies in the harmonization and unification of international trade law (Schmitthoff)35.

34Today, transnational commercial law provides a vital means to meet the challenges of globalization36. Various phenomena contribute to the gradual evolution of a system of "a-national", i.e. transnational legal principles and rules: the increasing mobility of people, capital, commodities, information and communication across national frontiers and the resulting increased economic interconnectedness of states and regions across the globe, the erosion of traditional boundaries between national and international law, public and private law and politics and law, the decreasing significance of the sovereign state as "top-down" lawmaker37 for international business transactions, the corresponding increase of the significance of private "bottom-up" self-regulation ("private governance"38) by non-governmental formulating agencies such as the International Chamber of Commerce (ICC) and international businessmen themselves, the continuing use by these businessmen of standard forms and more or less identical or at least similar contract clauses (e.g. on "force majeure"), which are intended to cope with the specific risks involved in their cross-border transactions, and the global standardization and unification processes that result from these phenomena39. The specificity of these transnational principles and rules is their responsiveness to the legitimate market needs and practices arising out of the cross-border activities of businessmen across the globe.

35A catalyst for this development is the decision-making practice of international arbitral tribunals. Both Goldman40 and Schmitthoff41have acknowledged their significance for the evolution of transnational commercial law. In fact, international arbitrators have become the natural judges of international commerce. The success of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and of the UNCITRAL Model Law on International Commercial Arbitration reveals that today, international arbitral tribunals are accepted as "private courts" with a standing - firmly acknowledged by domestic courts, lawmakers and international formulating agencies alike - that equals that of domestic judges. Unlike these judges, however, international arbitrators frequently take a comparative approach to the decision of disputes arising out of international commercial transactions and very often refer to transnational rules or general principles of law42, be it to decide the case before them, be it to invest their decision, which is based on domestic law, with increased comparative persuasiveness vis-à-vis the parties to the dispute43.

36Apart from these practical issues, legal pluralism44 has provided the theoretical underpinnings for these developments, which evolve out of the realities of modern society and contemporary cross-border business and commerce. Unlike the traditional positivistic, highly formalistic and state-centered theory of legal sources, the proponents of legal pluralism accept that the theory of legal sources must take account of these developments. They acknowledge that the formation of the law is not an exclusive governmental (domestic law) or inter-state (international law) prerogative and that legal theory must not be trapped within the traditional 2x2 matrix created by the dualities of "public/private" and "domestic/international". Instead, and contrary to the traditional legal paradigm which focusses almost exclusively on the state, legal pluralism regards the multi-facetted ways of private rulemaking through the international business community, including the contract itself, as potential sources of law. For the pluralists, the new Lex Mercatoria is not disqualified as law, merely because it is not national45.

37A further indication for the increasing development and sophistication of the New Lex Mercatoria is the fact that industry-specific sub-systems of transnational law are alleged to exist today. In light of its great historical significance (see above Nos. 4-12), it is fair to assume that such a sub-system does in fact exist today for maritime trade ("lex maritima"46). However, that allegation has also been made for other industry sectors, such as construction ("lex constructionis"47), oil and gas ("lex petrolea"48) or more general the extractive industry ("lex extractiva"), for Cyberspace ("lex informatica"49) and for international banking and finance ("lex argentaria"). International sports events and the legal relationship between athletes and international sports organisations are said to be governed by their own transnational legal rules ("lex sportiva"). International commercial arbitration, the dispute resolution method of choice for international businessmen, is said to be governed by a "lex mercatoria processualis (arbitraris)" which has developed out of the merging of common and civil law traditions into a single global paradigm for a private and truly transnational adjudicatory process50.

 

II. The TransLex-Principles

1. Purpose

38While these transnational legal structures are being used to an increasing extent today in international contract and arbitration practice, there are still a number of obstacles in the way towards a greater acceptance of the New Lex Mercatoria. Some of these obstacles relate to legal theory and methodology, others to the practical work with this relatively new system of transnational law. With respect to the latter, a worldwide enquiry about the use of transnational law in international practice conducted by the Center for Transnational Law (CENTRAL) between 1998 and 2000 has revealed that the lack of knowledge about the contents of the New Lex Mercatoria is a major stumbling block on the way towards an increased acceptance of this concept51. In fact, it has been argued that rather than engaging in the endless debate on the theoretical viability of the Lex Mercatoria doctrine as an academic theory, "it is perhaps more useful to ask: what is this new law? What principles does it embody? What specific rules does it lay down? In short, what is its content?"52.

39The TransLex-Principles, whose history dates back to the year 1992, provide answers to these questions. For more than 130 principles and rules of transnational law, such as "pacta sunt servanda", "venire contra factum proprium", "duty to mitigate damages", "duty to pay interest", or "compensation for expropriation", the TransLex-Principles provide the user with both, their black letter text and comprehensive comparative references taken from international arbitral awards, domestic statutes and court decisions, international conventions, soft law instruments including international restatements of contract law, standard contract forms and contract clauses taken from international one-off contracts, trade practices and usages, and academic sources. A special role is played by case law and statutes from hybrid or mixed jurisdictions such as Quebec, Louisiana, South Africa, Scotland, Indonesia, Israel or India. They combine traditions of more than one legal system and operate as "veritable comparative-law laboratories in continuous operation"53. Another important role is plaid by the restatements of international contract law. By including them in their rich reservoir of comparative law references, the TransLex-Principles assume the role of a "Restatement of Restatements". All of these references are, as far as possible, reproduced in full text versions. For each principle or rule, a Commentary explains how they can be applied in practice and how they are connected with other TransLex-Principles. This latter function of the TransLex-Commentaries is particularly important, because it reveals that and how the New Lex Mercatoria is gradually developing into a genuine system of law.

The TransLex-Principles may be used for many purposes, for example as a means:

  1. to determine the applicable rules in a dispute if the parties have chosen "transnational commercial law", "general principles of law", "the lex mercatoria" or the like;
  2. to determine the applicable law, if, absent a choice of law by the parties, the arbitrators decide to apply this concept to the dispute before them;
  3. to allow for an autonomous interpretation of and for the filling of internal gaps in international conventions and other uniform law instruments54;
  4. to allow for the "internationally useful" construction of domestic law in international disputes;
  5. to ascertain the disputed meaning of key legal terms of transnational commerce, e.g. "force majeure", "hardship", "best efforts", "time is of the essence", "FOB", "CIF" etc.;
  6. to supplement or correct a future European Civil Code in international commercial disputes55;
  7. to provide legal know how about modern commercial law to developing and transition countries;
  8. to provide information about transnational law to other sciences (politics, economics, sociology) which are exploring the clash between the territorial limitations of the law and the transnationalisation of international commerce and trade in an era of globalization.

 

2. The Concept of the "Creeping Codification"

40The TransLex-Principles are based on the concept of the "Creeping Codification"56 of transnational law: a non-exhaustive, open list of principles and rules of the lex mercatoria that is constantly updated but never completed. This list-concept has met with approval in international legal practice:

"...it is evident that the idea of 'the list'...is as close as we've come, in recent generations, to tackling the lex and wrestling it into usable shape"57.

41Any attempt towards formal "codification" of the lex mercatoria may appear paradoxical, given that the high degree of informality and flexibility of international business out of which these principles and rules emerge as "law in action" appears incompatible with the permanence of a codification:

"...the new transnational lex mercatoria is likely to be of a dynamic nature, often expressed in practices that may change overnight if business logic or market forces so require. The search is therefore on for a forward-moving set of internationalized, uniform principles and rules that may be largely articulated by participants themselves and draws widely from their practical needs, established ways of dealing, best practices, trade organization rules, and from the innate rationality of their international dealings"58.

42However, in the context of transnational law, "codification" does not and cannot mean formalized lawmaking by a sovereign legislature as in the traditional, positivistic model of top-down sovereign rulemaking. In transnational business, a single legislature or rule maker does not exist. Rather, the notion of codification relates to the formulation of these principles and rules in black letter texts and the reproduction of the comparative law materials evidencing a particular principle or rule. This approach to the codification of transnational law serves three specific purposes:

  • the formulation of rules and principles in black letter text allows users to apply the New Lex Mercatoria in legal practice;
  • the reproduction of comparative law references for each principle or rule helps to save time and money that must be invested in comparative research required to determine the contents of transnational law59;
  • displaying relevant materials in full-text versions immediately below the black letter text of each principle and rule allows users to make their own judgement about the comparative persuasiveness of these sources.

43The TransLex-Principles therefore merely establish a presumption that the principles and rules reproduced in the list form part of the lex mercatoria. With this approach, the TransLex-Principles stand in the tradition of the Digests of common law published in the first half of the 20th century. What was stated by Edward Jenks in the Preface of his "A Digest of English Civil Law" of 1921 applies with equal justification to the TransLex-Principles:

"A Digest differs from a Code, mainly in that it professes merely to state the rules which are covered by existing authority. It claims - at least, when it is the work of purely private authors - no other respect than that which is derived from a belief that it represents an honest, intelligent, and industrious attempt to reduce the chaos of existing materials to simplicity and order.

[...]

The chief intellectual effort demanded of the authors of the work has been to extract, by appropriate treatment, from this formless heap of statutes and judicial decisions, the rules which such authorities enunciate and expound, and to arrange those rules in the most convenient and accessible form."60

44In the modern world, the idea of the persuasive force of a compilation of legal principles, definitions and rules, derived from comparative research, has been adopted by a number of influential working groups operating at a global or regional level. The "UNIDROIT Principles of International Commercial Contracts (UPICC)" and the "Lando Principles on European Contract Law (PECL)" are the most prominent results of these efforts. More recently, this approach was adopted by the Study Group on a European Civil Code and the Research Group on Existing EC Private Law ("Acquis Group").61

45The Common Frame of Reference (CFR) drafted by the Group has been characterized as a "non-legislative codification of European private law" and as a "codification-like system of legal norms with immediate application".62 This terminology is ultimate proof of the fact that today, the notion of "codification" has acquired a new meaning, which goes well beyond the traditional view of legislation by the nation-state, and extends to modern instruments of private governance. Their value - or persuasive authority - as a means to "codify" the law depends solely on the acceptance of those who use them:

"...the abstract authority of a text giving expression to a legal norm consists in the legal profession accepting it as an ultimate source of the law, without requiring further legal reasons to do so...

More specifically, the relative authority of a legal text consists in its formal weight in legal argument, where different legal authorities are present and may be in conflict with each other. In such a case, decisions must be made, usually independently of the content of the individual norms in question, as to which of those texts should be taken as the ultimate foundation of legal argument. These decisions depend on, and are an expression of, the texts' authority. Indeed, it would be wrong to assume that the legal authority would be a kind of mysterious quality of a text. Rather, authority is assigned to legal texts by those working with them, i.e. by professional lawyers applying and interpreting such texts in the course of legal argument."63

46This broader notion of the term "codification" has now also found its way into the decision-making of international arbitral tribunals:

"...the issues in dispute between the parties should primarily be based not on the law of any particular jurisdiction, but on such rules of law that have found their way into international codifications...that enjoy a widespread recognition...The UNIDROIT rules [offer] a protection for contracting parties that adequately reflects the basic principles of commercial relations..."64

47 The relaxation or de-formalization of the traditional, narrow and top-down notion of codification also serves to alleviate concerns raised by Emmanuel Gaillard and Roy Goode against any attempt to codify transnational commercial law. According to them, the drafting of abstract lists of principles and rules of the New Lex Mercatoria is irreconcilable with the true nature of this legal mass. They argue that because the New Lex Mercatoria cannot be qualified as a legal system, its content cannot be derived from abstract lists which are set up without connection to a specific case or legal problem. Rather, these rules and principles must be extrapolated in each individual case, for example in an international arbitration, from the relevant domestic legal systems by application of comparative law methodology and in full knowledge of the factual circumstances of the case and the interests of the parties involved.65

48 At first sight, these concerns seem to be justified insofar as the principles and rules of the New Lex Mercatoria do not and cannot constitute a non-state world law of the same hierarchical, well ordered character as national laws of old. However, the broad meaning of the notion of codification in the field of transnational commercial law is able to capture law with only a minimum degree of systemization. Also, these views overlook the unsurmountable law-finding problems that are connected with the application of the New Lex Mercatoria in the absence of such a codification:

“The arbitrator would … face a formidable task of comparative research. Instead of having to consult, after application of the appropriate rule of conflict of laws, the rules of one single – no more – national system of law, he would have to assume the role of a full-fledged comparatist in charge of a research into perhaps a multitude of different national jurisdictions whose rules might be phrased in a language of which he is not in command. There might be fields of law, it is true, where such comparative research would have already been done, where a specific rule would therefore be easily detectable or where arbitral awards would have already flattened some paths in the jungle of the different national laws to be consulted. But an unforeseeable number of legal questions for which such research has never been carried out, would still have to be answered by arbitrators who, despite their often unusually extensive experience with foreign and international laws, would mostly be ill equipped to perform this kind of a more academic function".66  

  49 Against this background, the TransLex-Principles serve the pragmatic purpose of a unique, freely accessible online-resource intended to bridge the gap between theory and practice by making the New Lex Mercatoria both visible and useable in everyday contract and arbitration practice.

_______________________________________

Footnotes

1) Zimmermann, The Law of Obligations, Roman Foundations of the Civilian Tradition, 1990, 407 et seq.

2) Ward, The World of the Medieval Shipmaster: Law, Business and the Sea, c.1350-c.1450, 2009, 20.

3) Ward, The World of the Medieval Shipmaster: Law, Business and the Sea, c.1350-c.1450, 2009, 23.

4) See Cordes, Lex Maritima? Local, regional and universal maritime law in the Middle Ages, in: Blockmans/Krom/Wubs-Mrozewicz (ed.) The Routledge Handbook of Maritime Trade around Europe 1300-1600, 2017, 69, 81 et seq.

5) Luke v Lyde, 2 Burr (1759) 882, 97 ER 614 (KB); see Cordes, The search for a medieval Lex mercatoria, Oxford University Comparative Law Forum 2003, 5 et seq.

6) Murphy, Luke v Lyde - An Analysis, Auckland University Law Review 2003, 2.

7) US Supreme Court Sosa v. Alvarez-Machain, 542 US 692, 715 (2004) with reference to Blackstone; see also R.M.S. Titanic Inc. v. Haver, 171 F. 3rd. 943, 961 (4th Cir. 1999): "The body of admiralty law....did not depend on any express or implied legislative action. Its existence, rather, preceded the adoption of the Constitution. It was the well-known and well-developed 'venerable law of the sea' which arose from the custom among 'seafaring men,'... and which enjoyed 'international comity,' ... Nations have applied this body of maritime law for 3,000 years or more. Although it would add little to recount the full history here, we note that codifications of the maritime law have been preserved from ancient Rhodes (900 B.C.E.), Rome (Justinian's Corpus Juris Civilis) (533 C.E.), City of Trani (Italy) (1063), England (the Law of Oleron) (1189), the Hanse Towns or Hanseatic League (1597), and France (1681), all articulating similar principles. And they all constitute a part of the continuing maritime tradition of the law of nations — the jus gentium"; see also Delovio v Boit, 7 Fed Cas. 418 (No. 3776) (CC Mass 1815); Daniel Harmer v William Errington Bell and Others, "The Bold Buccleugh" (1850/51) 13 E.R 884, 7 Moo P.C. 267; van Hooydonk, Towards a worldwide restatement of the general principles of maritime law, The Journal of International Maritime Law 2014, 170 et seq.

8) Isaacs, The Merchant and His Law, Journal of Political Economy, Vol. 23, No. 6 (Jun., 1915), at 536: "Before the judges of the common law the merchants were compelled to set out and prove their customs in each case as matters of fact not recognized as part of the law of the land nor dignified by judicial notice. In these courts the merchants must have felt decidedly like fishes out of water. They had been accustomed to speedy justice. Coke, however faulty his etymology may be, pictures the court of piepowder as dispensing justice as quickly as dust falls from the foot. In the ordinary courts of common law 'the law's delay' had already won its place among the recognized ills of this life."

9) See Cordes, Lex Mercatoria, Handwörterbuch zur deutschen Rechtsgeschichte (HRG), 2.ed., 2004 and onwards, Columns 890-902.

10) Anon. v. Sheriff of London, Y.B. 13 Edw. 2, fol. 9, Pasch, pl. 5 (Ch. 1473); Basile/Bestor/Coquillette, Lex mercatoria and Legal Pluralism: A Late Thirteenth-Century Treatise and Its Afterlife, 1998, 128 et seq.

11) Malynes, Consuetudo Vel Lex Mercatoria Or The Ancient Law-Merchant, 1622, p. 8.

12) Malynes, Consuetudo Vel Lex Mercatoria Or The Ancient Law-Merchant, 1622, 120.

13) Malynes, Consuetudo Vel Lex Mercatoria Or The Ancient Law-Merchant, 1622, 121.

14) Malynes, Consuetudo Vel Lex Mercatoria Or The Ancient Law-Merchant, 1622, 443, see also id, 447 et seq. ("Of Arbitrators and their Awards").

15) Marquardus, Tractatus politico-juridicus de jure mercatorum et commerciorum singulari: in quo ex jure divino, publico & privato, communi, civili, canonico, feudali, & Saxonico nec non variorum juris interpretum commentariis ac consiliis ... ut & philosophorum & historicum classicorum axiomatibus, exemplis atque monitis politicis jura commerciorum singularia IV libris secundùm tria juris objecta summatim collecta, exposita & illustrata sunt, Frankfurt 1662.

16) See Kerr, The Origin and Development of the Law Merchant, Virginia Law Review 1929, 350: "The Law Merchant furnishes the legal science its most romantic branch"; see also Bewes, The Romance of the Law Merchant: Being an Introduction to the Study of International and Commercial Law: with Some Account of the Commerce and Fairs of the Middle Ages, 1923.

17) Blackstone, Commentaries on the Laws of England, Vol. I, 15th posthum ed., 1809, 75, note 8 (note added to the original work by the editor of the posthum edition, Edward Christian; click here for the 1775 edition without that footnote).

18) See text at footnotes 2, 3.

19) See for Story's changing view of the Lex Mercatoria Coquillette, "Mourning Venice and Genoa": Joseph Story, Legal Education and the Lex Mercatoria, in: Piergiovanni (ed.) From lex mercatoria to commercial law, 2005, 11 et seq.

20) Swift v Tyson, 16 Pet. 1, 10 Led. 865 (1842), arguing on the technical question before the court: "And why, upon principle, should not a pre-existing debt be deemed such a valuable consideration? It is for the benefit and convenience of the commercial world, to give as wide an extent as practicable to the credit and circulation of negotiable paper, that it may pass not only as security for new purchases and advances, made upon the transfer thereof, but also in payment of, and as security for, pre-existing debts."

21) See Blackstone, Commentaries on the Laws of England, Vol. I, 15th posthum ed., 1809, 75, stating that the lex mercatoria "however different from the general rules of the common law, is yet integrated into it, and made a part of it"; see also Schmitthoff, in: Schmitthoff (ed.), The Sources of the Law of International Trade, 1964, at 37: “When we compare the modern law of international trade … with the medieval lex mercatoria, we notice that the modern development has one great drawback....: the drawback is that the modern law of international trade has to overcome the barriers created by the relatively modern concept of the national state which originated a legal order of numerous municipal systems....”.

22) See, e.g. Ferrante, Codification and the Lex mercatoria: the maritime law of the second book of the Code de commerce (1808), in: Piergiovanni (ed.) From lex mercatoria to commercial law, 2005, 121 et seq.

23) Wolaver, The Historical Background of Commercial Arbitration, 83 U. Pa. L. Rev. 132, 144 (1934): "A typical expression from the early books is the following from Malynes: 'Merchant affairs in controversy ought with all brevity to be decided to avoid interruption of the traffick.' Traders always thought of the common law as something beyond their experience. It was local, not general, custom, and its processes were slow and formal. It is perfectly certain the merchant had a great need of rule and law, but it was rule and law in the market and as he and his kind knew and practiced it. It was not deduction from cases; it was self-generative from transactions themselves. He ordinarily found it possible to operate his affairs without controversy or aid of lawyers or courts, but should he find himself at odds with someone in the course of trade, he had an all-complete system of law to direct the settlement."

24) Holdsworth, A History of English Law, 7th ed. rev. 1956, 66, emphasizing the "cosmopolitan character of the Law Merchant"; Wieacker, Historische Bedingungen und Paradigmen supranationaler Privatrechtsordnungen, in: Bernstein/Drobnig/Kötz (eds.) Festschrift für Konrad Zweigert zum 70. Geburtstag, 1981, 575 et seq; Horn, Festschrift Karsten Schmidt, 2009, 705, 710 et seq; Trakman, The Law Merchant: The Evolution of Commercial Law, 1983, at 9; Trakman, The Twenty-First-Century Law Merchant, American Business Law Journal 2011, 775 et seq; Berman, Law and Revolution.The Formation of the Western Legal Tradition, 1983, 55, arguing that in the late 11th and 12th century "the basic concepts and institutions of modern western mercantile law – Lex mercatoria, 'the law merchant' – were formed, and even more important, it was then that mercantile law in the west first came to be viewed as an integrated, developing system– a body of law"; Benson, The Spontaneous Evolution of Commercial Law, Southern Econ. J. 1989,  644, 647, 650: “[v]irtually every aspect of commercial transactions in Europe was governed for several centuries by this privately produced, privately adjudicated and privately enforced body of law".

25) Levin Goldschmidt, Handbuch des Handelsrechts, 30rd ed. Vol. 1 (Universalgeschichte des Handelsrechts), 1891, 142 (translation from German).

26) See Cordes, The search for a medieval Lex mercatoria, Oxford University Comparative Law Forum 2003, 5 et seq: "To sum it up: in the Middle Ages, the term 'Lex mercatoria' is used in the context of advantages and privileges granted to merchants in the field of civil litigation. This is quite different from the modern sense of a system of substantive trade law that cannot be traced back any further than to the seventeenth century"; Sachs, From St. Yves to Cyberspace: The Modern Distortion of the Medieval 'Law Merchant', Am.Univ.Int'l.L.Rev. 2006, 685, 806; see also Kadens, The Medieval Law Merchant: The Tyranny of a Construct, Journal of Legal Analysis 2015: "Indeed, mandating that the merchants be governed by a substantive law merchant would seem to fly in the face of the ordinances of the mayors of some of the important staples. These ordinances so heavily regulated the substantive aspects of the sale of goods, including price, quality, and terms of sale and payment, that little would have been left for a substantive law merchant to control"; Baker, The Law Merchant and the Common Law, 38 CLJ (1979) p. 295, 299: "it is far from clear that this law merchant was conceived of as a distinct body of substantive law"; Sachs, The 'Law Merchant' and the Fair Court of St. Ives 1270-1324, 2 et seq; Foster, Foundation Myth as legal formant: The medieval Law Merchant and the new Lex Mercatoria, forum historiae iuris; Bart, La Lex Mercatoria au Moyen-Age: mythe ou réalité?, in: Leben/Loquin/Salem (eds.) Souveraineté Étatique et Marchés Internationaux à la Fin du 20ème Siècle - Mélanges en l'honneur de Philippe Kahn, 2000, 18; Coing, Europäisches Privatrecht, Vol. I, Älteres Gemeines Recht (1500-1800), 1985, 519; Volckart/Mangels, Are the roots of the modern Lex Mercatoria really medieval? Southern Economic Journal, 1999, 427 et seq.

27) Kadens, Lessons from the History of Customs, Texas International Law Journal 2013, 349, 354: "...it often happens that in one single region, the parties rely on contrary customs and sometimes customs are silent and vary at will..."; see also id., referring to GLOSSA ORDINARIA to Cod. 8.52(53).1 ad v. controversarium from which it follows that the jurists of those days even included this issue as a common question in their teaching: "What custom do you follow if the custom is X in the town of the plaintiff, Y in the town of the defendant, and Z in the town of the judge?".

28) Sachs, From St. Yves to Cyberspace: The Modern Distortion of the Medieval 'Law Merchant', Am.Univ.Int'l.l.Rev. 2006, 685, 730 et seq for the case law of the fair courts of St. Yves.

29) Horn, Aequitas in den Lehren des Baldus, 1968, 90 et seq.

30) Basile/Bestor/Coquillette, Lex mercatoria and Legal Pluralism: A Late Thirteenth-Century Treatise and Its Afterlife, 1998, 181.

31) "Historians have for decades now been sounding the warning that the law merchant emperor has no clothes, but to little avail... True, scholars writing about private ordering do sometimes cite these historical studies. In the middle of discussing the existence of the medieval law merchant, they drop a footnote to historical works to the contrary as providing 'other perspectives'.... Yet following this apparently obligatory nod to the opposition, the authors continue with their discussion of the law merchant as if no challenge to the accepted construct could be seriously entertained" (refrences omitted).

32) Michaels, Legal Medievalism in Lex Mercatoria Scholarship, Texas Law Review 2012, 259, 264 and 265; see also id, 267: "It may seem obvious that such an imaginary Middle Ages, and an imaginary lex mercatoria, need to be rejected because of their ideological potential. I am not fully convinced. It is worth pointing out that legal positivism equally rests on mythical foundations, as does the ideal of the state, on which so much current legal thinking rests. The problem is not, it seems to me, dreaming per se. The problem begins...once these dreams are taken as reason, and as direct models for our present problems"; see also Trakman, The Law Merchant: The Evolution of Commercial Law 1983, p. 17, hinting at the historical Lex Mercatoria's potential usefulness as a “model for innovation”.

33) See, e.g. Großmann-Doerth, Der Jurist und das autonome Recht des Welthandels, JW 1929, 3447 et seq; Rabel, Das Recht des Warenkaufs I, 1936; Raiser, Das Recht der Allgemeinen Geschäftsbedingungen, 1935, 63, asking the question whether contracting parties, by using standard terms, may "regulate their dealings without intermediation by a domestic legal system, thereby setting law among themselves" (translation from German); Horn, in: Horn/Schmitthoff (eds.) The Transnational Law of International Commercial Transactions, 1982, 3, 16; but see id, 76 where Horn vigorously rejects such ideas and argues that accepting private orders created by standard terms as a source of law would mean "an inadmissible commingling of legal sociology and legal dogmatics" (translation from German) because it is always a rule of domestic law which leads to the binding character of such orders but such orders may not become binding in and of themselves, i.e. without acknowledgement by a domestic legal system.

34) See, e.g. Wulfert-Markert, Clive Schmitthoffs Konzeption eines transnationalen Welthandelsrechts, 2018, 149: "In Schmitthoff's conception the lex mercatoria derives its autonomy ultimately from the individual states." (Translation from the German orginal).

35) For a discussion of Schmitthoff's and Goldman's views of the New Lex Mercatoria see Toth, The Lex Mercatoria in Theory and Practice, 2017, 32 et seq. (Schmitthoff) and p. 39 et seq. (Goldman).

36) See Dalhuisen, Globalisation and the Transnationalisation of Commercial and Financial Law, Rutgers L. J. 2013, 20: "Rather (but also no more than as a model), legal transnationalisation might best be seen as concerning law formation in a different legal order than that of states, which are only one type of legal order, with the special feature that it is territorially confined. Especially to the extent globalisation is becoming an autonomous process, the emergence of a separate new legal order presents itself at least in business. That is the transnational commercial and financial legal order and the modern lex mercatoria with its different legal sources is then the private law of that order."

37) See Hobbes, Leviathan Or the Matter, Forme and Power of a Commonwealth Ecclesiastical and Civil, 1651, 137: "[I]t is manifest, that law in generall, is not Counsell, but Command; nor a Command of any man to any man; but only of him, whose Command is addressed to one formerly obliged to obey him"; see also the landmark decision of the US Supreme Court which put an end to the development of the general federal common law Erie R. Co. v Tompkins, 304 US 64 (1938): "[L]aw in the sense in which courts speak of it today does not exist without some definite authority behind it...The authority and only authority is the State, and if that be so, the voice adopted by the State as its own (whether it be of its legislator or its Supreme Court) should utter the last word".

38) See generally Braithwaite/Drahos, Global Business Regulation, 2000; Ronit/Schneider, Global Governance through Private Organizations, Governance 1999, 243.

39) Berger, Rechtliche Rahmenbedingungen der Globalisierung - vom Wettbewerb der Rechtsordnungen zu "Private Governance", in: Bierbaum (ed.), So investiert die Welt, 2007, 33 et seq.; Jansen, Nils/Michaels, Ralf, Private Law and the State, Comparative Perceptions and Historical Observations, RabelsZ 71 (2007), 345 et seq.; Michaels, Ralf/Jansen, Nils, Private Law beyond the State? Europeanization, Globalization, Privatization, 54 Am. J. Comp. L. (2006), 843, 868 et seq.; Köndgen, Privatisierung des Rechts - Private Governance zwischen Deregulierung und Rekonstitutionalisierung, AcP 206 (2006), 477 et seq.; Caruso, Private Law and State-Making in the Age of Globalization, 38 N.Y.U.J.Int'l.L.& Pol., 1 et seq. (2006); see generally van Creveld, The Rise and Decline of the State, 1999, 336 et seq.

40) See Goldman, Frontières du droit et “lex mercatoria”, Archives de philosophie du droit 1964, 181,183: “Charged with the decision of disputes of international commerce, the arbitrators…when they refer to specific norms having their roots in the contract …. (model contracts, codified usages,...) cannot always limit themselves with that reference: a background of general principles is often indispensable for them, even if they do not always refer to it explicitly. Experience shows that often they do not search [for a solution] in a domestic legal system or an international convention, but in a ‘customary law’ of international trade – lex mercatoria – of which it is useless to determine whether they discover or develop it, because both approaches are intimately intertwined, as in any case in which a judge performs such an activity” (translation from French).

41) Schmitthoff, International Trade Usages, 1987, No. 71: "Substantive law is often born in the womb of procedure. In keeping with their international character, the law which these international arbitral bodies create is transnational. It is the new lex mercatoria".

42) See for the origin, evolution and application by international tribunals of general principles of law Cheng, General Principles of Law as Applied by International Courts and Tribunals, 1953 (reprinted 2006); Hersch Lauterpacht, International Law, Collected Papers, General Works, 1970, p. 75; Kotuby/Sobota, General Principles of Law and International Due Process, 2017, 3 et seq; Berger, General Principles of Law in International Commercial Arbitration, How to Find Them - How to Apply Them, World Arbitration & Mediation Rev. 2011, 97, 103 et seq.

43) Cf. Horn, Festschrift für Karsten Schmidt, 2009, 705, 721; Karton, The Culture of International Arbitration and the Evolution of Contract Law, 2013, p. 239: „In sum, international commercial arbitrators have an ideological and a material incentive to aid in the development of a global commercial law. As one tribunal put it: "Arbitral awards gradually develop a body of case law that reflects economic realities and complies with the needs of international trade“. The author refers to ICC Award 4131, Clunet 1982, 899 (English translation of the author).

44) See generally Merry, Legal Pluralism, Law Society Rev. 1988, 869 et seq; Griffiths, What is Legal Pluralism?, Journal of Legal Pluralism 1986, at 1 et seq.; Teubner, Globale Bukowina: Zur Emergenz eines transnationalen Rechtspluralismus, Rechtshistorisches Journal 1996, 255 et seq.; Maurer, Lex Maritima, 2012, 85 et seq.

45) For a discussion of the role of legal pluralism in the Lex Mercatoria context and the importance of "recognition" of the Lex Mercatoria Toth, The Lex Mercatoria in Theory and Practice, 2017, 23 et seq., 92 et seq., 178 et seq., 252 et seq; see also for the connection between Lex Mercatoria and legal pluralism Calliess/Zumbansen, Rough Consensus and Running Code, A Theory of Transnational Private Law, 2010, 28 et seq.

46) See Maurer, Lex Maritima, 2012, 11 et seq.

47) See Molineaux, Moving Toward a Construction Lex Mercatoria - A Lex Constructionis, J.Int'l.Arb. 1997, 55 et seq.

48) See, e.g. Bishop, International Arbitration of Petroleum Disputes: The Development of a Lex Petrolea, Yearbook Commercial Arbitration XXIII (1997), 1131 et seq; Childs, Update on Lex Petrolea: The Continuing Development of Customary Law Relating to International Oil and Gas Exploration and Production, Journal of World Energy Law and Business 2011, 214 et seq.; Martin, Lex Petrolea in the International Oil and Gas Industry, in: King (ed.) Dispute Resolution in the Energy Sector: A Practitioner's Handbook, 2012, 95 et seq; Talus/Looper/Otillar, Lex Petrolea and Internationalization of Petroleum Agreements: Focus on Host Government Contracts, Journal of World Energy Law and Business 2012, 181 et seq; Talus, Oil and gas: International petroleum regulation, in: Morgera/Kulovesi (eds.) Research Handbook on International Law and Natural Resources, 2016, 243, 256 et seq.

49) See for the evolution of a Lex Informatica as a "Law Merchant of Cyberspace", a complex and autonomous source of information policy rules for the access, distribution and use of digital data and information (e.g. content restrictions, treatment of personal information, protection of intellectual property) in global networks which are embedded in system architecture, network design and standards and are intended to provide stability and predictability so that the participants ("netizens") have enough confidence for their communities to thrive, just as settled trading rules gave confidence and vitality to merchant communities who found national laws incapable of dealing with the changing needs of their trade transactions, while at the same time inducing domestic policy makers to use strategies and mechanisms for the development of information policy rules which are different from traditional regulatory approaches Reidenberg, Texas L. Rev 1998, 553 et seq; see also for the idea of the "Code of Cyberspace", i.e. software and hardware "which make cyberspace what it is and also regulate cyberspace as it is" ("code is law") Lessig, Code, Version 2.0, 2006, 5.

50) Draetta, The Transnational Procedural Rules for Arbitration and the Risks of Overregulation and Bureaucratization, ASA Bulletin, 2015, 327, 329; Marrella, Regolamenti arbitrali e formazione di una lex mercatoria processualis, in: Galgano (ed.), Trattato di diritto commerciale e di diritto pubblico dell'economia, Vol. XX, 2003, at 579 et seq; Nottage, The Procedural Lex Mercatoria: The Past, Present and Future of International Commercial Arbitration, Sydney Law School Research Paper No. 06/51; Schroeder, Die lex mercatoria arbitralis, Strukturelle Transnationalität und transnationale Rechtsstrukturen im Recht der internationalen Schiedsgerichtsbarkeit, 2007.

51) See the statement of an international practitioner, reprinted at Berger (ed.), The Practice of Transnational Law, 2001, at 111: "Negotiating with another party by invoking these principles [of transnational commercial law] requires that the other party is as well assisted by somebody who is aware of these principles and knows how to handle them. This is not always the case".

52) Partasides/Blackaby, in: Redfern and Hunter on International Arbitration, 5th ed. 2015, No. 3.166.

53) Comment from Symeon Symeonides on Palmer/Reid (eds), Mixed jurisdictions compared: private law in Louisiana and Scotland (2009); see also Farran/Örücü/Donlan, A Study on Mixed Legel Systems: Endangered, Entrenched or Blended, 2014.

54) See Kronke, Unif.L.Rev. 2000, 13, 18: "Some of the road ahead [of mitigating the effects of the specific and fragmentary character of international conventions] may be covered by 'creeping' unification ...".

55) See Lando, in Scandinavian Studies in Law 2000, 343, 401.

56) See Berger, The Creeping Codification of the Lex Mercatoria, 2nd ed 2010, 250 et seq.

57) Fortier, Arbitration International 2001, 121, 127 (= ICSID Rev.-FILJ 2001, at 10, 18); see also Molineaux, J.Int'l.Arb. No. 1, 2000, 147, 150: "...the list looks forward and provides an incentive for the future evolution of transnational commercial law as an open legal system ... There can be no doubt that this is a list which will become a sine qua non reference..."; Partasides/Blackaby, in: Redfern and Hunter on International Arbitration, 6th ed. 2015, No. 3.168; Pryles, Mealey's Int'l.Arb.Rep., February 2003, 21, 25 et seq.; see for the case law of the Iran-US Claims Tribunal Brunetti, Arbitration International 2002, 355 et seq. surveying the Tribunal's jurisprudence relating to selected rules of the TLDB, the precursor of TransLex.

58) Dalhuisen, Legal Orders and their Manifestation: The Operation of the International Commercial and Financial Order and Its Lex Mercatoria, Berkeley J.Int'l.L. 2006, 129, 133; see also Berger, in: Hartkamp/Hesselink/Hondius et al. (eds.), Towards a European Civil Code, 3rd ed. 2004, 43, 53 et seq.; Herber, Internationales Handelsrecht (IHR) 2003, 1, 5; Wasserstein Fassberg, Lex Mercatoria - Hoist with its own Petard?, Chicago Journal of International Law 2004, 67, 82: "This push towards formalised codification...requires lex mercatoria theorists to relax the qualifications for membership and compromise its autonomy in a way which ultimately belies the standard justification offered for its existence - the more formal and explicit the rules, the less organic, the less spontaneous, the less authentic they are"; see also Michaels, Privatautonomie und Privatkodifikation, Zur Anwendbarkeit und Geltung allgemeiner Vertragsrechtsprinzipien, RabelsZ 62 (1998) 580, 617.

59) See the Statement of the Sole Arbitrator in ICC Award No. 5953, Clunet 1990, 1056, 1059: "As far as the general principles of international business are concerned, their list cannot be found in a single textbook" (translation from French).

60) See Jenks (ed.), A Digest of English Civil Law, London 1921, iii et seq.; see also Kersley/Broom, A Selection of Legal Maxims, 10th ed. 1939, v: "If, then, it be true that a knowledge of first principles is at least as essential in Law as in other sciences, certainly in none is a knowledge of those principles, unaccompanied by a sufficient investigation of their bearing and practical application, more likely to lead into grievous error." For a recent digest containing 1,000 principles on transnational law see Domingo/Ortega/Rogríguez-Antolin/Zambrana, Principios de Derecho Global, 2nd ed. 2006, 31 et seq.

61) In the introduction to the "Draft Common Frame of Reference" (DCFR), which was published in early 2008, the drafters state: "The drafters of the DCFR nurture the hope that it will be seen...as a text from which inspiration can be gained for suitable solutions for private law questions...If the content of the DFCR convinces, it may contribute to a harmonious and informal Europeanisation of private law", see von Bar/Clive/Schulte-Nölke et al (eds.), Principles, Definitions and Model Rules of Eurpean Private Law, Draft Common Frame of Reference (DCFR), Interim Outline Edition, 2008, 7 et seq.; see also Schulze, in: Schulze (ed.), The Common Frame of Reference and Existing EC Contract Law, 2008, 3 et seq.

62) Jansen/Zimmermann, Was ist und wozu der DCFR?, NJW 2009, 3401, 3406 (emphasis added).

63) Jansen, The Making of Legal Authority, 2010, 43 et seq., concluding that "non-legislative reference texts may gain similar or even greater authority than legislative codifications" and complaining that so far "legal scholars [in analysing factors determining "legal authority" of such texts] have mostly focused on factors of pure legal rationality", id. 138 and 141.

64) SCC Award No. 117/1999.

65) Gaillard, Thirty years of lex mercatoria: towards the discriminating application of transnational rules, in: van den Berg (ed.), Planning efficient arbitration proceedings/The law applicable in international arbitration, ICC congress, ser. No. 7, 1996, 570, 583 (reprinted in ICSID Rev.-FILJ 1995, 208 et seq; French version in Clunet 1995, 5); Gaillard, Transnational Law. A Legal System or a Method of Decision-Making?, in: Berger (ed.), The Practice of Transnational Law, 2001, 53, 56 et seq; Goode, Practice and Pragmatism in Transnational Commercial Law, ICLQ 2005, 539, 552.

66) Sandrock, How much Freedom Should an International Arbitrator Enjoy? – The Desire for Freedom from Law v. the Promotion of International Arbitration, 3 Am.Rev.Int’l Arb. 1992, 30, 50 et seq.; see also Lalive, L’Arbitrage International et les Principes Unidroit, in: Bonell/Bonelli (eds.), Contratti commerciali internazionali e Principi Unidroit, 1997, 71, 84.

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