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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 ]

Introduction


1The historical Lex Mercatoria (I.1.), including the myths and misunderstandings connected with its putative existence, and its rediscovery in modern times by Clive Schmitthoff and Berthold Goldman (I.2.) are analysed in detail in this text. It also explains the conceptual and methodical foundation as well as fields for practical application of the TransLex-Principles, a systematic online-codification of over 140 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 in general commercial transactions (b.).

a. Admiralty

4Admiralty provides the most prominent and oldest example for the evolution of uniform practices and customes and the ensuing development of legal principles in cross-border maritime trade. By its very nature, long-distance sea transport has always required its own "supraterritorial" rule-making based on the special routines, traditions and needs of mariners, freighters, charterers, ship-owners and merchants involved in overseas trade:

"The Law of the Sea has been from the earliest times exceptional to the Law of the Land. No nation has ever claimed to exercise jurisdiction over the open see on the ground of exclusive possession. The sea has thus been exempt from legislation in the sense of the word, in which it is said to impose upon a subject the will. On the other hand, the sea has been used from time immemorial by the vessels of all nations, in the absence of a commom superior, on terms of equality, without let or hindrance from one another, or where such let or hindrance has been attempted, it has been successfully resisted and put down... a certain manner of acting towards one another on the part of seafaring men, when they met on the High Sea, grew up into a custom the origin of which is hidden in the darkness of a remote antiquity, as it was insensibly formed by a repetition of certain acts, which met a common want and reconciled in a simple and equitable manner interests, which threatened at first to conflict with one another."1.

5 In spite of this obvious need for uniform rules, it is disputed whether a common, "unified" maritime law did in fact exist2. That dispute is mainly caused by the contrast between local, regional and supraterritorial rule making in the area of maritime law which existed in those days. The major port cities, like Amalfi, Hamburg, Lübeck, Trani, Kampen, Marseille, Genoa, Barcelona and Wisby, had enacted local sea laws throughout the Middle Ages. However, there existed also a number of very significant and influential regional or even universal compilations of maritime law principles and rules. Their effects on the global unification of maritime law are still felt today3. The broad proliferation of these texts beyond the local confines of the major sea-ports and their wide-spread acceptance among the actors of maritime trade of the Middle Ages speak in favor of the existence of a lex mercatoria of the sea in those days.

6The 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. Traces 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 compilation of maritime law principles 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 in 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 long into 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"4.

7Traces 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 created between 600 and 800 AD and which was later incorporated in the Basilicorum Libri, whose Book LIII deals mainly with maritime law, as an Appendix added 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.

8 In the year 1010 the Amalfian Laws ("Tavole amalfitane", "Tabula Amalphitana" or "Tabula de Amalpha") were codified in the Italian republic of Amalfi near Naples, one of the most important hubs for trade between Orient and Occident of those days. The Tavole contained 66 articles of maritime law and were observed in the whole Mediterranian region until the appearance of the Catalan Book of the Consulate of the Sea (below No. 18). The Maritime Ordinances and Custom of the Sea ("Ordinamenta et Consuetudo Maris edita per Consules Civitatis Trani") of the City of Trani was put together in 1063 by elected consuls of the local Guild of Navigators. Trani was one of the most important ports of southern Italy in the early Middle Ages. The consuls were the best instructed persons in maritime matters in the Adriatic Gulf. The Ordinamenta contained 32 rules and principles of the maritime trade of those days, clothed in decisions of the Consuls ("The Consuls propose, determine, and decide..."). Subjects covered were, inter alia, the contributions to the loss of cargo at sea, reasons for discharging a seaman from a ship, penalties for quitting service to a ship and the ship-master's right to hypothecate the ship in order to buy supplies5. A Venetian translation made from the original Latin was first published in Venice in 1507 as an appendix to a copy of the Statuta Firmanorum, the statutes of the commune of Fermo. An English translation of the Ordinamenta appeared in the English Black Book of the Admiralty (see below No. 16).

9 Maritime Ordinances were also issued by other major port cities like Arles (1150), Marseille (1162), Genoa (1186), the Peloponnese peninsula Morea (1200), Venice (Capitulare navium of 1205 and Statuta et ordinamenta super navibus of 1255), Aragon (1270 and 1340), Barcelona (1258), Hamburg (1301/06, revised in 1497), Danzig (1429), Reval (1482) and Lübeck (1537). The scope of the maritime regulations in these town laws was restricted to the skippers, shipowners, crew members and merchants of a single town. The citizens of this town were bound to these laws by an oath which they took annually. These local laws contained not only private law rules, but also public law provisions related to the harbour and the law of wreck. Together with other early maritime codes, they all testify to both the continuity and uniformity of maritime law in the Mediterranean region inherited from Roman practices, but modified by local conditions.

10 Maritime law as applied by the city-states of those days was therefore far more uniform and in that sense "international" in character than the municipal laws derived from their constitutions, statutes and customs6. That approximation or even uniformity of local maritime rules was fostered by a number of highly influential super-territorial compilations of rules and principles of maritime law. Even though in themselves, they often lacked an authority to administer justice based on them, they enjoyed wide-spread acceptance "as law" by the parties involved in maritime trade and sometimes even by judicial an/or royal authorities.

11The Rôles d'Oléron ("Jugements de la mer", also known as "Loix de Layron", "La Ley Olyroun" or "coutumes de la mer") are the oldest and best-known sea-laws in north western Europe. They were promulgated around 1160 on the island of Oléron near La Rochelle and just North of Bordeaux in the Bay of Biscay. Their origin is not free from doubt. Some argue that they were first proclaimed, perhaps in the Castrum of Le Château-d’Oléron, by Eleanore of Aquitaine, queen of France (1137-1152) and England (1154-1189), duchess of Aquitaine (1137-1204) and one of the most influential women of the High Middle Ages. Eleanore had just returned from the second crusade in which she had accompanied her first husband Louis VII. During her journey, she got in touch with maritime law principles. However, the English Fasciculus de superioritate maris of 1339 contains a document stating that it was Eleanore's son, King Richard I ("the Lionheart"), who formulated the Rôle ("ley Olyroun") while on passage from the Holy Land. Alternatively, he may also have simply approved the work of the Queen Regent after his return. According to another, more convincing theory, the creation of the Rôles was based on the different merchants' and mariners' guilds of northwestern Europe in the thirteenth century, the text of the Rôles being either first formulated by one trading community and then adopted by the others, or collectively created by the different communities in unison7. This view is supported by the fact that the Rôles were formulated in simple and plain language. This view can thus be reconciled with the first in that Eleanore was not involved in the actual drafting of the Rôles, but was merely responsible for their formal proclamation.

12 Initially purely oral8, the Rôles were written between 1160 and 1286. They were initially published in French. They derive their name from the fact that their first version was written on parchment which was rolled and put in a case so that the Rôles could be taken on a ship journey. Their first version had 24 articles. That number rose to 47 in a sixteenth century version as the law developed. The oldest extant copy dates from the early fourteenth century and is contained in the Liber Horn (1311), a collection of charters, statutes and customs which was compiled by Andrew Horn, one of the most important English lawyers of his time, a fishmonger and Chamberlain of the City of London. The version in the Liber Horn is probably a copy, directly or indirectly, of an Anglo-Norman original. The English King Henry VIII published the Rôles in 1351 as "The judgment of the sea, of Masters, of Mariners, and Merchants, and all their doings", which is but a literal translation of their earlier French title. That version had a considerable influence on the Black Book of Admiralty published in the fourteenth century (below No. 16).

13 The Rôles were formulated for the sea transport of wine from Brittany and Normandy to England, Scotland and Flanders. Because the Il d'Oléron was English when the Rôles were first proclaimed, there was intensive wine trade with that country in those days. They did not contain general principles of maritime law, but were mainly concerned with specific practical issues related to the security of the ship, the legal relations between crew and master and the status and security of the cargo during the see transport. They were based on a long succession of cases decided or to be decided by the local Admiralty Court on the island of Oléron. That Court was associated with the Atlantic Seaman’s Guild, the most powerful seamens' guild of the Atlantic of those days. All but one of the paragraphs of the Rôles were drafted in the form of a ruling on a case, always ending with the wording "C'est le jugement (en ce cas)". For the case of jettison, the Rôles provided that "the Roman law must be applied", probably a reference to the Lex Rhodia. Essentially, the Rôles were most probably a product of the francophone maritime communities of the thirteenth century and the maritime practice manifested in their articles made them a dynamic document of customary law9.

14 Translations of the Rôles into Flemish, Dutch ("Judgements of Damme", "Vonnesse van Damme" or "Lois des Westcapelle" or "Waterrecht van Damme") and Scots ("Of lawis of scyppis", "Of laws of ships") spread through Western Europe10. The Dutch collection of customary law of the sea of the Zuidersee towns ("Ordinancie ende insettinghe die de coopluden ende schippers holden mit malcander", "Ordinance and statute which the merchants and skippers observe among themselves") dates from the mid-fourteenth century. In one of those towns, Kampen, two collection of town laws, the Boeck van Rechte and the Gulden Boeck, both contained various maritime regulations influenced by the Rôles. The Shiprecht of the same town, which was likely written between 1425 and 1450, contained a collection of maritime regulations which are clearly recognizable as the Vonnesse11. 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. 

15 The binding authority of the Rôles from the Mediterranean to the Baltic sea was repeatedly confirmed in other texts related to maritime trade. An ordinance by the French King Charles V (Charles "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")12. 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 (with additions for English legal purposes) as well as the need for speedy proceedings ("Est de faire sommaire et plein proces selon loy marine et ancienne coustume de la mer")13.

16 The English Black Book of the Admiralty ("Liber Niger Admiralitatis") of ca. 1360 was a manual of instruction drafted by the registrar of the Admiralty Court for the English Lord High Admiral. The first, more ancient part of the Book was written in old French and contained admiralty laws, decisions, ordinances, instructions, and acts of the King and the Court of Admiralty. The second part contains a Latin treatise on procedure which bears some resemblance to a treatise ("Tractatus Judiciorum") produced by Bartolus de Sasso-Ferrato around 1355. The Book also contains a collection of documents, including an English translation of the Rôles. This confirms that they were the rule of decision of those days for maritime matters. Even the pirate codes ("Articles") concluded between some well-known pirates and their crews, like the "Obligation" (1675) of the Irish pirate George Cusack, acknowledged the binding force of the Rôles ("Lawes of Pleron"). There thus seemed to exist a strange contrast between the "lawlessness of live at sea in the Middle Ages" and the acknowledgement of the binding nature of the Rôles by some of those who were responsible for that situation. However, medieval sailors of all types were generally content to obey the law of their own medium - maritime law14. It was mainly for that reason that the plaintiffs or their lawyers in piracy cases of those days often argued that the claim for restitution of goods stolen by pirates should be settled, as a matter of fact, according to the Law Merchant, the laws of the sea or the Rôles15.

17 For all the above reasons, the Rôles have a unique place in legal history. They form the basis of modern maritime law in both the French civil law tradition and the English common law tradition. Because of this special nature and their transnational authority, they have been cited as precedent numerous times by English and US Courts, including the US Supreme Court (below Nos. 21, 22) and, accordingly, can be considered as part of US maritime law as defined by the US Constitution.

18Another 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", "The maritime customs of Barcelona universally known as the Book of the Consulate of the Sea") which was first printed in 1494 in Barcelona. Already in 1347, a royal ordinance had granted Barcelona the right to elect its consuls, thereby creating a public maritime court (not a guild court) responsible for the judgement and aministration of maritime law. The first part of the Book contained 334 articles devided into three sections: a) 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, b) a collection of ancient customs and constitutions of the sea and c) a collection of rules on the proper relations between crews and owners of war ships. The second part of the Book is a collection of maritime ordinances of the kings of Aragon and of the councillors of the city of Barcelona, ranging over a period from 1340 to 148816. The Book circulated in Europe under the title "The Consulate of the Sea". In the sixteenth century it was translated into Castilian, Italian, Dutch, German and French, but not into English. Its value lay in the fact that it was the first work to collect the scattered laws and customs of Roman, Greek, Byzantine, Rhodian, Italian, French and Spanish maritime rights. In Spain the Book continued to be in use until the introduction of the Spanish Commercial Code in 1885.

19The Wisby Sea Law ("Gotlandic or Wisby Water Recht") of the fifteenth century, a compilation of rules and principles of customary maritime law of different origins, and the Sea Law of the Hanseatic League of 1614, 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, the powerful association of the major seaports at the North and Baltic Seas as well as major inland trading cities of those times, was the culmination of a long history of rule-making activities by its general assembly ("Hanserecesse") which held its meetings in 1378, 1412, 1417, 1418, 1434, 1435, 1441, and 1447. These activities were first focused 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 161417. Unlike all previous compilations which had been drafted by traders, the Hanseatic Sea Law was written by the lawyer Dr. Johannes Domau. Mainly for that reason, the Hanseatic Sea Law assumed the character of a first systematic codification of the law of the sea of those times18.

20Some 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 court 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 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 of the transformation of maritime customs and rules into state legislation, a development that later led to the disappearance of the law merchant (No. 38 below). In fact, that Ordinance, together with its counterpart for land trade of March 1673 ("Code marchand", "Code Savary"), became the forerunner of the French Code de Commerce of 180719 .

21It was from a comparative survey of these early compilations of admiralty law, including a literal quotation of the fourth principle of the Rôles, that Lord Mansfield, Chief Justice in the English court of King's Bench and modernizer of English commercial law and the judicial system, in his famous judgment Luke v Lyde of 175920 concluded that "maritime law is 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 law21, a lex mercatoria maritima. With this decision, Lord Mansfield made a significant contribution to the amalgamation of common law and civil law in English maritime law, thereby consolidating its unique transnational character. Since English maritime law has influenced a number of other common law jurisdictions, their maritime laws also stem indirectly from civil law origins, as was acknowledged by the Supreme Court of Canada:    

"There is no doubt that the development of English admiralty law, from which the Canadian maritime law in considerable measure derives, owes much to the civilian tradition. The common law in its early period was ill-equipped to deal with commercial and maritime matters and the courts of admiralty, when called upon to decide maritime disputes, applied principles developed on the continent."22  

22 Consequently, the existence of this ius gentium of the sea was also acknowleged in modern times as part of US law in judgements of the US Supreme Court and other US courts by reference to, among others, the Rhodian Sea Law, the Rôles d'Oléron and the Sea Law of the Hanseatic League:

"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"23

23 In light of the strong force and success of this development of transnational maritime law from antiquity to modern times, it is not surprising that the idea to set up universal "codifications" of uniform principles of maritime law in the Middle Ages was picked up by maritime lawyers in the first half of the 19th century, when it was commonly acknowledged that the courts of admiralty and maritime law were courts of international law. Their activities lead to the foundation of the Comité Maritime International (CMI), the oldest international organization in the maritime field which is exclusively concerned with the unification of maritime law and related commercial practices. The creation of the CMI foreshadowed both the foundation of the International Chamber of Commerce (ICC) as the "wold business organization", the most important non-governmental formulating agency for general business law (including some aspects of maritime [criminal] law) in 1929 and the understanding gained in the early 1960s of the strong role which these and many other formulating agencies play as catalysts for the evolution of a New Lex Mercatoria (see below No. 49).

b. International Trade

24The 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 charters of privileges and other documents affecting the town and its trade guilds. It contains mainly entries from the fourteenth and fifteenth centuries. 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 focused exclusively on ways to evade inconvenient common law rules 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 judgements24 in order to reach a fair and equitable resolution of disputes between merchants.

25 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 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 ("piepowders" or "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 session25. Many of these mercantile cases were decided by the Court of King's Bench, either in the first instance or by writ of certiorari from the Chancery for the examination and correction of a judicial error. The underyling motive was to have these cases between merchants decided by expert assessors or jurors according to the customs of the merchants rather than according to common law26. King Edward I also implemented by two Ordinances ("Statute Merchant" for all merchants and "Statute Staple" for merchants visiting the staple towns) a system for the simplified enforcement of judgements against debtors, due to the frequent difficulties encountered especially by foreign merchants in obtaining such execution27.

26In 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”28. This claim was not followed by a more specific expression of general principles of mercantile law. Thus, in the decisions and regulations of the Civil Rota, a court specialized in mercantile law and 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").

27The first comprehensive treatise on the law merchant was the study Tractatus de Mercatura by Benvenuto Stracca, published in Venice in 1553 (with subsequent editions of the work also published in Lyon and Cologne). That book 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.

28The topic of the historical Lex Mercatoria was later developed in great detail by the merchant Gerard de Malynes. He was born into 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 Queen Elizabeth I and King 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" as well as 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..."29

29Malynes 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"30. 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."31

30In 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".32

31The 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 166233. 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.

32  Throughout the seventeenth century, the widespread practice of procuring impartial expert opinions on specific legal issues of mercantile law ("parères") from merchants with recognized practical experience served to establish a trans-regional or even pan-European mercantile law. These expert opinions were written at the request of a party or of the court for judicial proceedings between merchants, especially in cases where neither the ius commune nor local law offered a solution and the judges lacked the necessary expertise for the field of commerce out of which the dispute had emerged. Through their informal proliferation, the parères assumed a significance that went well beyond the dispute they were written for. They had the important effect of consolidating and unifying mecantile practices and the legal rules governing these practices.34  

33The posthumous edition of Blackstone's Commentaries on the Laws of England of 1809 put an end to the "romantic"35 view of the historical Lex Mercatoria and foreshadowed (see No. 38 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”.36

34In line with the sceptical view presented in the posthumous edition of Blackstone's Commentaries, an expert on English commercial law wrote in 1845 that "no part of the history of English law [was] more obscure than that connected with the maxim that the law merchant is part of the law of the land"37.

35 The 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's "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.

36In the US, the Supreme Court, in its landmark decision Swift v Tyson of 1842, did not follow the sceptical approach in the posthumous edition of  Blackstone's Commentaries but referred to Lord Mansfield's famous reasoning in support of the existence of transnational maritime law in Luke v Lyde38 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 merchant39. In Swift v Tyson, he applied the general principles of the law merchant as part of the federal commercial law40:

"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]."

37Almost 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 the view of the Supreme 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

38Insofar 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 accompanying issues of state-sovereignty that came along with it began to prevail over the concept of an independent "trans-national" commercial law.41. Consequently, the principles and rules of the medieval Lex Mercatoria were incorporated into the major European codifications of commercial law like the French Code de Commerce of 180742 or the General German Commercial Code (Allgemeines Deutsches Handelsgesetzbuch, ADHGB) of 1861.

d. Features and Foundation Myths of the Historical Law Merchant

39To 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 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.43

40With 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 transactions has been made for many decades44. 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"45.

41 As late as 1924, the Supreme Court of North Dakota, USA, referred to the existence of the law merchant as a body of law separate from the general common law:

"The law merchant is a system of law that does not rest exclusively on the institutions and local customs of any particular country, but consists of certain principles of equity and usages of trade which general convenience and a common sense of justice have established to regulate the dealings of merchants and mariners in all the commercial countries of the civilized world. 3 Kent, Com. 2; Brooklyn City N.R. Co. v. National Bank, 102 U.S. 14, 31, 26 L. ed. 61, 68. Of this system we are required to take judicial notice. Comp. Laws 1913, §§ 7938-7952. 'This lex mercatoria or common law of merchants is of more universal authority than the common law of England.' 1 Randolph, Com. Paper, 1. ... In other words, the transactions of commerce were regulated by a law of their own and that was the law merchant 'which all nations agree in and take notice of.' 1 Bl. Com. 273.

It should be noted that the lex mercatoria was originally a separate body of law and, like equity and admiralty law, was administered in separate or special courts. See Jenks, History Eng. Law, pp. 40, 128. It was somewhat analogous to the Roman system known as jus gentium.

The lex mercatoria was not, like the common law, the custom of a place or territory; it was the recognized custom of merchants and traders who had business relations in all the countries of Europe, including England. The merchants class, and disputes among its members arising out of commercial transactions, were not subject to the common law. This practice grew out of the necessities of commerce and of trade. Merchants traveled from fair to fair and from place to place, but in all places the same rules of law were administered and enforced in commercial litigation."46 

42 Edward Jenks, to whom the court had referred in his above judgement, had argued in his Short History of English Law of 1913:

"...the charters granted to merchant gilds and burgesses expressly or by implication recognized the existence of market and other courts, in which the Law Merchant and not the Common Law was administered"47  

43 The proponents of the New Lex Mercatoria see themselves in historical continuity to these claims.

44 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 more48. The same applied to commercial customs49. Only very few and very general legal principles developed out of the purely process-oriented approach of the Middle Ages50. 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 divine 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.

45 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's 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 scripta, i.e. were not regarded as mandatory51.

46The fact that, contrary to maritime law, no compilation of general principles of the law merchant existed until the mid sixteenth century is somewhat paradoxical given that without a common understanding as to the effects of 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 to be called "rules". These rules, however, were not judge-made law, but instead largely generated in extrajudicial transactions, and remained implicit in transactions that did not lead to disputes52. 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. 58).

47To 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"53. However, even when acknowledging that the medieval Lex Mercatoria is a myth, that myth 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."54

 

2. The New Lex Mercatoria

a. Rediscovery

48The Lex Mercatoria was rediscovered in the 1960s by Berthold Goldman and Clive Schmitthoff. Their research activities had their roots in developments in the global economy since World War I, particularly in the standardization of contract clauses55 for sales, (maritime) transports, international trade and finance and the proliferation of international commercial arbitration. Goldman and Schmitthoff worked almost simultaneously in Dijon and London respectively on the revival of the idea of the medieval law merchant. However, they had fundamentally different conceptions of the scope and legal quality of the transnationalisation of commercial law, especially with respect to the extent to which it is or is not independent from domestic law. Goldman regarded the New Lex Mercatoria as a third, autonomous legal system besides domestic laws and public international law56. For Schmitthoff, transnational law existed only within the confines of the principle of party autonomy as a principle of domestic law57.

49 In spite of these differences in their basic approach to the legal qualification of the New Lex Mercatoria, Goldman and Schmitthoff shared the conviction that a transnational body of legal principles and rules was 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 the law of international trade and finance (Schmitthoff)58. As a natural consequence of his view, Clive Schmitthoff became the conceptual father of the United Nations Commission on International Trade Law, UNCITRAL59. Goldman on the other hand directed and supervised research in various areas of international business law conducted by his academic pupils Philippe Fouchard (international arbitration), Philippe Kahn (international sales law) and Jean Stoufflet (international trade finance), the members of the École de Dijon60.

b. Different Meanings of "New Lex Mercatoria"

50 The difference of views between the fathers of the New Lex Mercatoria doctrine as to its true legal nature is reflected in the modern debate. Some authors use the term to denote a mere "mass" of rules and principles, devoid of any internal consistency or systematic quality. In line with Schmitthoff's view, this legal mass is said to derive its validity and enforceability from the fundamental principle of party autonomy in contract law which is accepted today by the vast majority of jurisdictions across the globe61. For the proponents of this view, the New Lex Mercatoria is anything but autonomous, given that it is said to exist only insofar as it correlates with the contractual freedom granted by domestic legislatures.

51 A second view regards the New Lex Mercatoria as nothing but the totality of trade usages that are refined according to the needs of international commerce62. Trade usages, however, hold an "uncomfortable position between contract terms ["subjective theory"] and legal rules ["objective theory"], between fact and law"63. Together with other "factual legal sources", such as general conditions of trade or, to a much lesser extent, customs established between contract partners, they may constitute the first stage towards the development of customary law and, as such, towards the creation of a New Lex Mercatoria: "All customary law of international trade has the quality of trade usages but not all trade usages are customary law"64. Unless trade usages reach this new level in the hierarchy of legal sources, they do not have the quality of law.

52 For the proponents of both views, the question as to the legal nature and legitimacy of what they call the "New Lex Mercatoria" can be answered easily. For them, the legal quality of their "New Lex Mercatoria" is decided according to the well-known and generally accepted categories of the applicable domestic law, i.e. the principle of party autonomy or the statutory or judicial acceptance of trade usages as a factual supplement of the applicable domestic law. That categorization always occurs within the legal confines - such as mandatory statutory rules - set by that domestic law.

53A third and much more radical view regards the New Lex Mercatoria as an independent, supra-national legal system. This view stands in the tradition of Goldman and is the view relevant in this text and for the TransLex-Principles. It derives its justification and validity not from domestic laws, but from its own autonomous existence65. As an independent legal system, the New Lex Mercatoria supersedes even mandatory provisions of the otherwise applicable domestic law. The majority of those who hold this view place the transnational legal system between domestic laws and public international law. International arbitral tribunals and parts of French legal doctrine even want to combine all three views described above, considering the New Lex Mercatoria as the totality of international trade usages which have the character of an independent legal system, deriving its justification from the acknowledgment by domestic laws66.

54 Despite these different views as to the true legal nature of the New Lex Mercatoria, the proponents of all views agree that transnational commercial law is "living law" or "law in action" whose evolution is progressing at a rapid pace, imposing special challenges for any attempt to codify it:

 "...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."67 

c. New Lex Mercatoria and Globalization

55This idea of transnational commercial law as a "third" legal system provides a vital means to meet the challenges of globalization68. Various phenomena contribute to the gradual evolution of a system of "a-national", i.e. transnational, legal principles and rules. The boundless mobility of people, capital, commodities, services and data across national frontiers has resulted in increased economic interconnectedness and interdependence of states and regions across the globe. In parallel to the gradual development of a global marketplace, the traditional boundaries between national and international law, public and private law and politics and law have been eroded over time. The significance of the sovereign state as "top-down" lawmaker69 for international business transactions has decreased because domestic legislatures and their steady lawmaking procedures are not able to keep pace with the ever increasing speed and sophistication of international business and trade. The fact that international businessmen perceive domestic laws and courts to be unable to meet their legitimate expectations in legal certainty and predictability of the normative orders governing their deals has resulted in a dramatic increase of private "bottom-up" self-regulation ("private governance"70) by non-governmental formulating agencies such as UNCITRAL, ICC, UNIDROIT, IBA or ISDA. Self-regulation is also effected by international businessmen themselves, for example through their continuous use of standard forms and more or less identical or at least similar contract clauses (e.g. on force majeure) which are constantly adapted to the changing needs of international business. All these instruments and phenomena are the drivers behind a global standardization and unification process that takes place beyond the reach of domestic laws and which is intended to better cope with the legitimate practices, risks, needs and expectations arising out of the cross-border activities of businessmen around the globe71.  

56 The decision-making practice of international arbitral tribunals provides an important catalyst for these developments. Both Goldman72 and Schmitthoff73have acknowledged their significance for the evolution of transnational commercial law. In fact, international arbitrators have become the natural judges of international commerce. The success both 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". Their standing - firmly acknowledged by domestic courts, lawmakers and international formulating agencies alike - 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 often refer to transnational rules or general principles of law74, both to decide the case before them and to invest their decision, based on domestic law, with increased comparative persuasiveness vis-à-vis the parties to the dispute75.

d. Legal Pluralism

57Apart from these practical issues, legal pluralism76 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 these developments into account. 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".

58 Contrary to the traditional legal paradigm which focuses almost exclusively on the state, legal pluralism regards the multi-facetted ways of private rulemaking through the international business community above, below or beyond the nation state, including the contract itself, as potential sources of law. The legal pluralists see "a paradigm shift in legal theory – an attempt to bridge the experience of legal pluralism in the nation state with that of the functionally differentiated world society"77. For them, the new Lex Mercatoria is not disqualified as law merely because it is not national or because it is derived from private contracts concluded between private parties78.

e. Industry-Specific Sub-Systems

59A 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 claimed to exist today. In light of its great historical significance (see above Nos. 4-18), it is fair to assume that such a sub-system does in fact exist today for maritime trade ("lex maritima"79).

60 However, that claim has also been made for other industry sectors, such as construction ("lex constructionis"80), oil and gas ("lex petrolea"81) or more generally the extractive industry ("lex extractiva"), for Cyberspace ("lex informatica"82), for blockchains and smart contracts ("lex cryptographia"83) and for international banking and finance ("lex financiaria"). 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").

61 International commercial arbitration is said to be governed by a lex mercatoria processualis (arbitralis) which has developed out of the merging of common law and civil law traditions into a single global paradigm for a private and truly transnational adjudicatory process84.

 

II. The TransLex-Principles

1. Purpose

62While 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 into 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 concept85. 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?"86.

63The 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.

64 A special role is played by case law and statutes from hybrid or mixed jurisdictions such as Quebec, Louisiana, South Africa, Scotland, Indonesia, the Philippines, Israel or India. They combine traditions of more than one legal system and operate as "veritable comparative-law laboratories in continuous operation"87. Whether hybrid or not, domestic legal systems provide the basis for the determination of general principles of law in that they are extracted from these systems through the use of comparative law methodology.  In the context of the New Lex Mercatoria, general principles of law provide the substratum for the development of new legal rules without the need to have recourse to principles outside the realm of transnational law. Because of their genetic function as a driver of the evolution of the New Lex Mercatoria, the argument that general principles of law should not be included as sources of the New Lex Mercatoria because "general principles of commercial law" do not exist must be rejected. Every legal system, whether commercial or not, requires some basic standards and principles out of which new rules can be developed. It is their fundamental legal character and not their commercial nature which qualifies general principles of law as constituent elements of the New Lex Mercatoria. 

65 Another important role is plaid by the restatements of international contract law such as the UNIDROIT-Principles, the Lando-Principles or the Common Frame of reference of the EU. By including them in their rich reservoir of comparative law references, the TransLex-Principles assume the role of a "Restatement of Restatements"88. Due to this role of the TransLex-Principles, some rules were included in the list even though the respective rule has not yet been used in an award or a contract clause. 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 both that and specifically how the New Lex Mercatoria is gradually developing into a genuine system of law.
 

2. The "Creeping Codification" of the New Lex Mercatoria

66The TransLex-Principles are based on the concept of the "Creeping Codification"89 of transnational law: a non-exhaustive, open list of principles and rules of the New 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"90.

67Any attempt towards formal "codification" of the New 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:

"Attempts to capture commercial law in statutes or codification are typically met with the concern that the 'living' commercial law consisting of customs and usages will crystallize, petrify, and thus be rendered incapable of accommodating practical mercantile necessities. The tension between the idea of 'living law' of commerce and that of codification remained the target of the critics of the project to unify the international law of sales...."91.

68However, 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 together with short commentaries allows users to apply the New Lex Mercatoria in practice;
  • the reproduction of comparative law references for each principle or rule helps save time and money that must be invested in comparative research required to determine the contents of transnational law92;
  • displaying relevant materials in full-text versions for each principle and rule allows users to make their own judgement about the comparative persuasiveness of these sources.

69The TransLex-Principles therefore merely establish a presumption that the principles and rules reproduced in the list form part of the New 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 twentieth 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."93

70In 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").94

71The Common Frame of Reference (CFR) drafted by these Groups has been characterized as a "non-legislative codification of European private law" and as a "codification-like system of legal norms with immediate application".95 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."96

72This 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...".97

73 The relaxation or de-formalization of the traditional, narrow and top-down notion of codification also serves to alleviate concerns raised by Emmanuel Gaillard, Roy Goode and Eric Loquin against any attempt to codify transnational commercial law. According to them, the drafting of abstract lists of principles and rules is irreconcilable with the true nature of the New Lex Mercatoria. 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.98

74 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, the idea that the parties to an international arbitration are in a position to limit the application of the comparative method to be used to determine the contents of the New lex Mercatoria to those (very few) jurisdictions involved in the specific dispute99 is irreconcilable with the global nature of the New Lex Mercatoria. Such "comparative cherrypicking" would cause the global Lex to degenerate into legal principles and rules of a mere regional or perhaps only bilateral origin. If a tribunal wants to apply the New Lex Mercatoria, it must take account of its nature as a truly global law. It cannot escape its task to determine its contents on a corresponding global scale. That approach, however, involves 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".100  

 

Conclusion

  75 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 usable in everyday contract and arbitration practice. They may be used for many purposes, for example as a means:

  • 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;
  • to determine the applicable law, if, absent a choice of law by the parties, the arbitrators decide to apply "transnational commercial law", "general principles of law", "the lex mercatoria" or the like to the dispute before them;
  • to allow for both an autonomous interpretation of and for the filling of internal gaps in international conventions and other uniform law instruments101;
  • to allow for the "internationally useful" construction of domestic law in international disputes;
  • 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.;
  • to supplement or correct a future European Civil Code in international commercial disputes102;
  • to provide legal know-how about modern commercial law to developing and transition countries;
  • to provide information about transnational law to other sciences (economics, sociology, political sciences) 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.

_______________________________________

Footnotes

1) Twiss, Introduction, in: Twiss (ed.), The Black Book of the Admiralty, Appendix-Part II, 1873, xxxix.

2) Frankort, Of Laws of Ships and Shipmen, Medieval Maritime Law and its Practice in Urban Northern Europe, 2012, 1 et seq, 199: "A detailed analysis of the spread of the written laws, of their content and of various aspects of legal practice has proven that a common maritime law never came into being in medieval northern Europe. Instead, local variations continued to exist throughout the period, revealing themselves in varying collections of manuscripts, diverging regulations in the law books, a different use of the written laws and dissimilar judgements in the town courts... Although some variations were due to developments in sea shipping, and although similarities did also exist between some of the laws, it is certainly inappropriate to speak of common contents"; see also Cordes, Lex Maritima? Local, regional and universal maritime law in the Middle Ages, in: Blockmans/Krom/Wubs-Mrozewicz (eds.), The Routledge Handbook of Maritime Trade around Europe 1300-1600, 2017, 69 et seq.  

3) Mangone, United States Admiralty Law, 1997, 13 et seq: "...the framework of modern maritime law can be seen in the medieval codes. Many of the fundamental rules have endured with only slight modifications to meet contemporary conditions, and the development of separate courts with specific jurisdiction over marine activities owes its origins to those consuls of the sea who heard thousands of cases in the Mediterranian, Eastern Atlantic, and Baltic seas - long before steam power, diesel engines, mechanized gentries, refrigerated warehouses, containerization or electronic data." 

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

5) See Murino, Ander per Mare nel Medioevo: Le antiche consuetudini marittime italiane, 1988 with references to the local admiralty codes of Trani, Amalfi, Bari, Venice, Ancona, Pisa, Sassari, Genoa, Gaeta, Rome, Naples, Trapani and Messina.

6) Mangone, United States Admiralty Law, 1997, 7.

7) See for the various theories as to the origins of the Rôles Twiss, Introduction, in: Twiss (ed.), The Black Book of the Admiralty, Appendix-Part II, 1873, xlviii et seq; Krieger, Ursprung und Wurzeln der Roles d'Oléron, 1970, 12 et seq.

8) Twiss, Introduction, in: Twiss (ed.), The Black Book of the Admiralty, Appendix-Part II, 1873, xl et seq: "Writing was at that time by no means of the essence of the Law of the Sea, which was proved by the oral testimony of men skilled in the custom of the sea, just as we find that the custom of the land was in the eleventh and twelfth centuries proved by the living voice of the peers of the parties (judicium parium), chosen from those who were best versed in the custom, or had been present at the settlement of disputes in previous cases of a like nature".

9) Heebøll-Holm, Ports, Piracy and Maritime War: Piracy in the English Channel and the Atlantic, c. 1280-c. 1330, 2013, 130.

10) Frankort, Of Laws of Ships and Shipmen, Medieval Maritime Law and its Practice in Urban Northern Europe, 2012, 12 et seq.

11) Frankort, Of Laws of Ships and Shipmen, Medieval Maritime Law and its Practice in Urban Northern Europe, 2012, 88 et seq.

12) Ward, The World of the Medieval Shipmaster: Law, Business and the Sea, c.1350-c.1450, 2009, 20; Frankort, Of Laws of Ships and Shipmen, Medieval Maritime Law and its Practice in Urban Northern Europe, 2012, 12.

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

14) Runyan, The Rolls of Oleron and the Admiralty Court in Fourteenth Century England, American Journal of Legal History 1975, 95 et seq.

15) Heebøll-Holm, Ports, Piracy and Maritime War: Piracy in the English Channel and the Atlantic, c. 1280-c. 1330, 2013, 128.

16) Twiss (ed.), The Black Book of the Admiralty, Appendix-Part II, 1873, Introduction, lxi et seq.

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

18) Horn, Die legistische Literatur der Kommentatoren und die Ausbreitung des gelehrten Rechts, in: Coing (ed.) Quellen und Literatur der neuen Europäischen Privatrechtsgeschichte, Vol. 1, 1973, 284 et seq.

19) 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, 9, 22.

20) 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.

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

22) Tetley, Introduction, in: Herber (ed.) International Encyclopedia of Comparative Law, Vol. XII (Law of Transport), Chapter 4 (Maritime Transportation), 8, para 18 quoting from Q.N.S. Paper Co. v. Chartwell Shipping [1989] 2 Can. S.C.R. 683, 695.

23) R.M.S. Titanic Inc. v. Haver, 171 F. 3rd. 943, 961 (4th Cir. 1999); see also US Supreme Court Sosa v. Alvarez-Machain, 542 US 692, 715 (2004) with reference to Blackstone: "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"; see also Delovio v Boit, 7 Fed Cas. 418 (No. 3776) (CC Mass 1815); see also the early English judgement Daniel Harmer v William Errington Bell and Others, "The Bold Buccleugh" (1850/51) 13 E.R 884, 7 Moo P.C. 267; see generally van Hooydonk, Towards a worldwide restatement of the general principles of maritime law, The Journal of International Maritime Law 2014, 170 et seq.

24) 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."

25) See Bracton, De Legibus et Consuetudinibus Anglicae, 1 v.f. 334a; Cordes, Lex Mercatoria, Handwörterbuch zur deutschen Rechtsgeschichte (HRG), 2.ed., 2004 and onwards, Columns 890-902.

26) See Hall, Introduction, in Hall (ed.) Selden Society, Selected Cases Concerning The Law Merchant, Vol. II, Central Courts, 1930, IX, XII.

27) See Hall, Introduction, in Hall (ed.) Selden Society, Selected Cases Concerning The Law Merchant, Vol. II, Central Courts, 1930, IX, XI.

28) 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; see also Hall, Introduction, in Hall (ed.) Selden Society, Selected Cases Concerning The Law Merchant, Vol. II, Central Courts, 1930, IX, XIII: "In the [seventeenth] century the Chancellor suggested to the King's Council in the Star Chamber that merchants, particularly aliens who visit his kingdom under the King's protection, are not bound by the law of the land (of which they may be ignorant) but are allowed to sue in the Chancery or before the King and Council in Parliament. The Chancelor also observed that it might be for this reason that the law merchant (which is the law of nations, which is the law of Nature) was admitted into the procedure of our courts for the benefit of those who come and go with their merchandise." (footnote omitted).

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

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

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

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

33) 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.

34) Amend-Traut, Diversité ou unité? Culture juridique, correspondances et différences dans la recherche de la justice en Europe, GLOSSAE, European Journal of Legal History 2018, 32 et seq.

35) 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.

36) 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).

37) Blackburn, The Contract of Sale, 1845, 207.

38) See text at footnotes 19, 20 above.

39) 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.

40) 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."

41) 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....”.

42) 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.

43) 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."

44) 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".

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

46)  North Dakota Supreme Court in Bank of Conway v. Stary, 51 N.D. 399, 408 et seq (N.D. 1924).

47)  Jenks, A Short History of English Law, From the Earliest Times to the End of the Year 1911, 1913, 40. 

48) 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, 9, 18 et seq; 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; Mankowski, Rechtskultur, 2016, 399.

49) 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?".

50) 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.

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

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

53) "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" (references omitted).

54) 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”.

55) 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.

56) See Goldman, Frontières du droit et lex mercatoria, Archives de philosophie du droit 1964, 177 et seq.; Goldman, La Lex Mercatoria dans les Contrats et l'Arbitrage International: Réalités et Perspectives, Clunet 1979, 475 et seq.; Goldman, Nouvelles réflexions sur la lex mercatoria, Études de Droit International en L'Honneur de Pierre Lalive, 1993, 241 et seq.

57) See, e.g.Schmitthoff, The Law of International Trade, its Growth, Formulation and Operation, in: Schmitthoff (ed.), The Sources of the Law of International Trade, 1964, 3, 33: "No legal system that admits the principle of autonomy of choice of the proper law of contract, in the orthodox sense, can object to an attempt of the parties to make their contractual regulation self-regulatory"; see also 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).

58) 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).

59) See UN Document A/6396, Report to the UN Secretary General ("The Schmitthoff Study"), the document which was the ultimate support for the creation of UNCITRAL.

60) Stoufflet, Le crédit documentaire: étude juridique d'un instrument du commerce international, 1957; Kahn, La vente commerciale internationale, 1961; Fouchard, L'arbitrage commercial international, 1965.

61) See Fragistas, Arbitrage Étranger et Arbitrage International en Droit Privé, Rev.crit.dr.int.pr. 1960, 1, 14 et seq.; Bonell, Das Autonome Recht des Welthandels - Rechtsdogmatische und Rechtspolitische Aspekte, RabelsZ 42 (1978), at 485, 486 et seq., 495; David, Le Droit du Commerce International: Une Nouvelle Tache pour les Legislateurs Nationaux ou une Nouvelle 'Lex Mercatoria'? in: UNIDROIT (ed.), New Directions in International Trade Law, 5, 18: "Le problème n’est plus … de savoir si les commerçants peuvent créer un droit qui leur soit propre, autonome par rapport aux droits nationaux, c’est plutôt de savoir si les législateurs nationaux l’autorisent, quelle mesure de liberté ils vont consentir aux particuliers pour que ceux-ci élaborent des régles, qui apparaissent comme intégrées aux droits nationaux, et non plus comme autonomes par rapport à ceux-ci". 

62) See, e.g. Paulsson, La Lex Mercatoria dans l'Arbitrage C.C.I., Rev.d’Arb. 1990, 55, 60 et seq.; Dasser, Internationale Schiedsgerichtsbarkeit und Lex Mercatoria, 1989, 63; van Houtte, The Law of International Trade, 2nd ed 2002, No. 1.35; Langen, Transnationales Recht, 1981, Part I, No. I-24: "The law of trade usages as so-called lex mercatoria" (translation by the author).

63) Gélinas, Trade Usages as Transnational Law, in: Gélinas (ed.) Trade Usages and Implied Terms in the Age of Arbitration, 2016, 253, 277.

64) Dasser, Internationale Schiedsgerichtsbarkeit und Lex Mercatoria, 1989, 91; see generally for the legal quality of trade usages Goode, Usage and its Reception in Transnational Commercial Law, ICLQ 1997, 1, 7 et seq.

65) See, e.g. Berman/Dasser, The 'New' Law Merchant and the 'Old': Sources, Content, and Legitimacy, in: Carbonneau (ed.), Lex Mercatoria and Arbitration, 2nd ed. 1998, 53, 63.

66) See the arbitral tribunal in ICC Award No. 5953, Primary Coal Inc. v. Compañía Valenciana de Cementos Portland, Rev.d’Arb. 1990, 701, 712; Derains, Le Statut des Usages du Commerce International devant les Jurisdictions Arbitrales, Rev.d’Arb. 1973, 122 et seq.; cf. also v. Hoffmann, Internationale Handelsschiedsgerichtsbarkeit, 1970, 115: " … a-national norms, in particular international trade usages and general legal principles" (translation b ythe author).

67) 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.

68) 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."

69) 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".

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

71) Berger, Rechtliche Rahmenbedingungen der Globalisierung - vom Wettbewerb der Rechtsordnungen zu "Private Governance", in: Bierbaum (ed.), So investiert die Welt, 2007, 33 et seq.; Michaels, Ralf/Jansen, Nils, 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.

72) 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).

73) 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".

74) 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.

75) 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).

76) 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.

77) Zumbansen, Transnational Legal Pluralism, Transnational Legal Theory 2010, 141, 151.

78) 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.

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

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

81) 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.

82) 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.

83) de Filippi/Wright, Blockchain and the Law: The Rule of Code, 2018; Werbach/Cornell, Contracts ex Machina, Duke Law Journal 2017, 313 et seq; de Filippi/Hassan, Blockchain Technology as a Regulatory Technology: From Code is Law to Law is Code, 2016.

84) 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.

85) 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".

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

87) 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.

88) See for this term Zimmermann, Reflections on a European Law Institute – based on the proceedings of the Florence conference –, Zeitschrift für Europäisches Privatrecht 2010, 719, 722.

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

90) 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.

91) Dedek, in Jansen/Zimmermann (eds.) Commentaries on European Contract Laws, 2018, Art. 1:105: Usages and Practices, No. 2; 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.

92) 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).

93) 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.

94) 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.

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

96) 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.

97) SCC Award No. 117/1999.

98) 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; Loquin, Où en est la Lex Mercatoria?, in: Leben/Loquin/Salem (eds.) Souveraineté Étatique et Marchés Internationaux à la Fin du 20ème Siècle - Mélanges en l'honneur de Philippe Kahn, 2000, 23, 38: "La régle transnationale sera celle commune à l'ensemble des systèmes juridique intéressés par la relation litigieuse. La méthode sera celle 'du tronc commun des lois interéssés par le litige'".

99) Loquin, Où en est la Lex Mercatoria?, in: Leben/Loquin/Salem (eds.) Souveraineté Étatique et Marchés Internationaux à la Fin du 20ème Siècle - Mélanges en l'honneur de Philippe Kahn, 2000, 23, 38: "Les parties peuvent en effet restreindre la méthode comparative à l'application des règles communes aux ordres juridiques intéressés par le litige".

100) 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.

101) 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 ...".

102) See Lando, Some Features of the Law of Contract in the Third Millenium, Scandinavian Studies in Law 2000, 343, 401.

 

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