Definition:
Lex mercatoria also known as the Law Merchant [Es: ley mercante or ley del comerciante] (international commercial law) = originally referred to the body of commercial (trade) law used by the merchants during the European medieval times. The original Law Merchant has been developed by merchant courts resolving disputes between merchants resulting into a privately produced, adjudicated and enforced body of law that governed every aspect of the commercial transactions around Europe. It has evolved into a system of customs and best practices, functioning as the international law of commerce. The modern Law Merchant is subject to conflicting views, some arguing that it is too vague and general to provide meaningful guidance to involved parties.
The most famous collection of published rules and principles of the lex mercatoria are the 15th century Catalonian compilation known as The Consulate of the Sea and the Llittle Red Book of Bristol from the 13th century that also contains the famous Incipit lex mercatoria, que, quando, ubi, inter quos et de quibus sit. A modern and more familiar expression of lex mercatoria can be found in the Disney film series Pirates of the Caribbean, where the ‘Code of Brethren’ is repeatedly invoked – the Pirates’ Code – which represented a set of principles and rules enforced by the pirates, governing the behaviour among pirates.
Lex mercatoria has different meanings:
- an autonomous legal system (ordre juridique), spontaneously created by the parties involved in international economic relations, existing independently of the national legal systems;
- a set of rules meant to solve a dispute, acting as an alternative to national law;
- gradual consolidation of international commercial practice that could be used only in addition to the national law and not instead of the national law applicable to the contract.
The legal doctrine has determined that lex mercatoria is based on two categories of principles:
- those that refer to the loyalty in international trade contracts such as estoppels, contra preferentum, good faith, obligation of cooperation and so on and
- those referring to the efficiency of the international trade contracts such as pacta sunt servanda, renegotiation in case of hardship and so on.
Lex mercatoria is functioning independently of the legal system if the performance of the contract is voluntary and there are no misunderstandings between the parties. In case of disputes, the law merchant can be applied only with the intervention of the state: the choice of lex mercatoria as the applicable law to the contract is allowed by the state according to the principles of the autonomy of the will and freedom of contract.
Useful links:
Legislation
https://www.unidroit.org/instruments/commercial-contracts/unidroit-principles-2016 - UNIDROID Principles [English]
Case Law
http://www.romanianarbitration.ro/?p=566 – Arbitration Court, Romania, Judgment no. 251/2005, case no. 324/2004 [Romanian]
http://newyorkconvention1958.org/index.php?lvl=notice_display&id=118 – Cour de cassation, France, Case no. 83-11.355, Société Pabalk Ticaret Limited Sirketi v Société Norsolor, October 1984 [English]
http://maritimelawdigital.com/uploads/HTML/Lickbarrow_Mason_1787.htm - Lickbarrow v Mason ((1788), 2 T. R. 63 and (1794) 5 TR 683)
https://www.trans-lex.org/11/_/examples/ - Examples of arbitral awards regarding the application of Lex Mercatoria
Publications
Tuleașcă L., Dreptul Comerțului Internațional. Tranzacții Comerciale Internaționale, ed. Universul Juridic, București, 2017 [Romanian]
Ungureanu C.T., Dreptul comerțului internațional, Ed. Hamangiu, București, 2018 [Romanian]
Online Publications
Baron G., Do the UNIDROIT Principles of International Contracts Form a New Lex Mercatoria? In Arbitration International, Vol. 15, no. 2, 1999, retrieved from https://www.cisg.law.pace.edu/cisg/biblio/baron.html [English]
Berger K.P., The Concept of the Creeping Codification of Transnational Commercial Law, retrieved from https://www.trans-lex.org/4 [English]
Berger K.P., The Lex Mercatoria (Old and New) and the TransLex-Principles, retrieved from https://www.trans-lex.org/the-lex-mercatoria-and-the-translex-principles_ID8 [English]
Gaillard E., Transnational Law: a Legal System or a Method of Decision Making? in Arbitration International, Vol. 17, no. 1, 2001 retrieved from https://www.arbitration-icca.org/media/4/16644703895537/media012178525391230transnational_law_eg.pdf [English]
Lando O., The Lex Mercatoria in International Commercial Arbitration, in International and Comparative Law Quarterly, Vol. 34, Issue 04, October 1985 retrieved from https://www.jstor.org/stable/759197 [English]
Stephen E.S., The Law Merchant and the Fair Court of St. Ives, 1270-1324, Harvard University, Cambridge Massachusetts, 2002, retrieved from http://www.stevesachs.com/papers/paper_thesis.html [English]
Ungureanu C.T., Lex Mercatoria in International Trade Contracts, in Analele Științifice ale Universității „Alexandru Ioan Cuza” Iasi, Tomul LXII, Științe Juridice, nr. I, 2016, retrieved from http://pub.law.uaic.ro/ro/volume-publicate/2016/anale-uaic-tomul-lxii-stiine-juridice-2016-nr.-i/drept-privat/carmen-tamara-ungureanu [Romanian]
Practical use
European Commission, Green paper on the conversion of the Rome Convention of 1980 on the law applicable to contractual obligations into a Community instrument and its modernization /* COM/2002/0654 final */ [English]
Lex Mercatoria Online - https://www.jus.uio.no/lm/ [English]