Lex Mercatoria-Hoist with Its Own Petard?

I. INTRODUCTION The modern lex mercatoria is unlike any other field of law. People never tire of asking whether it exists. Debates over its existence and over its nature hinge largely on its supposed autonomy and, in particular, on its purported independence of national law on the one hand and of international law on the other. It is consistently presented as a third legal system, neither national nor international, whose claim to autonomy is anchored in historical precedent and founded on necessity. Discussions of the modern lex mercatona often present it as a revival of a familiar phenomenon-the mediaeval law merchant of Western Europe. This conjures up an idyllic image of an international community of merchants interacting on the basis of shared values and customs, independent of local borders and law-a kind of self-governing transnational community. It is this model of self-governance that the idea of a modern lex mercatona seeks to reinvent. The idyll arouses a number of associations. One is that relations between merchants were governed by a set of substantive rules that were different from the ordinary rules of general application. Another is that these rules were applied only in special courts. A third is that they originated in mercantile custom. Yet another is that they were, in some sense, transnational. A final association is the threat posed to these purportedly autonomous people, laws, and institutions by more general societal legal institutions-in short, the state-culminating in the swallowing up of the law merchant in the English common law and in the European commercial codes, and its temporary demise as anything more than a historical source of national commercial law. The modern trend toward specialisation may explain the fact that lex mercatona literature hardly ever mentions historical research into the mediaeval law merchant in England;1 people who deal with the law of international trade tend not to be legal historians. But the research is there. It suggests that the law merchant was not substantive, but rather procedural law, that it was neither transnational nor personal, that it was very probably not custom, that it was a part of local law, and that it was consequently never destroyed through incorporation.2 These matters are disputed, and there may be no similar ideas for continental Europe, but the lack of interest in the accuracy of what is presented as a foundational model is suggestive. For a long time, the existence of lex mercatoria, rather like the existence of God, seemed to depend largely on the will to believe. Much early writing on the subject was characterised by an ideological, almost mystical zeal. It was advocatory rather than descriptive or analytical. In this mode, a historical model only needs to offer ideal characteristics of the phenomenon that is advocated. It does not need to be more than an idea. Appeals to faith were traditionally bolstered by a pragmatic argument for reinventing this model that goes more or less as follows: national commercial law does not provide for many of the problems unique to international trade; in any case, national laws differ from one another and produce uncertainty; choiceof-law rules-the technique which replaced substantive rules of mercantile behaviour-simply refer to national law, and are themselves uncertain; and merchant autonomy is the best means of producing uniform rules that respond to mercantile expectations and needs. The literature advocating lex mercatona has periodically been enhanced by attempts to provide evidence of its existence and, at the same time, to make it more accessible by formulating-or codifying-its rules. One such attempt was a series of proposals to use international law as a tool for imposing uniform special rules for international trade.3 Others have been the formulation of nonbinding general principles of international commercial contract law by UNIDROIT,4 the Cornell Common Core project, the Lando Commission Principles of European Contract Law, the various ICC formulations and, finally, general lists of principles formulated by prominent scholars in the area of lex mercatoria such as Berthold Goldman,5 Lord Mustill,6 and most recently Klaus Peter Berger. …