Lex Mercatoria: Reflections from an English Lawyer

Abstract

This article looks at lex mercatoria from the point of view of the author as an English lawyer, and considers whether the lex mercatoria is relevant to cross-border contracts: and in particular whether it is relevant to international commercial arbitration. The concept of a law merchant ys not unknown in England: English courts dating back centuries have administered such a system of law. Has the medieval law merchant given way to a 'new' lex mercatoria? And if so, does it exist as a separate system of law capable of use in cross-border commercial disputes? Reference is made to the Mustill view of twenty-five years ago and to the changing attitude of the English courts: in the 1920s hostile to the lex mercatoria, but giving way by the 1970s to an acceptance of the use of the lex. That process was effectively recognised in the English Arbitration Act of 1996, which permits arbitrators — if the parties so agree — to decide a dispute 'in accordance with such other considerations as are agreed by them or determined by the tribunal.' The decisions of English courts after 1996 make it clear that, in England1 lex mercatoria can be a choice of law, but cannot be used for conflict of law purposes. Other anational systems are considered: the UNIDROIT Principles and the UN Convention on Contracts for the International Sale of Goods (CISG). Mention is also made of the Transnational Law Database. Finally, following Lord Mustill's look at the first twenty-five years of the new lex mercatoria in the late 1980s, the article refers to the views of Professor William W. Park and others some twenty-five years later. Pragmatically, is the lex mercatoria of any relevance to international commercial disputes?