Transnational Law: A Legal System or a Method of Decision Making?

Abstract

AFTER SOME 35 years of legal debate and coundess applications of transnational rules by international arbitrators since far before the debate over the concept even began,1 it may seem surprising that general principles of law – also frequently referred to as transnational rules or lex mercatoria 2 – remain such a divisive issue in the world of international arbitration. Publications on the issue are indeed just as passionate as they were when the phenomenon was first identified and labelled as lex mercatoria in the 1960s,3 or when it became more broadly acknowledged in the 1980s.4 A recent and challenging example of this ongoing interest is found in Klaus Peter Berger's contribution to the study of ‘The Creeping Codification of the Lex Mercatoria’ .5 It would be a mistake, however, to consider that the debate has gone around in circles, always dwelling on the same issues. On the contrary, it has been strongly renewed. Initially, the controversy focused on the very existence of rules other than those found in a given legal system, with the potential to be selected by parties and arbitrators. This solution was conceived as an alternative to the traditional choice-of-law approach which purports to identify, in international situations, the most closely related body of domestic rules to be applied to the case at hand. Certain scholars readily recognized and promoted the transnational rules alternative. Others, however, denied its existence; then, when confronted with the reality of its existence, challenged its advisability as an option available to the parties; and, when confronted with the wide acceptance of that option in practice, its availability as a choice open to arbitrators in the absence of any choice of law expressed by the parties. Today, this aspect of the debate has shrunk in scope to that last …