The Lex Mercatoria: an open door to legal insecurity?

The Lex Mercatoria: an open door to legal insecurity?

 According to mercatorists, the lex mercatoria is a set of international commercial norms, with the particularity that the legal rules composing the instrument are autonomous and independent from the State. Therefore, the regime of applicability of the lex mercatoria bears witness to the independence of the law merchant from any influence of the State.

 

A) The Lex Mercatoria in the Conflict of Laws

The lex mercatoria can be applied to a dispute in two ways.

Firstly, the application of the lex mercatoria to a contract can be explained by the will of the parties. Indeed, the parties can mention expressly their will to administrate their relationship by the law merchant, excluding so the possibility of a particular State to govern the contract. Besides, the parties can also opt for the law merchant in a complementary way in the case where the national law would not be complete enough. Obviously, one could easily recognize the fact that in the international commercial world, the application of the lex mercatoria is often more desirable, especially in presence of a multinational contract. Indeed, the regime of the lex mercatoria has the virtue of proposing large solutions, which are more inclined to be accepted by actors from different counties.

Secondly, the application of the lex mercatoria to regulate the parties’ relationship can be the result of the will of the arbitrator. It must be noted that the arbitrator is capable of applying the Lex Mercatoria to a contract, even if the parties had expressly indicated their will to see a particular national law to settle their relationship. Indeed, the arbitrator can decide to go against the parties’ will when he has the conviction that the lex mercatoria is more appropriate in the special case.

As a consequence, a prima facie it seems clear that the arbitrator has a large autonomy in the sense that he can apply the lex mercatoria without being interrupted by any State authority. But in second thought, we could question whether such a mechanism is compatible with the conventional positivist choice-of-law approach.

Further, we could question whether it is an optimal method to regulate the international commercial transactions. Indeed, at first sight it seems clear that “by avoiding choice of law rules, law merchant avoids the costs necessarily involved in choice of law”

[1]. However, by giving such a power to the arbitrator, how could we deny the presence of a considerable legal insecurity?

 

B) The Challenge of Applying the Lex Mercatoria

Admittedly, it has been stated that the application of the lex mercatoria compromises not only the choice of law rules but also the competence of domestic courts. Indeed, the lex mercatoria is considered as a set of legal rules completely disconnected from the State.

However, if the power of arbitrators reveals a divorce with national laws, the enforcement of the lex mercatoria proves the opposite. While mercatorists see the lex mercatoria as being “stateless” and “a-national” due to its independence from the State, in fact such a theory can be questioned. Indeed, it is clear that there is dependence of the lex mercatoria to the domestic laws as far as the State only has the ability to recognize and to enforce the arbitral awards. Thus, even if the parties have expressly opted for the lex mercatoria to regulate their contract, its application will not be effective without the intervention of the State since it holds the monopoly on violence. As a matter of fact, arbitrators will be reluctant to apply the lex mercatoria when the rules embodied in the instrument threaten the fundamental interests of a State. In such a situation, it is obvious that states will not recognize the arbitral award. Thus, it is doubtful to consider the lex mercatoria as being truly autonomous and independent since it needs a domestic law to validate and to enforce the arbitral decision. Moreover, one may wonder how the lex mercatoria could be considered as an effective body of rules when it does not have any nationality. As a matter of fact, such an instrument is not capable of dealing with purely national aspects of contracts, while some of them could be extremely important. As an example, the lex mercatoria is certainly and without any doubt not adapted to settle a dispute with regard to the consent and fraud in the making of a contract.

Consequently, even if the lex mercatoria can avoid the choice of law rules, one may affirm that such an instrument is in fact both incomplete and imperfect.

 

c) Conclusion

The fact that the lex mercatoria intends to transcend the State is a contentious subject. Indeed, when it has been stated that the lex mercatoria has been created to solve the inefficiency of national laws, we have proved that the lex mercatoria was as inefficient as them. Due to its lack of consistency, predictability and authority, it would be more correct not to call it lex mercatoria, but rather a body of principia mercatoria

Furthermore, it seems clear that in fact the real lex mercatoria includes both national and a-national elements. In this way, the lex mercatoria should not really be seen as a threat for the State but rather as “an emerging global commercial law”[2]. Moreover, Ralph Michaels is of the opinion that: “A law without a State is merely the counterpart of a law within the State. Ironically, such a conception does not weaken the importance of the State for the law, but strengthens it”[3]. Indeed, in every globalized system, States have always maintained control; the Internet is an excellent example.

 

[1] Michaels R., ‘The true Lex Mercatoria: Law Beyond the State’ (2007) 14(2) Indiana Journal of Global Legal Studies, p. 463

[2] Michaels R., ‘The true Lex Mercatoria: Law Beyond the State’ (2007) 14(2) Indiana Journal of Global Legal Studies, p. 447

[3] Michaels R., ‘The true Lex Mercatoria: Law Beyond the State’ (2007) 14(2) Indiana Journal of Global Legal Studies, p. 468

2017-04-26T01:59:56+00:00October 24th, 2016|Non classé, We share|