Theorizing Transnational Commercial Law

Article excerpt

Over recent decades we can see the emergence of a new transnational commercial law. It consists of international conventions, model laws, and statements of principle (or standards). A recent compilation consists of some sixty instruments divided into twelve subject areas as diverse as contract law, electronic commerce, sales, agency and distribution, international credit transfers and bank payment undertakings, secured transactions, cross-border insolvency, conflict of laws, international civil procedure, and international commercial arbitration.1 Even this comprehensive collection is not exhaustive, as will be evident from later discussion.

The new transnational commercial law is driven by international institutions ranging from UNCITRAL, UNIDROIT, and the World Bank; regional governmental or economic bodies like the European Union or MERCOSUR; specialist international bodies such as the Basel Committees on Banking Supervision and Payment and Settlement Systems, and the International Organization of securities Commissions (IOSCO); and industry bodies such as the International Chamber of Commerce (ICC).2 There is a great deal of overlap in the application of their work in practice. Take, for instance, the area of transnational financial law: the Financial Stability Forum brings together national authorities responsible for financial stability around the world. In order to further its aims, the Forum advances a compendium of twelve key standards concerning transparency of policy making in the financial system, sound institutional and market infrastructure, and adequate financial regulation.3 The standards are drawn from a range of international bodies, including the International Monetary Fund (standards on macroeconomic policy and data transparency), the World Bank (insolvency and credit guidelines), Organisation for Economic Co-operation and Development (principles of corporate governance), the Basel Committee, IOSCO, and Financial Action Task Force on Money Laundering. As well as providing a fine overview of the area, Professor Mario Giovanoli has argued that the new transnational financial law is mainly stand-alone "soft law," independent of any international framework of binding legal rules and sometimes lacking the degree of precision indispensable to a legally enforceable rule.4

In addition to classifying the new transnational commercial law according to its subject matter or institutional source, one may classify it by the juridical nature of the instrument. Thus it is possible to divide transnational commercial law into principles (or standards), model laws, and international conventions. A very longstanding set of principles is the Uniform Customs and Practice for Documentary Credits, first published by the ICC in 1933. However, such principles of transnational commercial law extend well beyond trade. The well known UNIDROIT Principles of International Commercial Contracts are mentioned at greater length below.5 The standards collected by the Financial Stability Forum have been referred to. In the area of dispute settlement there are the ALI/UNIDROIT Principles of Transnational Civil Procedure." The lex mecatorla is more difficult to identify, as we shall see, but it consists of principles like good faith, reasonableness, the duty to negotiate, set-off, and the obligation to compensate on expropriation. Among the model laws of transnational commercial law-a second category of instrument-are those of UNCITRAL, which now has Model Laws on International Commercial Arbitration, Cross-Border Insolvency, and International Credit Transfers.7 The model laws used by bodies like the World Bank and IMF in their technical assistance work are not always publicly available nor are records of which countries have adopted them and in what form. In effect, these World Bank Model Laws extend beyond the financial sector to matters such as insolvency and security. As to international conventions relating to transnational commercial law, these began in the first part of the twentieth century. …