Lex Mercatoria, International Arbitration and Independent Guarantees: Transnational Law and How Nation States Lost the Monopoly of Legitimate Enforcement

Abstract

This article examines the relationship among the new lex mercatoria, international commercial arbitration, and independent contract guarantees. It will try to show that, from a substantive viewpoint, an international contract may be governed solely on the basis of the lex mercatoria, without reference to national law. It will also attempt to demonstrate that, from a jurisdictional point of view, a dispute regarding a contract governed by the lex mercatoria may be resolved by arbitrators, without reference to any national law or court. Finally, the article will attempt to show that parties to a contract may also agree on an independent contract guarantee as a warrant for the execution of the award. Hence, the arbitral award may be enforced without the intervention of a national court, and without reference to national law. In this regard, this study will discuss whether we are in the presence of a new truly transnational legal system that is independent from the national legal order, since not even at the enforcement stage would assistance from the nation-state be required. This study will conclude by considering the impact that this situation produces in the general theory (and practice) of law and state, particularly regarding the quest for the democratic legitimacy of the transnational law-making process.

Keywords: Lex Mercatoria, International Commercial Arbitration, Demand Guarantees, Trasnational Law, Legitimacy

JEL Classification: K33