Lex Mercatoria

In the field of international banking and finance, domestic laws are frequently inapt to provide workable and practicable solutions for international business. Consequently, these areas are dominated by uniform "private" rules drafted by industry experts rather than domestic legislatures. Prominent examples are the Uniform Customs and Practices (UCP) for Documentary Credits published by the International Chamber of Commerce (ICC) or the voluminous Master Agreements drafted by the International Swaps & Derivatives Association (ISDA) or by the Loan Market Association (LMA). These agreements establish the rights and obligations between the parties in a comprehensive and exclusive manner. Even though they contain choice of law clauses, these master agreements are, as much as possible, detached from domestic laws. By using these standard contract documentations, the parties create their own rules to govern these complex and highly sophisticated financial transactions. 

It is not surprising, therefore, that it is particularly in the field of international banking and finance where the existence of transnational legal rules and principles ("Lex Argentaria") is frequently claimed. In fact, a court in the Canton of Zurich, Switzerland has qualified bank guarantees on first demand as an institution of ‘the transnational lex mercatoria’ (Bl.Zuerch.Rspr. 1986, No. 23, at 44).

Lex Argentaria is a sub-category of transnational commercial law, the New Lex Mercatoria. The TransLex-webplatform, which is operated by the Center for Transnational Law (CENTRAL) at Cologne University, Germany, provides a compilation of over 130 principles and rules of transnational commercial law ("TransLex-Principles") together with thousands of comparative law references as well as detailed information on the historic origins and current status of the New Lex Mercatoria.