Abstract:

Lex mercatoria is described as a body of rules which constitutes an autonomous legal system independent from national laws and international law. As its name implies, it dates back to an old body of law which took its form in the Middle Ages as a common legal system for the disputes between merchants who traded across Europe. The ‘new’ lex mercatoria, by proponents of the theory, is offered as a solution towards the demands of society of merchants for a legal system which responds to the needs of the modern international trade better. Opponents of the theory, on the other hand, attack on it arguing that it lacks essential features to be defined as a proper legal system. Leaving the theoretical issues arising out of this discussion, arbitration is a tool employed to prove existence of lex mercatoria and at the same time employed to develop it. In this article, basic features of lex mercatoria will be summarized. Then the problem of the law applicable to the merits in arbitration which is the unique ‘forum’ for lex mercatoria will be explained. Finally, some arbitral cases in which lex mercatoria was applied as substantial law will be illustrated.

Keywords: