Melbourne Law School - Theses
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ItemIn search of the proper law in transnational commercial disputes( 1989)For nearly two thousand years, merchants have transcended national boundaries in the pursuit of trade. Although their endeavours led to the accumulation of great wealth, disputes arose among commercial trading partners. Accordingly, the nature of business required the establishment of a judicial system by which merchants could resolve commercial disputes in an expeditious manner, free from local prejudices and local rules. For several centuries, both goals were achieved. Trade that was conducted throughout the Mediterranean, and later the Atlantic, was governed by the lex mercatoria or the law merchant. This often unwritten group of customs imprinted an international standard upon traders from various nations. The law merchant continued to thrive during the medieval era as applied in the Italian city-states and medieval fair courts within England and the Continent. With the rise of nationalism in the seventeenth and eighteenth centuries, the law merchant was absorbed into both the common and civil law. Likewise, the fair courts of the medieval era and similar tribunals became obsolete as commercial disputes became subject to the formal procedures of traditional courts of law. Even arbitrations were subject to strict judicial review within the common law, although practices in the civil law were less taxing. The rigidity and protracted nature of traditional civil litigation disrupted the interests of merchants desirous of both fair and prompt treatment which resulted under the law merchant. Within the past half century, the interdependence of the world economy and the interests of merchants have highlighted a need for institutions and rules that can enhance the development of international commercial relations. As more commercial transactions become multinational in scope, a parallel responsibility is laid upon jurists, commentators and legislators to institute changes that reflect the transnational nature of business relationships. One practice that has come to the forefront in establishing anational rules for international commerce has been in the area of commercial arbitration. As in the days prior to the incorporation of the law merchant into the common and civil law, these modern international arbitral institutions are resurrecting and re-evaluating the law merchant. This minor thesis argues that, as in modern international arbitrations, national courts of law, within certain restraints, should expand their use of and reliance upon business customs or trade usages when resolving international commercial disputes.