Lex Mercatoria, a medieval tale...

Since this blog is pretty much dedicated to commercial law and this is my first post I thought I'd start with a simple history lesson; especially in common law jurisdictions, legal evolution essentially shapes the contemporary aspect of any legal field.

A quite long intro (with quite a lot of lyricism)

Many aspects of our lives changed over the last three centuries; from the legal invention of limited liability and the shift from partnerships to new commercial company models to the constant technological advancement that started with the two industrial revolutions. Later on, the invention of the internal combustion engine and finally during the last 10-15 years with the rise of the internet and the age of economic globalization. With all those empirical evidence it is not weird for someone to assume that commercial law is an invention of capitalism to facilitate its vast different needs in comparison to the feudal society of the medieval times.

If we look back before the rise of the modern enterprises, the invention of the stock-market and the move from liveries to the modern industry we will find something familiar; Lex Mercatoria, the predecessor of contemporary commercial law.

So what is this Lex Mercatoria?

Lex Mercatoria, literally translated as merchant law, was a custom law containing trading and best practice rules could be described as the international commercial law of the medieval times (especially in respect to arbitration and dispute resolution).

Even by this minimal definition we start to see similarities it has with its contemporary counterpart; the main on being that it was of commercial nature. On the other hand Europe was quite a different (and a bit horrible) place to live during the medieval times; wars and invasions that constantly changed the borderlines, famine, the black death and the occasional highway man were but a few things a man of commerce had to deal with at the time. But even at those difficult times commerce flourished.

Thus the need for a system that will resolve injustice and disputes was needed...after all time was money and constantly new trade roots were discovered providing wealth to those who ventured them (e.g. Marco Polo that opened a trading route with China and incorporated past into the Italian culture)

Thus in many of the major trading routes tribunals where established with justice being administered by the merchants themselves (and usually no state interference). It could be truly called international as the custom rules that operated in the tribunals where pretty much common in most European countries making sort of one of the first international tribunals.

Another interesting fact was the use of the legal maxim ex aequo et bono to decide the cases presented in front of the tribunal. The maxim is literally translated as "according to the right and good" meaning that the cases where resolved with consideration of what was fair and good solely on the facts of the case drawing from the theories of natural law.

Hope you enjoyed our journey to the medieval times as much as I did...

Further reading (I omitted quite a lot like the link between the Lex and common law)

  1.Wikipedia on Lex Mercatoria (I know linking wikipedia, shame on me)

2.Nikitas Hatzimihail, "The many lives-and faces-of Lex Mercatoria: history as geneology in international buisness law", University of Cyprus  2008

3.Volckart & Mangels, "Are the roots of the modern Lex Mercatoria realy medieval?",SEJ 1999 (a comparison of modern and medival Lex Mercatoria) can be accesed through Nora electronic databases>Jstor

Enough with my rumblings have a nice weekend every one and good luck with the next essay title....

ps. I know this was a long post, lacking in coherency but I'm still trying to adjust to the fact that this is nor an essay nor my facebook page.