History
The lex mercatoria was originally a body of rules and principles laid down by merchants to regulate their dealings. It consisted of rules and customs common to merchants and traders in Europe, with some local variation. It originated from the need for quick and effective jurisdiction, administered by specialised courts. The guiding spirit of the merchant law was that it ought to derive from commercial practice, respond to the needs of the merchants, and be comprehensible and acceptable to the merchants who submitted to it. International commercial law today owes some of its fundamental principles to the lex mercatoria. This includes choice of arbitration institutions, procedures, applicable law and arbitrators, and the goal to reflect customs, usage and good practice among the parties.
Goods and services flowed freely during the medieval merchant law, thus generating more wealth for all involved. It is debated whether the law was uniform in nature, was spontaneous as a method of dispute resolution, or applied equally to everyone who subordinated to it. The lex mercatoria was also a means for local communities to protect their own markets. Local kings or lords extracted taxes and set trade restrictions.
Read more about this topic: Lex Mercatoria
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