The Transnationalisation of Commercial Law

Commerce always requires an institutional embedment. Basically, private Institutions as well as state institutions can provide the normative good of legal certainty understood as the enforceability of contractual commitments. While for domestic commerce, the balance between the importance of private and state institutions is almost equal, economic globalization leads to a decrease in the relative weight of public institutions and to a corresponding increase in the overall importance of private institutions for international commerce. This trend of internationalization and privatization of responsibility for the provision of legal certainty combine to what we call the transnationalisation of commercial law. Drawing on five case studies, in this paper we try to explain why today private institutions are of greater importance for cross-border transactions than state or multinational institutions. One the one hand, the first two studies show that there is no real practical need for multinational institutions for cross-border commerce. First, the modern information and communication technology strengthen the effectiveness of reputation-based mechanisms - relational contracts and reputational networks - for the safeguarding of cross-border transactions. Second, vertical integration in general and intra-firm trade in particular offer effective alternatives to market exchange. One the other hand, some private institutions can offer more than safeguarding commercial transactions as they can guarantee to a certain extent a respect of fairness and public policy issues. In maritime law, the third case study, it can be shown that private actors can achieve a fair arrangement for all stakeholders by allowing them to participate in the process of norm-formation in a transparent process. The fourth study in international commercial arbitration shows that international arbitration courts respect national mandatory rules and produce new transnational mandatory rules. However, the transnationalisation of commercial law leads to the trend of the vanishing trial: National Courts register less commercial disputes which does not come without cost. The fifth case study explains possible reasons for the decreasing number of commercial cases in German courts.