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Transnational business law
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Transnational business law
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chaptTransnational business lawwww.hcch.net/en/home
uncitral.un.org
www.unidroit.org
Introduction: what is international business law?
A) Transnational Law
Business transactions cross borders so the subject will be cross border business, transactions.
TBL is a phenomenon that belongs to the family of transnational law, we usually think of it as
transnational law. It’s a type of transnational law.
First of all, it’s transnational law:
- International transactions/relations (business or not) : ex. a family with person who don’t live in
the same country, who have different nationalities etc.
- These transactions happen web of legal frameworks/system:
o The system of each parties’ country
o International
The ones created by international conventions
But also, by the rules of customary international law
The division between national and international should not be overstated.
International law penetrates and influences national systems while national law…
Transnational law means different things:
- It’s a general description of the legal regime of an international commercial transaction: it
describes the domestic/national law
- It might be used as a label for the factual uniformity or similarity in contract laws applicable to or
contractual patternes used in international commercial transations. Maybe the rules, even though
they come from diferents sources, they all strive to achieve a major of uniformity.
Maybe transnational law refers to that facutal uniformity. The laws are convergent. The material
regime is uniform.
In the strongest sense of transnational law, might be used as commercial law.
Philip JESSUP (transnationalist profesor): “transnational law includes all law which regulates actions
or even that transcend naitonal frontiers. Both public and private international law are included, as are
other rules which do not wholly fit nto such standat categories”.
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, In that case TL is just a label for all legal norms governing international business contracts.
Transnational law= anactual uniformityor similarity frules and patterns.
In fact, international commerce is, to a growing extent, guided annd co’ordinated by such uniform rules
and aptterns?
This phenomenon of uniform rules serving uniform needs of internaitonal business and economic co-
operation is commonly labelled lex mercatoria.
TBL has to do with the concept of LM.
- A label for internationnaly uniform law I he proper sesne, bases on itnernational sources of law,
i.e., either on conventions (“internaitonal legilation”) or on customary law
- Commercial custom (not a legal source in a technical sens, but it has some imrotant functions
similar to those of a trus legal source)
Examples of international conventions can be found in the law of international transpotation of goods
by sea, air and land.
Int conventions ‘once signes and embodied in tgeurn national legal systems) will be an impt
itnernational source of uniform commercial law
Great advantage: clarity (bc written law) and is a suitable vehicle for imposing landatory rules of law on
the preosns to whom it is adressed.
Eg. The Hague-Visby Rules on Billes of Ladnins cannot be contracted out.
However there are drawback to the uniformity of I° conventions: the drafting, negotiatinf an ratification
procedure necessary to brong such conventions to life are very time consuming
International legislation, therefore, can be confined only to select and particularly impt legal
issues
There is a limited assitsnce in solving legal pbs of itnernational commerce. Only few principles, such
as pacta sunt servanda, which are generally recognised and can be termed internaional ustomray law
General principls of customary lax provide common ground of lawyers fron civil lax and common law
counvtries.
Courts in various countries have been extremely reluctant to resort to thoses rules.
What is (public) international law ?
Customary international law results from a egenral and consistent ractivce of states foloowed by them
from a sense of legal obligation
Unwritten law:
- Nations consent to it not through express agreements buut tacitly through practice
- 2 aprticularly impt examples of custom whithin transnational business law
o The rule sgvernin the expropriation of foreign ownbed proprerty
o The rules limiting “prescriptives” jurisdiction”
Eg. Customary international aw rules ocnerninf the expropriatio of foreign investiments central to
itnernational lawyers: if investors I not feel secure against sudden governemental incursions, they will
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,either decline to invest in a country or will do so only if they can count on a rate of retrun high eough to
couterbalannce that risk.
Theses rules were a sibject of considerable controversy during the twentieth century. The permanent
Court of I° Justice nted in 1928 that expropriations required “the payment of fair compensation”.
Customary I° law must be distingued from the “general principle” which refers to practices by states
with respect ti ther internal lawn as distingueshed from xustomwhich is behavior vis à vis ither states.
General principles have alrgely been referred to by international tribunals in relation to such issues as
estoppel and other procedural matters. If national courts would estop a complainent in a given case
an internationalcourt might do likewise.
Customary international law + treaties = ‘public international law”
What is Private International Law
Sometimes reffered to as conflict of laws. It refers to sthe rules for resolving private disputes having a
significant relationship to more than one jurisdiction/country (as legal system).
3 main topics:
- the juridisction of a domestic court, in the sense of its competence to hear and determine a
case (to take jurisdiction over a party or property indentified as foreign.
- Once of the Q of competence is sold, the Q of the appropriate rules of the system of law arises
(French or foreign). This is relevant for TBL because here the layers of domestic laws are
conflitcting. The private I° law is one way of dealing that complexity ;
- The recognition and enforcement of judgments rendered bu foreign courts
Conclusion::
TBL is:
- A good deal of domestic substantive law from the law of contracts (code civil) to antitrust law
- Domestic rules for mediate among national systems (the rules of conflitcts of laux o private i°
law)
Rules of “public I° law” found in traties ad iin customray law
Theses rules limitor influence the wayus which national governement regualte cross-borders
transactions andn relations
They may treat directly some topics usually governed by domestic law ( for example the CISG’ rules of
substative contract law)
B) Business Law
It has specificities.
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, Commercial law is not devised in the abstract but is a response to the practices and legitimate needs
of merchants.
It is mercantile practice that’s fashions commercial law
Mercantile practices evolve as a response:
- To impediments to trade, whether legal or practical, that has to be surmounted
- And to the driving force of competition as each enterprise strives to attract increased business by
developing new products
Eg. The bill of exchange was created by traders to make possible to transfer some money from a
place to another.
Eg. The bill of lading is also a creation of the practice of traders: a document or title issued by the
carrier to acknowledge receipt of cargo for shipment. On arrival of the goods at the end of the sea
transit, the carrie delivers them to whoever is the current holder of the bill of lading and presents it at
the port of arrival.
It gives ctrl of the goods to the holder of the document, who could transfer that ctrl b delivery of the bill
of lading and enable the buyer of the goods to resell them I transit or to borrow against them by
delivering the bill of lad to the buyer or lender un exchange for the transport which itself might be paid
by a bill of exchange.
In case of dispute, the courts are usually sensitive to the need to avoid damaging commercial
instruments that are fulfilling a useful legitimate purpose, if only because of the potentially adverse
effects this could have on the stability of the industry and on the attractiveness of the jurisdiction to
foreigners wishing no deal with its traders.
Approaches may vary from jurisdiction to jurisdiction.
- Many legal systems. have a commercial code, many others don not.
- In some, the applicability of the code is used as the determinant of the commercial nature of the
transaction
- In other, the function of the code is simply to provide rules governing some of the more impt types
of commercial transaction without thereby implying that other transaction are necessarily non-
commercial
In those legal systems that treat commercial law separately from civil law, the character of the
transaction may be determined
- Subjectively by the status of the parties as carrying on a business (commerçants, Kaufleute) or
- Objectively by reference to the type of transaction or activity (acts de commerce etc.)
- Or by a combination of the 2.
C) Transnational business Law
1. Historical approach: inherent transnationality of business law
Commercial law is probably as old as trade itself.
The code of Hammurabi (1900 BC) contained a number of rules of commercial law.
The Italians created the bill of exchange in the Middle Ages
From the start, trade was both local and international (and so was trade law). There is not so
much of a difference in practice between trade happening within borders and cross-borders in
terms of what happens. That what makes the concept of transnationality so relevant for
business law.
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