The Case For a New Branch of Lex Mercatoria in Trade Finance: a Dispute Resolution Perspective

Abstract

This thesis will argue for the existence of lex documentaria commercium as a separate branch of lex mercatoria in the area of trade finance, which is capable of providing an efficient framework for the regulation of documentary instruments. It will be shown that lex documentaria commercium conforms to the non-exhaustive criteria (identified through the analysis of similarities among other branches of lex mercatoria, such as lex Sportiva, lex maritima, lex informatica and lex petrolea) to be recognised as a distinct branch of the modern law merchant. In particular, it has its own unique principles, most notably the autonomy of a documentary instrument and the principle of strict compliance. There is also a leading private industry association, the International Chamber of Commerce (the ICC), which is responsible for trade finance regulation development, its global promotion and codification of existing industry practices. Moreover, the ICC attracts unconditional support from states and the international community for such activities. Of pivotal importance is that lex documentaria commercium can be consistently and coherently developed and applied through an industry-specialised dispute resolution service, the Documentary Instruments Dispute Resolution Expertise (DOCDEX). As will be demonstrated, conflict resolution in the branches of lex mercatoria has some unique features, such as reliance on past precedents, publication of dispute outcomes, significant dependence on existing and the development of new industry-specific principles, customs, usages and/or practices. DOCDEX, in addition to settling documentary instruments’ disputes exclusively on the basis of trade finance usages and practices, also encompasses all these features and therefore should be considered as the prime dispute resolution forum for lex documentaria commercium.