Concluding remarks
This book has shown that the legal authority of non-state rules does not fit into a traditional hierarchy of sources of law. The legal authority of non-state rules exists in the transnational sphere and in the domestic sphere. To determine whether non-state rules constitute a source of law we can look at the same criteria that establish what a source of law is: origin, process, reason, and substance. However, those criteria arc not in itself enough to measure the legal authority of non-state rules. For that we need to study the framework that gives them legitimacy. That is the domestic law in the national framework and the support of the business community and their application in courts in the transnational framework. It is especially the last factor, which plays a deciding role. By studying the application of non-state rules in state courts their legal authority in domestic law can be understood. Through understanding this legal authority in domestic law conclusions can be drawn with regards to their legal authority in the international community and thus in transnational commercial law. The discussion of the ways that the application of non-state rules measure legal authority ensures a new focus and fills in the gap in the wider debate. The analysis in this book of the application of non-state rules as a way to measure legal authority is thus an important piece of the puzzle in understanding that legal authority.
As non-state rules cannot be chosen as the law of the contract in most jurisdictions this leads to an easy conclusion that non-state rules play a marginal role in international commerce. However, it has been shown here that this is misleading as non-state rules are applied frequently. They are applied with some regularity in arbitration as the governing law, especially in state-company contracts, which often do not include a choice of law for a state law. Arbitration is of course commercially extremely valuable and
Ascertaining the legal authority of non-state rules 219 plays a key role in international trade. More regularly arbitrators apply nonstate rules in addition to the applicable law. The preference is often for the application of uncodified non-state rules (general principles of law and trade usages), but regularly tribunals choose the UPICC or other codified non-state rules to express these.
In addition, they are regularly applied as part of the applicable law. This happens first when non-state rules are used as contractual terms at the behest of the parties. The parties choose to include them in addition to the applicable state law. These can displace variable rules of commercial law and therefore take a leading role in defining the contractual obligations of the parties. Second, when they arc applied as a source of the applicable law. Third, when they are applied to interpret the law or the contract. This can be observed when there are gaps in the applicable law, when the applicable law proposes contradictory solutions, or even when the courts believe this to be necessary in order to facilitate international commerce. This happens regardless of whether they are included in the contract. As discussed, this way of using non-state rules is even observed with domestic contracts.
So, far from being marginal non-state rules occupy an important position in international commercial law and practice. When courts apply the lex mer-catoria, they often resort to codified non-state rules to go from the general principle to the practical application. One can question whether this is the right development because of the intrinsic differences between these two types of rules, but practical reasons ensure that this usage of codified non-state rules will continue. In the end this means that codified non-state rules will become a reflection of the lex mercatoria.
It can be concluded that non-state rules are pervasive in international commercial law and are at the core of international contracting. This shows that non-state rules should be given a more prominent place in the theoretical study and in the practical application of international commercial law. This work has examined the legal authority of non-state rules through a new lens by demonstrating the importance of application to establish this legal authority. It has demonstrated the different ways that non-state rules have legal authority and how this is at least partly determined by their application. They can have legal authority as the applicable law to the contract, as sources of (domestic) law, as legal doctrine/scholarship, and as terms of the contract. They can be considered as law, rules of law, contractual rules, and/ or normative practices.
1
The aggregate value of cases before the ICC solely already represented a value of S36 billion, an average of $45 million per case in 2018. (see: https://iccwbo.org/media-wall/ news-speeches/icc-arbitration-figures-reveal-new-record-cases-awards-2018/).
