Lex Mercatoria in International Arbitration

Abstract

When parties agree that any dispute that may arise between them shall be referred to arbitration, in addition to the subject matter of the dispute, the determination of the applicable law is also of major importance. Although the parties may not have the liberty to choose the applicable law in national courts, this freedom has been granted to the parties in arbitration. The parties may choose that the disputes between the parties shall be resolved according to applicable laws of a national country or according to generally accepted principles, also known as lex mercatoria. It should be stated that the parties may also determine that applicable law to the dispute shall be the law of a national country and lex mercatoria. 1 Within this context, the definition of lex mercatoria and its close relation with arbitration, commercial rules and generally accepted principles should be evaluated.