There are many attempts to define the subject. As an initial matter, the concept is to be kept distinct from notions such as ‘international business law’ or ‘international economic law’. In the book whose authors are teaching a course so titled since the mid-1990s it is introduced as follows:
‘Transnational commercial law consists of that set of rules, from whatever source, which governs international commercial transactions and is common to a number of legal systems. Such commonality is derived from international instruments of various kinds, such as conventions and model laws, and from codification of international trade usage adopted by contract, as exemplified by the Uniform Customs and Practice for Documentary Credits published by the International Chamber of Commerce and the Model Arbitration Rules issued by the United Nations Commission and International Trade Law (UNICITRAL). Legislative guides of the kind published by UNICITRAL and UNIDROIT are also contributing to the process of harmonization at international level. So too are ‘soft law’ restatements, such as the UNIDROIT Principles of International Commercial Contracts, which though not binding are regularly resorted to by arbitral tribunals and influence the shaping of domestic legislation in developing as well as ‘developed’ countries. Underpinning these is the lex mercatoria, consisting of the unwritten customs and usages of merchants, and general principles of commercial law.’
n the twentieth century, the laws managing global trade have been strengthened, codified and harmonised. Therefore, commercial law needed to change into a denationalised form to encompass all types of business regulatory issues of both private and public activities. To do so, several new features were included to make it appropriate according to the 21st century business trends. For example, the intellectual property law was added to secure the business interests of particular organization in the competent international business environment. International arbitration was used to remove the trade disputes among the involved countries in international trade practices. The commercial law at present is far different from the form which it had in its inception during the nineteenth century. The commercial law was mainly established in the nineteenth century. But prior to this it was used in the eighteenth century for marine insurance and shipping activities. During the initial stages, commercial law was largely applicable to marine business transactions. In such business, trading by sea was the most widespread commercial activity. Following the global revival, commercial law has witnessed the inclusion of new conventions, regulations and agreements related a number of business practices. Having been denied recognised market relationships with their own economies, several countries were determined to adopt the practices of the private commerce during the 20th century, while some others which did not find the most suitable and domestic laws preferred to practise the commercial laws which were followed in New York and England.
Similarly, many countries such as Europe and the US, the experts of law introduced many-sided regulations in the strategies and policies of the international commercial law. In these agreements, one of the most essential steps was harmonising and organising commercial law. For example, In Europe, there was an awareness of a great need to harmonise law towards the 1950’s. In that period Europe was experiencing great changes in economical, cultural and geographical aspects. All the member states of the European Union were experiencing a great competition in business practices. Therefore, a Design Directive was established by Europe at the end of the century to harmonise all the union’s commercial laws elements. In Europe an effort to harmonization of the commercial law was carried out for the protection of the intellectual property of member countries which were involved in international trade practices. Due to such endeavours made in Europe in commercial law, the transformation of the commercial law became a subject of international investigation. This much of endeavours were caused in Europe as intellectual property related issues were became a matter of serious concern during that time. This made business organizations to conduct their business as per the transforming commercial law. As a consequence, during 20th century these commercial practices like intellectual property rights became an important component of resurgence of commercial law.
Obviously, the transformation of these laws came in response to matters raised in relation to marine business transactional practices. Previously, merchant and maritime laws were not considered two separate entities in Europe. Example, In Europe, there was laws and codes for marine business transactions and international trade practices, which were acceptable regionally; however, in order to administer foreign commerce, the rules and laws were based on the customs and laws of that local area in all the states of Europe.
During the 20th century, several changes were introduced into the commercial law. In this period, just after WW2, there was a tremendous growth seen in international trade which increased the need for trade international laws. With rise in international commerce, business companies functioning in different countries experienced a great need to harmonise their commercial laws. For the expression of adjusted commercial relations among various nations, the need for bilateral treaties was deeply felt. This bilateral treaty was made in for the matters related to foreign direct investment. These treaties were made between the developed and developing countries to make their trade relations better. An example of this might be the movements which were taken into consideration in Western Europe to harmonise and unify business regulations and to achieve trade globalisation. Some changes in Latin America included the political and legal educations of law harmonisation were provided for business people. The main changes were tested by UNIDROIT to verify their appropriateness in the future business world. These activities which were followed in all leading nations engaged into international trade represent the resurgence process of commercial law occurring throughout the last century.
Another crucial development in the international trading law was the launching of the multinational agreements like the UN (United Nations) and the economic improvement in the collaboration and partnerships between the different member states. For instance, in 1960, Europe was the only market for global trade and similarly, in 1980 a Free-Trade Zone was founded by Canada and United States. Then, in 1990, a tripartite agreement involving Canada, United States and Mexico on free trade was launched. This way several trade related changes were made in the major countries during resurgence of commercial law.
The major functional areas of international commercial law in the twentieth century are commercial customs and practices, which were maintained by the International Chamber of Commerce. The ICC as an early establishment of the twentieth century, regulated trade practices and customs at that time. Moreover, those rules were included in all types of business contracts and were also occasionally altered due to evolving trading realities in the twentieth century.Another change related to international trade was invention of Hague rules which were made for the unification of the several rules. These rules were related to sea and inland waterways related transport facilities. Countries which were engaged into international trade practices altered their business agreements to suit the Hague Rules. Accordingly, these developments marked the resurgence process of commercial law during this period where a major part of the trade practices was administered according to these rules. Similarly, the Hague Rules witnessed considerable amendments and were reformed into the Brussels Protocol. Later, the practices of these modified rules were to be transferred in to the commercial practices at the international level. Moreover, the Rotterdam Rules were another modification taken into consideration in the commercial law during this period. All the above rule modifications were passed to have similar business impacts on the international trade practices.
In terms of trade law aspects, the majority were governed according to British Law. In fact, British trade practices were historically known for their effectiveness and appropriateness to govern international commercial law. For example, it introduced first the financial and banking systems considered among supportive measures for international trade practices. There were major developments in the British trading practices in the 19th century with the Bill Of Exchange Act being pioneered in the year 1882 to maintain common trade practices worldwide. Having applied these practices, all international transactions between different countries engaged into international commerce were managed within this empire.
Clearly, in taking these aspects into account, the resurgence in commercial law during the twentieth century was very efficient. This resurgence was followed by various effective measures and rules related to the commercial laws. As a result, the commercial law in the twenty first century would be developed as a global commercial law applicable universally.
Given the resurgence of commercial law during twentieth century it is helpful to examine its suitability in the global business environment as well as its challenges in the 21st century. This has been covered in the next section of the essay to access the effectiveness of resurgence of commercial law.
International trade laws followed at a very limited level in previous century has been transformed into global business world. Accordingly, the commercial practices will also be changed to cope with the pace and scale of the new century. Therefore, harmonisation of the commercial law and intellectual property rights will have great ramifications and effects on the global business practices of the present days. On a global level, due to the world becoming very competitive, the protection of intellectual property rights is essential in cross border business transactions.
As such, an important issue in international trade in the twenty first century is property rights. The enforcement procedures against parties or countries involved in the business are crucial factors for international trade to work globally in a harmonised fashion. To ensure this, the rights of parties involved in the business transactions at the international level should be protected and acknowledged.
Despite the various new challenges witnessed by the global international trade in the 21st century, the resurgence in transnational commercial law in the previous century is enough to effectively contain these challenges. To start with, international arbitration has been an effective procedure in commercial trade for several centuries resolving disputes on the international stage since businesses of one country run many branches in large number of nations worldwide. For example, the British Empire, which was a centre of trade, also applied international arbitration in its trade practices during 20th century to solve trade related disagreements.
Another suitability of the resurgence in the 21st century global commercial law was the international arbitration of the intellectual property. This became an important point of international commerce in global business. International arbitration became an established procedure in resolving disputes in international trade practices mainly focusing on disputes among sovereign countries with overseas investors at a time when globalisation started to expand; thus, opening new markets for foreign investors. Soon after, international arbitration was undertaken by many bilateral investment treaties in the globalised business environment to manage disputes in international trade through a process of integration being forced to enhance these practices.
According to some economists of the twenty first century, providing international arbitration would ensure a dominant role in running international trade practices. Therefore, arbitration has an international implication nowadays as business organisations experience different trade clashes following the opening of new branches worldwide. For instance, dispute resolution with regards to international trade was conducted by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. During this convention, the arbitral awards were made easy worldwide. Thus, international arbitration is a suitable procedure emerging during the resurgence of commercial law in the twentieth century and continues to be so in the global business environment of the twenty first century.
Electronic commerce is a further development in commercial law in the twenty first century. In order to settle this issue, internet trading can be an effective method. Early in the 20th century, telecommunication technologies evolved making it easy to access foreign markets through investments, which were based on regulatory trading compliance. Towards the end of the twentieth century, online trading systems have been part of international trade, which was considered legal in the practices of commercial law. E-commerce or online trading has been flourishing in this millennium because of the implication of information technology aspects in all the fields of business.
In the series of the discussion of suitability of the commercial law in the 21st century the intellectual property rights are viewed as most significant aspect. Intellectual property rights are a major feature in the current business circumstances for the protection of practices and processes which have become crucial requirements for the globally operating firms. Through this law, intellectual property rights can be protected from being violated by competitors. During 2000, the rock group Metallica took legal action on Napster website for violating their copyright. Metallica argued that its music copyrights had been breached by several universities through illegal browsing.
Generally, any copywriting of the specific work made by any trade company was restricted by the law in commercial laws of the twentieth century. For example, some acts for the protection of the intellectual property came into existence during the reign of the British Empire. Among these acts are the Patent Act of 1977 and the Trade Mark Act of 1994 as well as the Act of Registered Design of 1949. The introduction of these acts during the previous century has greater applicability in the present international trade practices for its fair running as the current competitive market has several business insecurities such as harming of intellectual property rights. The fundamental change in trade practices required a perceived urgency to develop an IPR framework. Acts such as the copyright act, patent protection, and licensing acts are all constructively practised in the twenty first century global commercial laws, while the copyright act is currently seen as vital in the protection of trade practices in most countries as well as those parties caught up in the global race.
Supported by the intellectual property rights at the end of the twentieth century, licensing has become one of the most important practices in overseas business in the current century. Accordingly, some agreements relating to Internet trading and e-commerce formed the main basis for business dealings in 21st century. Interestingly, the IP law developed during this period was applicable to all types of properties including commercial, industrial and creative ones. One reason for all these property rights in the twentieth century is the emergence of internet trading as an alternative to existing trading practices.
Drawing on earlier discussion, the transnational commercial law of the twentieth century is clearly qualified to be implemented on a global stage in the current century since its main precepts such as arbitration, harmonisation and intellectual property are crucial in contemporary business practices. However, there are many challenging issues encountered while implementing these modifications including lack of harmonisation due to conflicting business regulations, technological developments and business disagreements.
Despite their advantages, commercial law practices are not welcomed universally and face tremendous challenges such as harmonisation, which is a great challenge for commercial trade practices at present. Due to diversified national laws, the implementation of the harmonized commercial law is becoming critical. In opposition to this, Ansel has argued that disparity in national laws is harming the requirements of economy of present century. The harmonization of law is done in a complete manner and it is not in an inclusive form. This is because on a particular subject, there is not any sole authority to handle it. There are certain limits of the authorities of law, beyond which they can not take any action. The concept of harmonization of commercial law is not a systematic one as there is no existence of any inclusive parameter for the commercial law with the European Union’s Directives. The undoubtedly, having diverse laws in different nations is a thorny issue in harmonisation. For example, the East European legal system has an internal coordination problem within some countries’ trading laws which are hard to be harmonised.As a result, commercial activities between nations are restricted. In addition, all countries have their own laws for running their own businesses. On the other hand, global businesses have to collaborate with international commercial laws to achieve harmonisation in which countries are required to adopt global treaties so that multilateral business practices can be administered by the parties involved. Since there is some fierce competition between countries, harmonisation of their differing laws and trade practices can be a major hurdle for total harmonisation. Due to this the harmonization of the different types of commercial laws has become and essential and basic requirement of the international trade. This is because with the implementation of the unified commercial law various types of business costs such as transportation cost and cost charged for facilitation of the business activities around the world would be reduced to a certain extent.
Another serious challenge for global commercial laws is arbitration because some nations have their own business regulations which can conflict with other global trade practices. Normally, international arbitration considers the similarities as well as dissimilarities in different regulatory systems around the world. With different developments in telecommunications and computer networking, the international commercial arbitrations are required to change into a digital format. Since international arbitration was established to settle trade disputes between nations involved in international trade, there is an urgent need in the 21st century to reform the arbitral process because trade practices such as sales and transportation have started to take new shapes and include modern technologies. In order to meet the criteria of different legal global entities, international arbitration needs to undergo certain changes in the composition of the arbitration process, agreements of the arbitration and control of the arbitral process.
Another change in the trade practices in the present century is the introduction of electronic trade practices. More recently, commercial practices have increasingly been combined with the internet and electronic technologies. Thanks to these technologies such as online trading, internet based communication among nations engaged into international trade, and a worldwide network involving multiple business organisations, ordinary trade practices are progressively taking an electronic dimension. However, incorporating and properly coordinating with such technologies can be challenging, while international commercial law needs to adapt by overhauling or amending its old practices. For example, e-bills and money transfers via electronic means are changing trade practices between nations. This is because online money transactions have made the countries to their business process faster. Consequently, legal procedures are essential for the best management of new practices. Undoubtedly, these are major tasks for the commercial law in the current business climate.
In essence, there should be some measures in place to effectively deal with these issues such as the ratification of the Lisbon Treaty where all EU member states should endorse the treaty prior to entering into the commercial law of 21st century. As for the most practical steps to ratify the treaty, parliamentary votes can facilitate joint decision making on any amendments to the law. In doing so, favourable decisions for all would be implemented in an appropriate manner. In spite of the uncertainties surrounding the implementation of this treaty in the EU, some of the provisions of the treaty such as ACP-EU are arguably expected to have positive effects on trade relations of the EU member states with foreign countries in trading worldwide. Regarding the Lisbon Treaty, trading in the EU would be changed positively, and so would trade relations of the member states with their trade partners. Therefore, the EU will ensure suitable trade practices, while embracing the relevant changes, challenges of the commercial law in the 21st century can be resolved appropriately.
In addition, several other changes can be noted such as new technologies, with information technology practices being involved in the trade such as use of internet in the communication process which should be followed by countries engaged into global trade like the views of the World Trade Organization. Eventually, this would facilitate the sharing of frequent changes in the trade practices between the many countries involved. Another positive move would see the participation of international shipping companies in the business practices, which can assist in the faster transport of goods and services on a global level. As a consequence, with the introduction of some new changes, the serious challenges within commercial law can be resolved constructively.
In the light of the previous discussion, the conclusion of the question of whether the commercial law will become global in the next century is summarized in the next section.
This is acknowledged with this descriptive essay that during the resurgence of commercial law in 20th century, there several new changes were implemented in the commercial law such as international arbitration, intellectual property rights and Hague rules. In the meantime, regional commercial laws of the countries practised codification progresses, while reformation of the commercial law took place with the introduction of several new elements in the transnational commercial law. As a result, harmonisation of different nations’ commercial laws went into practices effect during this century. In addition, international arbitration was also implemented at that time to resolve trade disputes raised during transactional trading practices. Since levels of simultaneous involvement of various nations in the same transaction are generally high, the chances of internal disputes are similarly likely to rise.
From the topics discussed in the above sections of the essay related to commercial law some findings have been observed. One of the most conspicuous findings in response to the question related to development and resurgence of commercial law in the twenty first century is technology adoption. Transnational trading laws can be employed efficiently in modern times with the introduction of computer network based technologies in the trade practices. On a global note, intellectual property rights have become an essential requirement for international trading practices. With the emergence of IPR, disputes between nations can be resolved without having to depend or be needy for international arbitration.
Contrary to the 20th century where several changes were introduced into commercial law to make it applicable for business dealings on the global scene, in the twenty first century trade practices have become much more globalised as all the companies are favorig to go into international business. Therefore, transnational commercial law has proved its suitability to be practised in this modern age of global business. The transformational commercial law does not have full suitability with current international business requirement. It requires further transformation so that hurdles encountered during the process of implementation can be overcome.
In relation to the basic theme of the essay, it can be concluded that major changes made in transnational commercial law during 20th century are found suitable for fulfilling the requirements of the global business practices of the 21st century. Several barriers of trade have been solved with that resurgence process. The volume of transnational trade is rapidly and increasingly moving forward in the present century where economies of different nations are being integrated and reforming in accordance with the global business system. As per the assessment of the business practices in present century it is observed that further resurgence is also required in translational commercial law to meet the new business challenges of global commercial practices. With new changes in the transnational commercial law the new century will have a fully suitable transnational commercial law to meet the objectives of global commercial practices.