More about these two famous cases in Sect.10.6.4.
The rules that stem from the EU do not only bind the Member States but also
their legal subjects. Moreover, these European legal rules have precedence over the
states’ domestic legal rules. As a consequence, the Member States of the EU and
their legal subjects are bound by a legal system that is neither the system of a nation
state nor a system that regulates the mutual relations between nation states. In other
words, the existence of EU law does not fit in the Westphalian picture that takes
national states as its starting point.
1.7.3 Lex Mercatoria
TheLex Mercatoriais a set of rules created by merchants to regulate their mutual
dealings. In principle, commercial relations are governed by the rules of private
law, the law that deals with mutual relations between private actors. However, the
existing rules of private law were not always found suitable for the peculiar needs of
trade relations, and therefore as early as in the Middle Ages, a separate and
independent body of rules emerged. For the same reason, separate courts originated,
which had more expertise in commercial matters and which operated more swiftly.
Nowadays, there still exists a body of rules that govern international commercial
relations. This body consists of treaties, such as theVienna Convention on the
International Sale of Goods(1980), and also conventions that are not officially
binding but nevertheless exercise influence on the behavior of commercial partners
(soft law).
Soft lawconsists of rules which are not binding, but are nevertheless influential. A typical
example are theUnidroit Principles of International Commercial Contracts.Arbitration Moreover, disputes in commercial relations are often dealt with by
means ofarbitration, decisions made by persons who are not official judges but
whose decisions are accepted by the parties who invoke their services.
On arbitration and other forms of alternative dispute resolution, see Sect.13.1.1.
Because much of theLex Mercatoriaoperates outside the traditional framework
of national states and their relations towards each other and towards their legal
subjects, it also provides counterevidence to the exhaustive nature of the
Westphalian duo.
1.7.4 Transnational Law
The phenomenon that is illustrated by human rights, European Union law, and the
Lex Mercatoria, namely that there are many and important legal phenomena that do
not fit in the picture of law that arose after the Westphalia peace treaties, has
become known under the name oftransnational law. Transnational law might
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