Searching for China’s Lex Mercatoria through Commercial Dispute Resolution

Abstract

This article aims to take stock of where we are, how we got here, and where we are heading with regard to lex mercatoria in Chinese commercial dispute resolution proceedings. Based on qualitative evidence and supplemented by quantitative data, we found that lex mercatoria is hardly used in China, both in the adjudicative and arbitrative decision-making process. We examine multiple potential explanations and argue that state-embedded adjudicative structures as well as Chinese cultural inclinations and philosophic learnings limit the application of lex mercatoria in Chinese dispute resolution settings. We do acknowledge that the characteristics of lex mercatoria itself prevent or discourage its application. However, we conjecture that philosophical, political, and socio-economic ideology and movement shape disputing parties’ preferences. In the past decade, China’s rising new economic organizations such as Free Trade Zones and Belt and Road Initiative influenced the development of new commercial customs and norms, offering a fertile ground for the emergence of a lex mercatoria with Chinese characteristics.