[1] “The quest for a third legal order stems from many jurists' conviction that neither municipal law nor international law is appropriate or suitable for dealing with international commercial disputes when parties from different countries are involved. In their view, a national legal system may not be sensitive to the expectations of a disputing party from a different national legal background, and international law proper may not be adequate to deal with cross-border commercial transactions. Thus, a third legal order, popularly known as the lex mercatoria, which is neither national nor international law but a mixture with the characteristics of both, is an attractive option. Although the lex mercatoriahad its existence at the dawn of human civilization' and was practiced widely in the Middle Ages,' it remained buried until recently when some scholars of international repute started advocating its suitability for application to modem international commercial relations.”

[2]“The historical lex mercatoria was not a single, uniform, essentially private legal system, but rather Jura mercatorum, the laws of merchants: bundles of public privileges and private practices, public statutes and private customs sheltered under the umbrella concept of merchant law by their association with a particular sort of supra-local trade and the people who carried it out. Some customary norms were similar over large areas; many were local or regional or even specific to particular trade groups. In addition, this was not a purely customary regime independent of local law and local courts but a hybrid creation dependent upon a scaffolding of legislation and intimately tied to local municipal and guild law.”

[3]" Transnational commercial law" is conceived as law which is not particular to or the product of any one legal system but represents a convergence ofrules drawn from several legal systems or even, in the view of its more expansive exponents, a collection of rules which are entirely anational and have their force by virtue of international usage and its observance by the merchant community. In other words, it is the rules, not merely the actions or events, that cross national boundaries

[4]Some claim that the lex mercatoria is an autonomous legal order in the sense that it is distinct from both national legal orders and the international legal order. In the operational sense, however, such a claim will prove futile. Although one national legal system may be autonomous from another, this claim cannot be set forth in the context of the lex mercatoria. Due to its insufficiency in form and substance, it sometimes turns to national legal orders for its implementation, its substance, and its efficacy. It is thus well recognized that both national legal orders and the international legal order support and contribute to the lex mercatoria and in so doing enhance its efficiency. Without the complementary and supplementary role of the relevant national legal order concerned, and sometimes of the international legal order as well, the lex mercatoria may prove on its own to be a set of inoperative rules. Therefore, there is no reason to consider it autonomous.

[5] Some claim that "the new law merchant, as an autonomous legal regulation, is founded on the complementary interaction of party autonomy and arbitration. It must be recognized that such an interaction cannot be unbridled. As mentioned earlier, aside from the national public policy restrictions, arbitration may be confronted with transnational public policy. Thus, the autonomous character of the lex mercatoria cannot be ensured.

[6] Such codification of general principles of law is a great milestone for the development of the lex mercatoria. The status of both sets of principles remains, however, as lex ferenda. Time will determine their true status. If, in fact, they are well received by the international business community and applied by arbitrators, a new chapter will be added to the life of the modern lex mercatoria.Bonell considers the UNIDROIT Principles as a well-defined set of rules. And he is very sanguine that in resorting to these Principles arbitrators "would succeed in reducing considerably the uncertainty and unpredictability which has so far characterized their decisions." The hope is so high among some jurists that one could not but express it in an enchanting manner.