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In this chapter, we examine how lawyers and law professors, operating in private arenas, successfully revived a pre‐modern legal system, the Lex Mercatoria. Shapiro's ‘The Globalization of Freedom of Contract’ deals, first, with the unification of private law in the United States in the 1920s, which he then uses as a benchmark to assess the massive post‐Second World War movement to a global law of contract. Stone Sweet's ‘Islands of Transnational Governance’ traces the development of a transnational legal system, comprised of anational contract law and a network of arbitration houses that compete to supply third‐party dispute resolution to the international commercial world. In addition to the more specific arguments made in the papers, we are attracted to the new Law Merchant for some more general reasons worth noting.
First, the rise of commercial arbitration offers an opportunity, always unusual, to explore further questions of how new judicial systems emerge and institutionalize. Because arbitration falls between mediation and adjudication on the continuum of triadic dispute resolution (TDR) (see Chapters 1 and 4), it allows us to treat the dynamics of TDR and judicialization in their more general guises, without having to start or end with state courts.
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