Path Dependent Obstacles to Cross-Border Insolvency: A Social Darwinian Perspective

Abstract

Conflict of Laws and Insolvency Coordination: an Introduction 1231 The coordination of legal systems has been a subject of discussion and innovation for legislators, political leaders, legal academics and businessmen for centuries, particularly with the aim of facilitating business across borders in order to maximise the economic benefits of international trade. The lex mercatoria has persisted since the Middle Ages as a form of private international law aimed at facilitating cross-border trade. It provides a body of rules and principles, distinct from the ordinary laws of a single jurisdiction, which developed from a need for simplified financial transactions that avoided risk of transporting hard currency over the long distances travelled by merchants to partake in regional faires and markets throughout Europe. These rules aimed to create a framework within which commercial transactions between travelling merchants could take place. While commercial rules in Europe have never been completely uniform, the lex mercatoria offered a means of coordinating the trading customs among different countries 4 without recourse to specific legal rules. International trade continues to