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Transnational law is an institutional framework for cross-border interaction beyond the nationstate. In distinction of territorially organized national and international law, it is structured as a plurality of functionally specialized transnational law regimes, which in a pragmatic approach combine different governance mechanisms of private (norms, alternative dispute resolution, social sanctions) and public (laws, courts, enforcement) origin, where the latter are disembedded from their domestic context.

The Concept

The concept of transnational law has long been disputed and is still subject to international scholarly debates. In 1956, Philip C. Jessup delivered his seminal Storrs Lecture “Transnational Law” at Yale Law School. Although the attribute “transnational” had been used before—as Jessup himself points out—he was the first to assign this attribute to the law. The background against which Jessup's innovation must be seen is twofold. Until the late 1950s, the concept of law had been closely linked to the nation-state; sovereign state authority was seen as the only possible source of legal norms. The main conceptual distinction made by lawyers was, and still is, the distinction between national and international law. National law is understood to be the law of the nation-state encompassing criminal codes, civil codes, administrative regulations, or other laws produced by a domestic lawmaking authority and directly valid within a particular nation-state's territory. International law, on the other hand, is concerned with the relation between states. Public international law, or the law of the nations, encompasses international treaties concluded by sovereign nations, international custom, and general principles of law. Private international law, or the law of conflicts, is national law regulating which domestic legal order is applicable to individual relations with cross-border elements.

None of these categories, however, comprises norms made by non-state actors. Jessup's notion of transnational law has become most relevant in the light of economic globalization and the rise of private self-regulation that reacts to both domestic and international law's incapability to comprehensively facilitate and regulate cross-border interaction. Jessup had already identified the world community as a community not only of states but also of individuals and private groups such as internationally acting enterprises or organizations. Because international law was ill equipped to reflect rules and regulations of private actors, Jessup (1956) posited, “I shall use, instead of ‘international law,’ the term ‘transnational law’ to include all law which regulates actions or events that transcend national frontiers. Both public and private international law are included, as are other rules which do not wholly fit into such standard categories” (p. 2).

Jessup's approach must also be understood in the light of the 1950s world order. The beginning era of the Cold War was shaped by the battle of the global superpowers and their allies. In this situation, Jessup, being an international lawyer, recognized that the progress of public international law (the law of nations) had come to a dead end. The bipolar world order seemed to be set in stone, and major advances in public international law were not expected. The inclusion of private powers in the concept of transnational law promised to bring some movement on the stage of international affairs.

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