The Twilight of the Law of the Fairs: Inventing International Cooperation on Bankruptcies in Early Modern Europe (Lyon, 1660–1710)

What is it about?

Bankruptcy was a key institution in the development of markets in Europe. However, the territoriality of jurisdictions and legal systems made the handling of international insolvencies difficult. In the middle of the seventeenth century, cities such as Lyon developed networks of cooperation by granting foreign merchants equal rights to local creditors on a reciprocal basis. Yet courts were reluctant to give foreign authorities control over assets and creditors on their territory. The article examines how Lyon commercial court changed its policy towards international insolvencies during the second half of the seventeenth century. While equal treatment of foreign creditors was conditioned on the recognition of an extraterritorial jurisdiction in the medieval fairs’ system, now it depended on the reciprocity of the legal status granted to merchants abroad. This system of cooperation between equally sovereign courts prefigured in many ways the current situation of international private law in bankruptcy matters.

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