In the early Middle Ages, countries in Europe had different laws for people of different ethnical and religious groups. Those who used to be Roman citizens could still live by Roman law, while the Germanic peoples lived by German law, and there were different rules depending on whether people were Christian or not.

The territorial principle soon prevailed, though. While there could still be different laws within the same country, the same law applied to everyone alike in the same parts of each country.

I would say Europe has already tried the Archbishop's idea, but gave it up centuries ago - for good reasons. Law is about being able to foresee what consequences your actions may have. This is possible if the law is the same within the same tract of land, but not if the law differs depending on whom you are dealing with regardless of territorial borders.