Application of The Burden and Standard of Proof in Corruption Allegations Under ICSID Arbitration

Abstract

Corruption allegations are a frequently-encountered issue in international investment arbitration. These allegations are mainly used as a defense mechanism by states, aiming to dismiss investors’ assertions in arbitral proceedings, because if corruption is upheld, the tribunal will be deprived of jurisdiction. Adjudicating corruption, on the other hand, is a very challenging task to accomplish for tribunals. This is mainly due to the lack of means and mechanisms to conduct serious investigations and fact finding in order to establish corruption. Because adjudicators cannot abstain from rendering a verdict even though they doubt facts or evidence, legal systems have adopted some tools to aid this process. The concepts of burden and standard of proof are two the main tools that have been used for this purpose. However, even though there are a few clauses regarding the standards of evidence in UNCITRAL Rules or IBA Rules, there is a lack of binding regulation of standards of evidence in international arbitration law. Also, there are no rules under the ICSID Convention regarding the allocation of burden and standards of proof. In this context, the analysis of the application and allocation of the burden and standard of proof in international investment law becomes an essential issue for resolving such disputes.