Abstract
With the rise of corruption as a subject of international instruments and the convergence of obligations around its prevention, detection, and remediation in both the public and private sectors, corruption has increasingly figured as an issue in international arbitration. Indeed, its acceptance as a public policy issue at both the international and transnational levels has resulted in the need for tribunals, in both commercial and investor-state disputes, to grapple with questions of jurisdiction, admissibility, and consequences, as well as standards of proof. As this essay demonstrates, the challenges presented by the issue of corruption pose special difficulties for arbitration. Time will tell if tribunals will move from their current largely binary, all-or-nothing approach to a more nuanced one based on proportionality.
Highlights
With the rise of corruption as a subject of international instruments and the convergence of obligations around its prevention, detection, and remediation in both the public and private sectors,[1] corruption has increasingly figured as an issue in international arbitration
Its acceptance as a public policy issue at both the international and transnational levels has resulted in the need for tribunals, in both commercial and investor-state disputes, to grapple with questions of jurisdiction, admissibility, and consequences, as well as standards of proof
Others argue that given the general duty of tribunals to do justice, they must investigate issues of corruption even if the parties have not raised them. These views are in tension with the concept of arbitration as being based on party consent and the limited powers typically given to arbitrators
Summary
With the rise of corruption as a subject of international instruments and the convergence of obligations around its prevention, detection, and remediation in both the public and private sectors,[1] corruption has increasingly figured as an issue in international arbitration. Its acceptance as a public policy issue at both the international and transnational levels has resulted in the need for tribunals, in both commercial and investor-state disputes, to grapple with questions of jurisdiction, admissibility, and consequences, as well as standards of proof. Allegations of corruption are presented as a defense against arbitral claims. In investor-state disputes, the respondent state may claim corruption as a basis for asserting that the arbitral tribunal lacks jurisdiction or the claim is inadmissible. The scope and definition of corruption, methods, standards, and burden of proof, the duties of members of an arbitral tribunal, the consequences of proving corruption, rules of attribution, and the effect of host country investigation and/or prosecution are hotly contested issues in the cases. ICSID Case No ARB/14/4, Award, para. 7.48 (Aug. 31, 2018)
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