Fiat iustitia, ne pereat mundus: A Novel Approach to Corruption and Investment Arbitration

Abstract

Corruption has existed forever. Notwithstanding a seemingly universal condemnation as reflected in a number of international conventions, levels of corruption continue to be quite high across the globe. The public sector is most troubled with it. There are countries where grand corruption deeply rooted at highest government levels constitutes the very essence of state policy. This article analyses whether it is appropriate in the investment arbitration context to deny contracts or investments procured by corruption any form of protection as the tribunals in World Duty Free, Metal-Tech and Spentex have done, relying on considerations of international (transnational) public policy. Based on a comparative analysis of how several jurisdictions deal with the issue, the article concludes that, subject to certain limitations, it is not against international (transnational) public policy to accord protection to contracts and investments tainted by corruption.