Questioning the Role of International Arbitration in the Fight Against Corruption

Abstract

International arbitration does not represent a promising mechanism for the adjudication of corruption in the context of international business transactions, although parties appear to be raising allegations of corruption with increasing frequency in arbitration proceedings. This article surveys over 50 arbitral awards, spanning many decades, and rendered by tribunals of the International Centre for Settlement of Investment Disputes and the International Chamber of Commerce, tribunals applying the arbitral rules of the United Nations Commission on International Trade Law, and the Iran-United States Claims Tribunal. On the basis of this survey, the article argues that arbitral tribunals have made an unsatisfactory contribution to the adjudication of corruption allegations partly due to avoidance techniques employed by both tribunals and parties, as well as some questionable reasoning on the part of arbitral tribunals. Most significantly, however, tribunals have faced major evidentiary problems because parties have tended to provide inadequate evidentiary support for corruption allegations. Tribunals could pursue five potential solutions to these evidentiary problems, namely drawing adverse inferences, placing greater reliance on circumstantial evidence, lowering the standard of proof, shifting the burden of proof, and drawing on factual findings in domestic proceedings. Finally, this article concludes by arguing that arbitral tribunals are also ill-suited to the adjudication of such claims because the public interest in the adjudication of corruption allegations is at odds with the relatively closed, non-transparent character of arbitration.

Keywords: international arbitration, corruption, standard of proof, burden of proof, adverse inferences