Chapter 17 - Illegality - Handbook on International Commercial Arbitration - Second Edition
It is with surprising regularity that allegations of dishonesty, fraud, forgery, unlawful (and lawful) means conspiracy and bribery are introduced into claims and defences in references. Such an inclusion can be highly emotive and those wrongly accused will be rightly affronted.
It is therefore important to bring a dispassionate eye to allegations of illegality. Illegality can take many forms but the most common are bribery, corruption and money laundering.
The most relevant definitions of these concepts will come from the laws governing the arbitration proceedings, so it is important to avoid relying on generalities. However, the terms can be broadly defined as:
• Bribery. A promise, offer, gift or other benefit to a person in exchange for that person, or another person, to act or refrain from acting in the exercise of his duties.
• Corruption. The misuse of power for private gain. It includes a range of offences, such as embezzlement, misappropriation or other diversions of property, as well as bribery itself.
• Money Laundering. A secondary offence, which involves converting, transferring or concealing the proceeds of crime. In order to have an offence of money laundering, there must be a primary, or “predicate”, offence (often of bribery, corruption or fraud).
Historically, definitions of these offences have tended to focus largely or exclusively on bribery and corruption in the public sector. Increasingly, national and international laws have increasingly sought to extend a general definition of bribery and corruption to both public and private sector conduct.