Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas – Preview Page

I. INTRODUCTION 

Corruption allegations have become increasingly prominent in international arbitration, particularly in foreign direct investment-related disputes and those involving large-scale commercial contracts. These claims, whether raised as a sword or a shield, present tribunals with some of the most complex evidentiary and legal challenges in contemporary dispute resolution. Corruption may be invoked by States to invalidate investments, by investors to allege bad faith State conduct, or by commercial parties to escape contractual obligations. Yet, despite its prevalence, proving corruption in the context of international arbitration remains notoriously difficult. 

Corruption is by its nature clandestine—concealed in shadowy agreements, unwritten understandings, and elaborate schemes designed to avoid detection. As a result, parties often rely on circumstantial evidence, red flags, and inferences drawn from patterns of conduct. Tribunals are placed in the difficult position of deciding whether a serious allegation with potentially far-reaching consequences has been sufficiently proven, without the benefit of direct, documentary evidence or reliable witness testimony. Yet, while those engaged in corrupt activities have become more creative, anecdotal and published evidence suggests that arbitrators have been reluctant to challenge procedural orthodoxy and adopt innovative approaches to deal with corruption allegations more effectively and judicially.