Originally from World Arbitration and Mediation Review

I.  INTRODUCTION

Due to the globalization of international trade, economic actors invest more and more abroad and conclude more and more international transactions.  As a result, the number of cross-border disputes between investors and host states has increased, and a rise in the number of investment arbitration cases can be observed.  On the other hand, the proliferation of international anti-corruption instruments and national anti-corruption legislations has led to the recognition of this scourge as a criminal offence contrary to international public policy. Thus, it is not surprising that since the mid-2000s, arbitrators have had to address corruption issues with increasing frequency. Yet, they do not have the same powers as national judges to investigate those issues in a time and cost-efficient manner.  Arbitral tribunals are therefore confronted with difficult and complex challenges when allegations or suspicions of corruption arise during the arbitral process.  

Although arbitrators are not deemed to be the best suited to tackle corrupt practices, as they do not have prosecution powers, they have nonetheless dealt with corruption during the last fifty years. Indeed, the problems faced by arbitral tribunals when addressing corruption issues are not insurmountable and must not be exaggerated.  Given the recent developments in Investor-State Dispute Settlement (“ISDS”), and more particularly, the multiplication of anti-corruption provisions in investment treaties, and the proactive and creative approach adopted by certain investment tribunals, ISDS could in fact turn out to be a driving force in the fight against corruption. 

After analyzing the underlying problems and controversies that corruption allegations or suspicions may create in international investment arbitration, this paper will demonstrate why the criticisms against ISDS must be mitigated.  In other words, this article will attempt to provide some guidelines and practical solutions to address corruption concerns, with the view of determining whether investment tribunals are an adequate forum to combat such evil.