Originally from Inherent Powers of Arbitrators

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I. INTRODUCTION

International arbitration often is criticized as ill-suited to addressing issues of corruption in international business.   There are many reasons for this perception:

• Parties may seek to exploit their contractual freedom to choose the rules of decision and a private forum in order to obscure or insulate their corrupt practices; 

• The party alleging corruption carries the burden of proving it, which is “notoriously difficult” in international arbitration,  as “acts of corruption and collusion are specifically designed not to be able to be identified or detected”; 

• Given the gravity and possible criminal consequences of corruption findings, arbitral tribunals may impose a higher standard for proving corruption, often rendering corruption findings virtually impossible; 

• Arbitral tribunals generally have no power to compel the production of evidence, preventing arbitrators from getting to the bottom of corruption allegations; 

• Arbitral tribunals often have no desire, or perceived mandate, to investigate corruption sua sponte or proactively, preferring to dispose of cases on unrelated grounds;  and

• Arbitral tribunals may be skeptical of corruption allegations, perhaps viewing corruption as the fault of both parties, or simply the cost of doing business in certain parts of the world.