Revealing the Man behind the Curtain : Proving Corruption in International Commercial Arbitration

Abstract: There is unanimity within the arbitration community that corruption is disrupting international trade and that arbitrators must not let arbitration be a safe forum for enforcement of contracts tainted by such illicit acts. Due to the hidden nature of corruption, often hiding behind an agency agreement, the most challenging question facing arbitrators has shown to be how to handle the rules of evidence. Awards show that there is an inconsistency in the treatment of the burden and standard of proof as well as the significance given to circumstantial evidence. Two trends can be spotted where the first approach is to argue that the seriousness of the accusations calls for a heightened standard of proof. The second trend is to argue that the seriousness to the contrary calls for a pragmatic approach to the rules of evidence, allowing a less rigid view on the standard of proof and use of circumstantial evidence or even a shift in the burden of proof. The focus of the thesis is on evidentiary aspects of corruption cases and how arbitrators have dealt with these challenges. The overall question is how arbitrators should handle the rules of evidence in corruption cases from a lege ferenda perspective. It is argued that the inconsistency in the handling of proof is sometimes misguided and that there are reasons to agree on a common starting point for applying the rules of evidence to corruption cases. Arbitrators should realise the frightening fact that it is their weighing of the evidence which is usually decisive for the outcome and accordingly there is a responsibility to conduct this operation carefully. The tools and procedural flexibility to reveal corruption exist even if there is no perfect solution on how to do it.