Introduction

Literature has addressed the procedural and substantial impact that criminal proceedings may have on arbitration proceedings.¹ Published ICC awards have also illustrated how arbitrators have dealt with allegations of corruption, investigations or convictions, and how they have applied the standard of proof in disputes involving transactions tainted by a suspected or proven criminal conduct.² However, as highlighted during the 20^th IBA Arbitration Day in 2017, the potential interactions between criminal and arbitration proceedings remain to a certain extent unexplored.³

The 2009 Report of the International Law Association (ILA) on Lis Pendens and Arbitration expressly states that ‘parallel administrative or criminal proceedings’ were excluded from the scope of the study as ‘they might raise issues of lis pendens and/or case management for an arbitral tribunal’. The Report further notes that ‘[t]he effect of such proceedings justifies separate study and would have taken the Committee's report beyond acceptable limits’.⁴

However, in its recommendations, the ILA Committee recalled a resolution it had made in 1996 according to which the fact that a pending or forthcoming court case, whether civil or criminal, is related to an arbitral proceeding should not, in itself, cause the discontinuance or suspension of the arbitral proceedings’.⁵

The prime concern among the arbitral community was whether the principle according to which ‘le criminal tient le civil en l’état’ (i.e. the civil court must await the decision of the criminal court before deciding a case) mainly applied in civil jurisdictions, would apply in arbitration. The adoption of this principle in international arbitration could be seen as a weakness for international arbitration, particularly if used abusively by a party attempting to delay and disrupt the proceedings.

A study of the awards and procedural orders rendered in approximately twenty-five ICC cases shows that parties generally include a reference to criminal proceedings in their submissions in the context of requests for a stay of the arbitration pending the outcome of the criminal parallel proceedings (I), requests relating to the use of evidence relating to the criminal proceedings (II),⁶ and in the context of allegedly forged documents, which covers both above-mentioned scenarios (III). While examining these requests, arbitrators will cautiously balance the parties’ rights, the search for the truth,⁷ and the efficiency of the arbitration process. Some extracts of relevant cases are available in the Annex of this article.

I – Deciding on requests for a stay of the arbitration

In 1996, the ILA Committee recommended the principle of non-automatic stay of parallel arbitration proceedings – hence leaving this issue to the discretion of the arbitral tribunal. In all ICC awards or procedural orders studied or previously published,⁸ a request for a stay of the arbitration pending the outcome of parallel criminal proceedings was rejected; this seems to concur with the trend in commercial and investment arbitration.⁹

In the cases studied, the arbitrators quickly set aside any references by the parties to the principle that the civil court must await the decision of the criminal court before deciding a case, usually stating that the application of this principle is optional in arbitration (i.e. not of international public policy),¹⁰ and that the suspension of domestic civil proceedings is subject to the discretion of the civil judge.¹¹ (On public policy and arbitrator’s discretion, see Annex, Case 13706 and Procedural Order in Case 20952.)

In the cases studied, the arbitrators decided whether to stay the arbitration by way of an award or, equally, by way of a procedural order. In one case, the sole arbitrator raised the issue of the nature of such request and held that it should first be decided whether the request for a stay was a procedural or substantive issue. By way of a partial award, the sole arbitrator concluded that such request was procedural in accordance with the law of the place of arbitration, which was also the place of the criminal proceedings), and that it should be decided by way of a procedural order. The procedural order on jurisdiction dismissing the request was rendered two days after the partial award was signed. (See Annex, Case 20952, Partial Award and Procedural Order).

1. Applicable law and arbitrators’ discretion

In the published award 7986 rendered in 1999, the arbitral tribunal had to decide on respondent’s request for a stay of the arbitration in consideration of two criminal proceedings pending both before the courts of the place of arbitration and the place of incorporation of the company that was the subject matter of the parties’ share purchase agreement. Interestingly, the arbitral tribunal made a distinction between the impact of these two criminal proceedings on the arbitration. The arbitral tribunal stated that pending criminal proceedings in a country different than the place of arbitration do not automatically fall within the scope of the saying ‘the civil court must await the decision of the criminal court before deciding a case’ such that the arbitral tribunal has discretion to decide whether or not to stay the arbitration in these circumstances.¹²

In many of the cases studied, the arbitrators stated that they had discretion to decide how to address requests for a stay of the arbitration. When the place of arbitration was in a civil law jurisdiction, the arbitral tribunal usually first referred to the above principle to then depart from it and consider it as merely optional. In most cases, the source of the tribunal’s discretion was not specified, particularly when the place of the arbitration and the place of the criminal proceedings are identical.

In some cases, however, the arbitral tribunal discussed whether such discretion derived from one of the relevant applicable laws. For instance:

• In one case, the Procedural Order n° 1 acknowledged that granting a stay of the arbitration fell within the scope of the sole arbitrator’s powers pursuant to Article 22(2) of the ICC Rules¹³ and stated that both Swiss law (law of the place of arbitration) and French law (substantial and procedural governing law) granted such discretion.
• In Case 13706 (see Annex) where criminal proceedings relating to an alleged forgery of an amendment to the disputed contract had been initiated by claimant in its country of incorporation, the arbitral tribunal referred to the law of the place of arbitration and to an ‘international arbitral practice’ when deciding whether to stay the arbitration.

Interestingly, when scrutinizing an award under its Rules,¹⁴ the ICC International Court of Arbitration noted that the sole arbitrator referred to several French law precedents relating to the issue of whether arbitral proceedings should be suspended pending the outcome of parallel criminal proceedings and invited the arbitrator ‘to consider explaining why he relied on French law when (i) Egyptian law governed the merits of the dispute and (ii) all procedural matters were governed by the Rules’. Following this comment made by the Court, the arbitrator informed the Secretariat of the International Court of Arbitration that he relied on the position of French law in his reasoning as France was the place of arbitration. He also indicated that the criminal actions were seated in Egypt and that Egyptian law is derived from French law.¹⁵

2. Scope and status of the parallel criminal proceedings

When dealing with requests for a stay of the arbitration, arbitrators consider different factors such as the stage reached in the parallel criminal action, its scope and the influence it may have on the pending arbitration. The examination of these criteria also assists in identifying bad faith requests intended to delay or freeze the arbitration proceedings. In previously published ICC awards and recent unpublished awards, arbitrators considered the following questions:

• Whether there would be a risk of denial of justice if the arbitration proceedings were indefinitely stayed in circumstances where the criminal action was only at the investigation stage;
• Whether the similarities and correlations between the criminal proceedings and the arbitration were such that ordering a stay could influence or contradict the decisions to be made in the arbitration.¹⁶

Arbitral tribunals also asserted that the burden to prove the existence, status, scope and connections between the criminal proceedings and the arbitration lies with the party requesting the stay. (See Annex, Final Award 13706 and 20035).

Particularly, in one case involving a share purchase agreement between US and European parties and where investigations had been initiated against several management and staff members of the company being sold to the claimant by the respondents, the respondents requested a stay of the arbitration pending the outcome of these criminal proceedings. This request was dismissed by way of a procedural order on the following grounds:

1. It is within the discretion of the arbitral tribunal to apply the rule ‘le criminel tient le civil en l’état.
2. On the basis of the evidence submitted, the tribunal did not consider the decision of the criminal judge to have an incidence on the outcome of the arbitral proceedings and further considered that there were no conflicts between the issues arising out of the criminal proceedings and the issues before the tribunal.
3. Despite the respondents’ allegations, dismissing the request for a stay would not result in a violation of due process or in inequality between the parties.

In its final award, the arbitral tribunal confirmed its dismissal of the respondent’s request to stay the arbitration by referring to the following additional grounds:

4. The differences between the two proceedings, particularly as neither party to the arbitration was involved in the criminal action directed against the target company of the share purchase contract.
5. The fact that each party faced the same restrictions with respect to accessibility to the criminal file and compliance with the secrecy of investigations.¹⁷
6. the lack of impact of the criminal proceedings on the arbitration, as evidenced by the fact that the risk of criminal proceedings was known to Respondent and had not been disclosed to Claimant during the sale of the shares of the company.

Arbitrators have also dismissed requests for a stay where the criminal action had been declared time barred by the national courts,¹⁸ or where the party requesting the stay failed to provide evidence of the existence or status of the criminal proceedings.¹⁹ In a more recent award, the arbitral tribunal dismissed the request for a stay on the ground that the requesting party had not provided evidence of the filing of the criminal complaint or its progress, such that the arbitral tribunal could not evaluate its prospective impact on the arbitration. (See Annex, Case 20035)

In one group of cases, the parallel criminal proceedings involved related parties, such as directors or employees of the parties (see e.g. Case 20035). For instance:

• In one case involving a European claimant and an African respondent, the arbitral tribunal considered that there was no reason to stay the arbitration pending the outcome of a criminal action initiated by the respondent against its employee, who signed the disputed transaction. The tribunal noted that such criminal proceeding did not involve the claimant and that, in any case, a conviction of respondent’s employee would have no impact on the outcome of the arbitration as the claimant was not aware, at the time of signature of contract, of the fraudulent behaviour of the respondent’s employee and the respondent would, therefore, continue to be bound by its obligations under the contract.
• In Case 20952 involving criminal charges against respondent’s employee, the arbitral tribunal dismissed respondent’s request for a stay of the arbitration pending a criminal proceeding against directors of respondent in its procedural order, as the parties involved in the proceedings were different but also because such conduct could be held as dilatory and a resulting stay as contrary to public policy.

3. Criminal proceedings initiated or raised in bad faith

In situations where (i) a party had filed successive criminal actions, sometimes in different states, on the same grounds, and (ii) a party requested several extensions for submitting briefs or postponement of a hearing in order to gather evidence from parallel criminal proceedings, arbitrators examined the intention of that party and whether its conduct amounted to an abuse of process.

In one case involving a sales contract between a North African claimant and a European respondent, the claimant had filed criminal actions on the basis of allegations of forgery against the respondent in both the claimant’s and respondent’s country. The arbitral tribunal decided that successive criminal actions were not per se abusive as the second action was initiated before a decision was rendered in the first criminal proceeding. However, the arbitral tribunal noted that, in the opposite situation, it could be considered that the applicant was desperately trying to obtain a condemnation, which had been previously dismissed for lack of grounds in another jurisdiction.

In another case also involving a sales contract between a North African claimant and a European respondent, the arbitral tribunal unilaterally fixed the date of a hearing in light of the respondent’s successive requests for an extension of time to file its submission. The arbitral tribunal refused, in the absence of a force majeure event, to grant a final extension as the respondent did not provide any alternative date for a hearing despite several proposals and reminders by the claimant, and had not raised the parallel criminal proceedings before that stage. The arbitral tribunal stated that the arbitration, and more specifically the establishment of a procedural timetable, should not be paralysed by a party’s lack of cooperation. The tribunal held that the respondent could still inform the arbitral tribunal of any relevant element disclosed during the criminal proceedings after the hearing.

The bad faith of a party is sometimes addressed by arbitral tribunals at the end of the arbitration when allocating costs. Article 38(5) of the ICC Arbitration Rules for instance provide that arbitrators may take into account the conduct of the parties when deciding on costs.²⁰ In the two final awards that referred to the respondent’s uncooperative and disruptive behavior, including the filing of successive criminal complaints, the arbitrators decided to exclude the legal costs from the costs awarded to claimant. In Case 18223 (see Annex), the arbitral tribunal stated that the legal costs incurred by the parties should remain at their expense but that the respondent would pay the entirety of the costs incurred during the ICC Arbitration comprising the ICC administrative expenses and the arbitrators’ fees.

4. The imperative of efficiency of arbitration

When deciding whether to grant or refuse the stay, and balancing the different interests at stake, arbitrators have recognized the imperative of a swift and efficient procedure, as referred to in provisions introduced as of 2012 in the ICC Rules (Articles 22(1), 22(2) and 25(1) of the Rules).²¹ In cases filed under the 1998 Arbitration Rules, arbitrators recalled that although these newly included provisions on efficiency were absent from the version of the Rules applicable to the case, the objective of efficiency and guidelines could already be found in the ICC Commission Report on ‘Techniques for Controlling Time and Costs in Arbitration’, first published in 2008.²²

In a few cases seated in Switzerland, the arbitral tribunal relied on the Swiss law principle according to which the arbitration should be concluded within a reasonable time. Arbitral tribunals inferred from this principle that a stay can only occur in exceptional circumstances (see e.g. Case 13706).

In addition to the principle of arbitral efficiency as it exists under Swiss law, an arbitral tribunal considered the principle of procedural equality of the parties and thereby balanced the imperative of efficiency with the parties’ right to be heard, referring inter alia to Article 22(4) of the ICC Arbitration Rules which provides that ‘[i]n all cases, the arbitral tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case’.

Interestingly, in another case seated in Switzerland, the arbitrators:

• Considered the ‘exceptional circumstances’ that would justify a stay in the specific interest of a party. For instance, in one case, the claimant objected to the stay by arguing a particular interest: a lack of decision by the arbitral tribunal within a specific tax year would be cause ‘unconscionable harm to Claimant’. The arbitral tribunal decided that, in this case, the interests of the requesting party (the respondent) did not ‘outweigh’ the interest of the party opposing the request for a stay and the claimant’s right to an expeditious settlement of its claims. (See Annex, Procedural Order n°1 in Case 21852, para. 37).
• Acknowledged as a matter of principle the importance of efficiency in arbitration, but dismissed the argument when it was raised by the party requesting the stay. For instance, in one case where respondent alleged that it would be more time and cost efficient to wait for the outcome of the criminal proceedings, the arbitral tribunal considered that it was inappropriate for the party requesting the stay to raise such an argument and that, in any case, it is for the the applicant for the stay to ‘establish the existence of exceptional circumstances that justify the stay’ on the basis of an overall efficiency of the proceedings. (See Annex, Procedural Order n°1 in Case 21852, para. 38).

5. Public Policy

In some cases, parties requested the arbitration to be stayed in light of ‘public policy considerations’ (see e.g. Case 13706). Arbitrators have considered whether such rule for a stay of a civil proceedings pending the outcome of criminal proceedings was of (international) public policy and should apply in arbitration.

Although not referred to in the cases studied, which mostly took place prior to 2015, it is worth noting that according to a 2015 IBA Report on the Public Policy Exception in the New York Convention, corruption and criminal acts could be encapsulated in a transnational notion of ‘substantive public policy’:

Public policy has two dimensions: procedural and substantive.

Even though some procedural irregularities constitute autonomous grounds for refusal of recognition and enforcement of foreign arbitral awards under Article V(1) of the Convention, procedural public policy accounts for the majority of cases where recognition or enforcement of a foreign arbitral award was denied under Article V(2)(b) of the Convention.

Procedural public policy includes near-universal values or principles such as the right to be heard or due process, the sanction of fraud or corruption in the arbitral process, res judicata, and the independence and impartiality of arbitrators.

Substantive public policy appears, in contrast, to be less prone to universal or "transcendental" values or rules, other than the prohibition on giving effect to "illegal" contracts (i.e. entered into for the purpose of carrying out an illegal – criminal – activity), rendering the drawing up of a catalogue of its manifestations a daunting task.²³

In Case 15300,²⁴ the arbitrator declared that transactions based on a fraudulent commission agreement should not be facilitated by virtue of the fundamental values of international commerce. However, the tribunal found that the decision should not be influenced by a potential risk that the award be set aside for violation of international public policy standards under the law of the place where annulment is sought:

14. International commercial relations must meet certain standards of basic morality in order to be able to claim enforcement of the obligations contracted for. The Sole Arbitrator is aware that he is not confronted with issues such as bribery, money laundering, deviation of embargo provisions, violation of competition laws or similar acts for which international treaty instruments would be governing. Nevertheless, the Sole Arbitrator is of the conviction that an international agency agreement which is entered into for the sole purposes to deceive a third party, and thus violates such third party's contractual rights in a manner which is "particularly offensive" (cf. ICC Award 6248 of 1990, Arnaldez/Derains/Hascher, Collection of ICC Arbitral Awards 1991-1995; p. 239, 243), cannot crave for enforcement with the help of the arbitral system, irrespective whether and under which legal system such act is or would be considered as a criminal offence and without the Sole Arbitrator having to determine the specific legal ramifications of such act in general or for [X]. In the Sole Arbitrator's conviction, it would not be compatible with fundamental values of international commerce, necessary to allow business being conducted in a loyal surrounding, to lend a helping hand to such agreements.

15. In making his assessment, the Sole Arbitrator is also not bound by any specific considerations of public policy under French law, being the law applicable to any possible annulment procedures of the award. The standard to be applied by the Sole Arbitrator is not the speculative possibility of annulment of an award enforcing the Parties' incriminated commission agreement. It is not for the Sole Arbitrator to second-guess a French court's decision under French international public policy considerations of an issue for which the Parties have genuinely called upon him to decide as a matter covered by their arbitration agreement.

In some of the ICC awards and procedural orders reviewed, the arbitral tribunal considered whether the foreseeable outcome of the criminal proceedings at the place of the arbitration should alter its decision and reasoning in the ongoing arbitration. For instance, Partial Award in Case 20952 (see Annex) reads:

74. In relation to criminal proceedings the question of whether a stay ought to be granted relates to public policy … the Respondent refers to and relies upon legislation and court decisions which state that in certain circumstances civil court judgments are to be stayed until a criminal claim is disposed of … it submits that the remedy is a stay rather than dismissal of proceedings.

75. Therefore [the place of arbitration/ place of the criminal proceedings] does not require the dismissal of the action when there are criminal proceedings touching upon the same matter as in a civil claim brought by way of arbitration or litigation.

In March 2019, the Tribunal Superior de Justicia in Madrid rendered an important judgement concerning parallel criminal proceedings in state courts and arbitration dealing with contractual and civil matters.²⁵ While this was not an ICC matter, it sheds light on how Spanish courts have treated this issue, something ICC arbitrators sitting in Spanish jurisdictions should bear in mind.

In the case in question, the plaintiff requested the annulment of an arbitral award on the basis that it violated public order as there was still an ongoing criminal proceeding concerning the same matter submitted to arbitration. According to the plaintiff, the existence of a concurrent criminal proceeding called for a stay of the arbitration in order to avoid conflicting results and to uphold the principle of legal certainty.

The underlying arbitration involved a contract relating to the construction of a desalination plant, which was the subject of a criminal investigation conducted by the Central Instruction Court No. 6 of Madrid.²⁶ During the arbitration proceedings, the Spanish State Attorney sent multiple requests asking for the proceedings to be stayed, arguing that there was a strong suspicion of the occurrence of crimes relating to the contract such as prevarication, embezzlement of public funds, fraud and forgery of public documents.

In response to the requests made by the State Attorney and the respondent, the arbitrator pointed out that the criminal court did not yet know the content of the evidence submitted and, therefore, the facts that were to serve as support to a criminal action could not be assessed. He also indicated that the contract subject to arbitration and the criminal issues being investigated were not closely linked and that it was not demonstrated how a pronouncement from the criminal court could affect the validity of the contract. Adopting these arguments, he dismissed the request to stay the proceedings.

The Spanish court decided to annul the award. It stated that according to Article 41.1 of the Spanish Arbitration Act, an arbitral award can be set aside when it violates public order. By quoting past decisions, it affirmed that ‘public order is the set of principles, general governing rules and fundamental rights within the Spanish Constitution and legal order, which may not be derived from by the will of the parties’. It also stated, contrarily to what the arbitrator had decided, that there was a close connection between the matter submitted to arbitration and the criminal investigation, as the contract could be directly affected. In the court’s view, in order to assess the ‘prejudicialidad penal’ and its impact on the arbitral proceedings, it would be enough to find sufficient evidence of criminality to trigger the investigation and trial, which the court considered to have been the case.

While none of the ICC cases researched presented such a situation, decisions by state courts such as this one will have to be carefully considered by arbitrators sitting in the jurisdictions from which such decisions emanate. In that respect, it must be recalled that Article 42 of the ICC Arbitration Rules indicates that arbitrators ‘shall make every effort to make sure that the award is enforceable at law’.

II- The use of evidence relating to criminal proceedings

1. Relevance and materiality of documents relating to a criminal action

Arbitrators have relied on the IBA Rules on the Taking of Evidence, Articles 3(3)(b), 9(2) (a) and (b) and Article 9(3),²⁷ to exclude the production of documents that were not sufficiently relevant to the case or material to its outcome. Two of the cases reviewed rejected a party’s request to order the production of certain documents relating to investigations by the opposing party.

In one case, the arbitral tribunal dismissed the claimant’s request for production of documents originating from pending criminal investigations on the ground that the evidence requested lacked relevance and materiality, noting in particular that it did ‘not see how documents originating in the pending investigations should be relevant and material to the outcome of the case’ as investigations may be closed and never lead to an indictment and that, even if a person is indicted, he/she may still be acquitted.

In another case, the claimant requested additional documents relating to an investigation involving the respondent and allegedly showing corruption surrounding the project giving rise to the arbitral proceedings. By way of a procedural order, the tribunal dismissed the request, noting that claimant was expected to provide a statement as to how the documents were relevant to the case and material to its outcome pursuant to Article 3(3)(b) of the IBA Rules.

2. Secrecy of criminal investigations

The secrecy of criminal investigations, which was not often raised in the cases reviewed, covers two related but distinct issues: the secrecy of criminal investigations as a legal impediment to the production of evidence and the respect of the principle of equality of arms.

Secrecy of criminal investigations as a legal impediment to the production of evidence

In the few cases that address the secrecy of criminal investigation, arbitrators were uncertain as to how the principle of secrecy of criminal investigations should apply in arbitration, especially as the scope of this principle is not always clearly set out in the domestic provisions of the place of the criminal proceedings.

In one case, the claimant alleged that it was impossible to indicate the status of the criminal proceedings in accordance with the principle of the secrecy of the investigations. The respondent raised in reply that (i) such principle should not be used to avoid providing information that was essential to the resolution of the dispute, and (ii) the criminal proceeding had been ‘artificially kept alive’ by the claimant. The tribunal dismissed the respondent’s request for an order for disclosure of the status of the criminal proceeding alleging that the investigative secrecy indeed constituted a ‘legal impediment to the production of the documents in the present case’.

Secrecy of investigations and equality of arms

The fact that one party may not be a party to the criminal proceedings has, in a few cases, led the arbitral tribunal to pay attention to the equality of arms between the parties when deciding on the admissibility of documents in the arbitration. If a party does not have the same access to the criminal file in the criminal proceedings as the other party, then it may, to a certain extent, be disadvantaged.

For instance, in one case, the arbitral tribunal partially granted the respondents’ request to order the production of a limited number of documents related to an investigation involving the claimant outside the document production phase as identified in the first procedural order. In this case, the respondent sought permission to request the production of the entire file in the claimant’s possession including ‘police submissions, prosecutorial and judicial responses to such submissions’ and ‘all documents in their possession generated as part of any of the criminal proceedings involving claimant’, alleging the following:

• The witness testimony, relied on by claimant, referred to documents that the respondents did not have access to and that were not submitted as exhibits.
• The respondents should be granted permission to request these documents at this stage of the arbitration as the claimant had not previously referred to such documents.
• The claimant’s reliance on these documents, without producing the full set of documents to which it had access, unjustly disadvantages the respondents and violates the principle of equality of arms.
• An order to produce these documents would not impose a disproportionate burden on the claimant given the likelihood that the documents will already have been assembled into discrete and readily retrievable files.

3. Weight of evidence gathered in criminal proceedings

Testimonies in criminal proceedings

In one case, the arbitral tribunal explained that it would admit testimonies made by the respondent (a related company to the claimant in the criminal proceeding) but use them cautiously to highlight certain facts of the case. The arbitral tribunal pointed out the following:

• The testimony provided by the defendants in the criminal proceedings before the attorney general was not made under oath as was mandated by the law of the place of the criminal proceedings with respect to the accused parties.
• The defendants in the criminal proceedings did not appear as witnesses in the arbitration and did not have the opportunity to comment, confirm or deny the evidence given in the criminal proceedings.

Value of expert reports

In one case, the tribunal placed ‘significant evidentiary weight’ on a technical report drafted in the course of a criminal investigation. The arbitral tribunal noted that the fact that the report was drafted at the request of, and formally delivered to, the criminal court ‘inspired confidence in the impartiality of the drafters and the correctness of the conclusions reached’.

Impact of past convictions of state officers for corruption

Previous published awards show how arbitral tribunals have taken into account the past convictions of a party (or alleged related party) to the proceedings. In such cases, state entities (acting as respondents) challenged the validity of the transaction on various grounds, including on the fact that the initial agreements were signed by ministers who were subsequently convicted for corruption.²⁸

These awards show that convictions of corruption alone may not be sufficient to annul the contracts that were concluded by the convicted entity. But when considered together with the overall facts and evidence, such convictions may be an additional element leading the arbitral tribunal to declare the disputed contract as void.

For instance, in Case 14470,²⁹ the arbitral tribunal found that the criminal convictions of a minister were an isolated fact and could not per se warrant a finding that the disputed contract or all contracts signed by said officer during his mandate were null:

The conviction of [the minister] could only be considered as a mere indication, which could not per se constitute evidence of the illegality of the disputed contract. This indication should be supported by other elements leading to the same result. (Translated from French)

In Case 12990,³⁰ the arbitral tribunal found evidence of corruption in light of typical indications of corruption such as lack of evidence, brevity of negotiations, unusual payment arrangements, disproportionately high remuneration, endemic corruption in the country concerned, secrecy and also the incrimination of persons involved. The disputed contract between claimant, an oil company, and respondent, a state, was signed by a government that was subsequently overthrown in a civil war. The new government rejected the claimant's request, arguing that the agreement was void as it had been made in abnormal circumstances to enrich corrupt government leaders and was part of a set of specious contracts contrary to public policy. The arbitral tribunal declared the contract void and dismissed the claimant’s claim. On the issue of the past criminal conviction, the arbitral tribunal stated:

Convictions of leaders of [State X]: Whatever may be the political context of the circumstances raised by claimant; the convictions [in State X] are additional indications supporting the Tribunal’s finding’. (Translated from French)

III- Deciding on the stay and/or the exclusion of evidence: The case of allegedly forged documents

Allegations of forgery of a contract or its amendments tend to include requests for a stay of the arbitration and/or for the exclusion of the allegedly forged document.

Requests for a stay of the arbitration

Where criminal proceedings had been initiated on the authenticity of the documents, a party requested a stay in at least two scenarios.

In Case 13706 (see Annex), the claimant initiated parallel criminal proceedings in its country of incorporation and requested a stay of the arbitration, alleging that waiting for the result of the criminal investigation would be ‘giving the claimant a reasonable opportunity of presenting its case’ and that a decision ‘on the basis of the falsified agreement would put the claimant in substantial disadvantage’. The arbitral tribunal dismissed the stay on the basis that (i) the claimant did not provide evidence as to the status of the criminal proceedings, and (ii) the issue of forgery was already dealt with by a preliminary award where the arbitral tribunal decided that claimant had not proven the amendment to the contract to be invalid.

In another case involving an exclusive distributorship agreement between a European producer and a North African distributor, the arbitral tribunal decided that a stay was not necessary pending the conclusion of a criminal proceeding relating to the alleged forgery of an amendment to the disputed contract as there was sufficient evidence from the file that an amount of money was owed to claimant.

Requests for exclusion of the allegedly forged documents

Even where such requests were filed in circumstances where strong suspicions surrounded the authenticity of the documents, the arbitral tribunal did not decide on the authentic or fabricated nature of the exhibits in question, but rather ruled whether to exclude said exhibits from the file.

In Case 17842 (see Annex), the claimant asserted that a batch of e-mails submitted by respondent together with its submission were forged and requested leave to submit an expert opinion on the issue of the authenticity of these exhibits. On the basis of (i) the expert report, (ii) witness testimony submitted by claimant, and (iii) respondent’s lack of evidence supporting the authenticity of the documents, the arbitral tribunal granted this request to exclude the disputed e-mails from the proceedings. The tribunal applied specific procedural rules with regard to the authenticity of evidence as previously issued according to which ‘all documents submitted by a Party to the Arbitral Tribunal shall be deemed authentic and complete, unless disputed by the other Party’.³¹ The tribunal clarified that if the claimant established ‘reasoned and plausible doubts regarding the authenticity of the new documents’, the respondent was ‘required to prove that the new documents are authentic’. The tribunal found that the claimant's comments as well as the evidence it provided had raised reasoned and plausible doubts on the authenticity of the documents and required the respondent to prove that the submitted documents were authentic. The tribunal came to the conclusion that the respondents had not managed to establish the authenticity of the documents and decided that it would not consider the documents as evidence.

Interestingly, in one case involving a consultancy and hotel management agreement, a request for the exclusion of one piece of evidence, which was subject to a parallel criminal action for alleged forgery, was accompanied – if such evidence were to be admitted – by a subsidiary request for a stay of the proceedings until the issue of forgery was solved by the domestic courts.

In this case, the respondent (the owner of the hotel) requested the exclusion of a document alleging that the financial projections relating to the potential profitability of the hotel that the claimant claimed to have sent to the respondent were forgeries. The respondent requested the arbitral tribunal to exclude the admission of the expert report and to appoint another expert to report on quantum. Claimant (the consultant) denied that the projections were forged or that they had been shared with the respondent as part of the negotiations of the management agreement. It claimed that the projections – which may or may not have been received by Respondent – constituted only one of a number of sources used by Claimant’s financial expert to render its report. The arbitral tribunal determined that the resolution of the issue of forgery was not required for the issuance of an award according to the applicable law (the common law to the place of arbitration, the place where criminal proceedings were brought, and law governing the contract). The arbitral tribunal:

• ruled that the proceedings would continue in accordance with the already established schedule;
• declined ‘at this time’ to exclude from evidence the financial projections or the expert report and to appoint a tribunal expert.

Conclusion

The success of arbitration as a dispute resolution method is measured by the enforceability of the resulting award. In order to ensure the enforcement of ICC awards, the International Court of Arbitration carefully monitors the arbitration process and scrutinizes the award in accordance with Article 34 of the 2017 Arbitration Rules. Article 42 of the ICC Rules provides that the Court ‘shall make every effort to make sure that the award is enforceable at law’, and Article 6 of Appendix II to the Rules provides that the Court ‘considers, to the extent practicable, the requirements of mandatory law at the place of the arbitration’.

An award that legitimizes criminal conduct or contradicts a criminal condemnation, even one issued after an award was rendered, could be set aside on the ground of public policy pursuant to Article V(2)(b) of the New York Convention, which provides that the recognition or enforcement of an award may be refused when ‘it would be contrary to the public policy of the country’ where recognition or enforcement is sought.³²

From this standpoint, the relationship between arbitration and criminal law is not, and should not be, one of confrontation. If criminal law and fraud are to be part of a transnational ‘substantive’ public policy,³³ arbitrators can be viewed as the guardians of legality and good morals in international trade.³⁴

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