1. FOUR CONTEMPORARY PROBLEMS

In Westacre v Jugoimport, pursuant to a consultancy agreement, Westacre was to receive substantial commissions on any contracts for the sale of military equipment between the Respondents and the Kuwaiti Ministry of Defence. There was a sale contract of substantial value, but the Respondents repudiated the consultancy agreement and refused to pay the commission. Westacre commenced ICC arbitration in Geneva, in accordance with the terms of the dispute resolution clause in the consultancy agreement.

At the hearing, and without any prior reference to such a defence in its pleadings, the Respondents alleged that the agreement was contrary to international public policy and therefore void because Westacre had bribed persons in Kuwait to exercise their influence in favour of the sales contract. The majority of the Arbitral Tribunal found that the bribery was not proven. The majority stated that bribery must be clearly and unequivocally pleaded, that the burden of proof rested firmly on the party making the bribery allegation and that where bribery is not made an issue by the parties, the arbitral tribunal has no duty to investigate possible bribery1.[Page65:]

The Respondents sought to set the award aside pursuant to Article 190(2)(e) of the Swiss Private International Law Act 1987 on the grounds that the award was incompatible with international public policy. The Respondents further specifically raised the issue of bribery before the Swiss Federal Court. The Federal Court rejected the "… feckless criticism of the arbitral tribunal's findings of fact …" and upheld the award.

The Claimant then sought to enforce the award in England. The Respondents resisted on the grounds that enforcement would be contrary to public policy. The English Court of Appeal faced the question of whether, at the enforcement stage, an English court should investigate the allegations of bribery. The judges of the Court of Appeal could not agree. The majority found that the allegation of bribery has been "… made, entertained and rejected …" by the Arbitral Tribunal, and so there was no justification for re-litigating the issue at the enforcement stage. The dissenting judge (Waller L.J.) saw the issue in terms of competing public policies: on the one hand, of upholding the finality of arbitral awards and, on the other, of ensuring that the English courts did not lend their assistance to an illegal and objectionable contract. He referred to a statement of the trial judge that commercial corruption stood at a different level of opprobrium from a crime such as drug trafficking, and so enforcement should be favoured. Waller L.J. stated:

"I have reached a different conclusion to that of the judge. I disagree with him as to the appropriate level of opprobrium at which to place commercial corruption. It seems to me that the principle against enforcing a corrupt bargain of the nature of this agreement, … [is] based on public policy of the greatest importance and almost certainly recognised in most jurisdictions throughout the world. I believe it important that the English court is not seen to be turning a blind eye to corruption on this scale ….

The fact is that the arbitrators simply did not have an opportunity of considering the case as now made, and whatever their suspicions, the majority did not feel it in their place to make inquiries ….

The answer is that so far as public policy is concerned it is always unattractive for one party to be able to take the point, but the English court is concerned with the integrity of its own system, and concerned that its executive power is not abused. If the agreement represented a contract to pay a bribe, Westacre should not be entitled to enforce the agreement before an English court and should not be entitled to enforce an award based on it." [Page66:]

The Westacre arbitration2 raises four pressing problems for the international arbitral community relating to corruption and those basic notions of justice and morality that, in the affairs of nations, are collectively described as "public policy." These four problems, which will be examined in this paper, are:

1. In public policy terms, how serious are bribery and corruption? Are they an evil comparable, for example, with drug trafficking or are they a lesser white-collar crime comparable, for example, to tax evasion?

2. Are bribery and corruption matters domestic tribunals can safely entrust to private arbitral tribunals or should domestic courts satisfy themselves independently, at the enforcement stage, that allegations of bribery and corruption are without substance?

3. Does an arbitral tribunal have a duty to investigate possible corruption?

4. If arbitral tribunals do have a duty to investigate possible corruption, then what are the limits of this duty?

The same questions can be posed in respect of both money laundering and accounting fraud, which will also be considered in this paper. By way of preliminary definitions, bribery might be described as the offering, promising or giving of any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official in order to obtain or retain business; money laundering is the concealment or transfer of profits derived from the commission of a crime so as to disguise its true nature, source or ownership. Fraud is a very general concept, but is limited in this paper to accounting fraud, and in particular the falsification or destruction of business records for an illegal purpose3.

2. THE CURRENT PUBLIC POLICY SIGNIFICANCE OF CORRUPTION, MONEY LAUNDERING AND FRAUD

As recognised by Article 35 of the ICC Rules of Arbitration, an arbitrator has an obligation to make every effort to make sure the award is enforceable at law. This obligation means that arbitrators must have regard to the international public policy of States that might be related to the parties, the contract or the enforcement of the award, because a breach of public policy is a ground under Article V.2(b) of the New York Convention 1958 for a domestic court to refuse to recognise or enforce an arbitral award. The globalisation of the international[Page67:] economy is increasing the significance and altering the content of international public policy, most fundamentally by requiring attention to new international norms relating to the protection of human rights, the environment and cultural sites4. The increasing integration of world markets has also raised the profile and prompted sustained international action in respect of corruption, money laundering and fraud. The developments in international rule-making in these areas over the last decades or so have both been impressive and attracted a broad base of support, particularly amongst capital-exporting nations. There is no doubt today that corruption and money laundering are not to be tolerated or condoned in international commerce or that the suppression of corruption and money laundering is an established part of international public policy to which international arbitrators must have regard. The place of fraud in inter-national public policy is complicated by difficulties in definition, but certainly some manifestations of fraud, particularly those that might conceal illegal activities such as corruption and money laundering, are without doubt prescribed by international public policy.

a) Bribery and corruption

The modern public policy significance of bribery and corruption can be traced back to concerns in the mid-1970s regarding the means by which multi-nationals obtained contracts abroad. This concern, fueled by scandals involving the bribery of foreign government officials by US business, prompted the United States to enact the Foreign Corrupt Practices Act in 1977. The purpose of the FCPA was to prevent the bribery of foreign officials and to restore public confidence in the integrity of US business and for this purpose made it an offence to make corrupt payments to foreign public officials in order to obtain or keep business. In the same year, an International Chamber of Commerce committee, under the Chairman-ship of Lord Shawcross, urged co-ordinated international action, including self-regulation by business, to combat bribery and extortion. To assist self-regulation by business, the committee produced the first version of what are now known as the "ICC Rules of Conduct: Extortion and Bribery in Inter-national Business Transactions. 5

The impetus for the elevation of the US' measure into an inter-national standard came from the distortive effects of corruption on competition. The restrictions imposed by the FCPA placed US business at a competitive disadvantage compared with foreign companies that routinely paid bribes and, in some countries, even were able to claim bribes as deductible expenses for tax purposes. Accordingly, [Page68:] the United States pressed for parallel legislation from its trading partners. During the 1990s, there was a flurry of international initiatives against bribery and corruption, culminating in 1997 OECD Convention on Combating Bribery of Foreign Public Officials (hereafter the "OECD Bribery Convention"). The initiatives of the 1990s are well summarised by an International Monetary Fund report on the OECD Bribery Convention6.

"… the OECD Bribery Convention benefited from a favourable international climate in which several other international anti-corruption initiatives came to fruition. The Inter-American Convention Against Corruption organized by the Organization of American States … was opened for ratification in 1996. A World Trade Organization … Ministerial Conference launched in 1996 a study on transparency in government procurement practices. The European Union … approved a convention on combating corruption in 1997, and the Council of Europe … finalized a regional anticorruption convention in 1999. The United Nations … General Assembly adopted a resolution in 1997 requesting the Secretary General to assist member states in designing strategies to prevent and control corruption, which has since become a priority for the United Nations Development Program…. The World Bank in its IATLICSWorld Development Report 1997: The State in a Changing World laid out an agenda for prompting good governance…. Transparency International, the leading NGO in anti-corruption, was launched in 1994, and in 1996 the International Chamber of Commerce adopted Extortion and Bribery in International Business Transactions-Rules and Recommendations".

The OECD Bribery Convention requires the signatory States to establish bribery of a foreign public official as a criminal offence under their national laws. The offence is defined in Article 1 of the Convention, which includes a definition of "foreign public official." The Convention requires signatories to criminalize practices that might facilitate the commission or concealment of bribery under their money laundering and accounting legislation, and to commit themselves to mutual legal assistance and either to extradite or prosecute their nationals accused of the bribery of a foreign public official. The application of the OECD Bribery Convention is limited in that it requires signatories to criminalize only the offering or paying of bribes, and not the soliciting or receiving of bribes, and covers only public officials, and not private agents, employees or corporate officers. As at October 10, 2002, 34 countries had enacted national legislation to implement the OECD Bribery Convention7[Page69:].

The rapid and widespread promotion of anti-bribery and anti-corruption norms by various intergovernmental organisations ("IGOs") has been described as a "norm cascade" 8. International rule-making has been complemented by the work of non-governmental organisations ("NGOs") such as the International Chamber of Commerce, referred to in the above quotation, and Transparency International which have highlighted the problems of bribery and corruption and encouraged business to address them9. Transparency International publishes annual Corruption Indices. These indices include the Corruption Perceptions Index which identifies the countries where corruption is most prevalent, and the Bribe Payers Index, which identifies the propensity of companies from leading export countries to pay bribes to senior public officials and also identifies the business sectors where bribery and corruption are most prevalent. It is significant that the three international business sectors where the perceptions of corruption are highest - public works and construction, arms and defence and oil and gas - are sectors of major importance for international commercial arbitration10.

b) Money laundering

(i) Nature of money laundering: The essence of money laundering is processing the proceeds of crime to disguise their illegal origin. It typically involves three stages: ??placement of the criminal proceeds in the financial system; ?layering or engaging in a series of movements or conversions of the proceeds to distance them from their source; and finally ??integration of the proceeds into a legitimate economy.

(ii) Criminalisation of money laundering:Money laundering has experienced a rapid rise in its international profile since the term was first coined in the 1970s. The catalyst for the development of international rules relating to money laundering has been its intimate connection with the activities of organised crime and particularly drug trafficking. A major advance in the prohibition and punishment of money laundering was achieved in 1988 at Vienna with the United Nations Convention Against Illicit Traffic in Narcotic Drug and Psychotropic Substances

(hereafter the "Vienna Convention"). Article 3 of the "Vienna Convention" requires signatories to criminalize any dealings in property derived from drug offences, including the following dealings: [Page70:]

"1.Each Party shall adopt such measures as may be necessary to establish as criminal offences under its domestic law, when committed intentionally: a)… b)(i) The conversion or transfer of property, knowing that such property

is derived from a [drug-related] offence or offences, or from an act

of participation in such offences or offences, for the purpose of con

cealing or disguising the illicit origin of the property or of assisting any

person who is involved in the commission of such an offence or

offences to evade the legal consequences of his actions;

(ii) The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from a [drug-related] offence or offences, or from an act of participation in such an offence or offences;

c) Subject to its constitutional principles and the basic concepts of its legal system:

(i) The acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from a [drug-related] offence or offences, or from an act of participation in such offence or offences;…."

Article 3 of the Vienna Convention has served as the template for the definitions of money laundering in subsequent international instruments such as the Council of Europe's Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime in 1990, the European Directive on Prevention of the Use of the Financial System for the Purpose of Money Laundering in 1991 (hereafter the "1991 European Directive") and the United Nations Convention against Trans-national Organized Crime in 200111.

It was the Financial Action Task Force on Money Laundering (hereafter "FATF") that took up the challenge of extending the international prohibition of money laundering from the proceeds of drug offences to the proceeds of any serious crime. The FATF is an IGO established by the 1989 G7 Summit in Paris. Twenty-nine countries and two international organisations (the European Commission and the Gulf co-operation Council) are members of the FATF. The mandate of the FATF includes the development and promotion of policies, at national[Page71:] and international levels, to combat money laundering and to monitor members' progress in implementing anti-money laundering measures. Its main achievement to date is the Forty Recommendations drawn up in 1990 and reviewed in 1996, which set out measures that members and all other countries are encouraged to adopt. The Forty Recommendations require countries to ratify and implement fully the Vienna Convention (Recommendation 1) and in Recommendations 4 to 6 advocate the extension of the definition of money laundering in the Vienna Convention to all "serious offences":

"Scope of the Criminal Offence of Money laundering

4. Each country should take such measures as may be necessary, including legislative ones, to enable it to criminalize money laundering as set forth in the Vienna Convention. Each country should extend the offence of drug money laundering to one based on serious offences. Each country would determine which serious crimes would be designated as money laundering predicate offences.

5. As provided in the Vienna Convention, the offence of money laundering should apply as least to knowing money laundering activity, including the concept that knowledge may be inferred form objective factual circumstances.

6. Where possible, corporations themselves - not only their employees - should be subject to criminal liability."

The widespread criminalization of money laundering for serious offences has today firmly established money laundering as an international crime.

(iii) Financial system regulation in combating money laundering: The FATF also sought to extend the

framework of anti-money laundering efforts from the criminalization of money laundering to the regulation of the institutions through which money might be laundered. Recommendations 8 to 29 of the Forty Recommendations addressed the role of the financial system in combating money laundering, covering such matters as customer identification and record keeping, the need for financial institutions to develop programmes against money laundering and the need for increased diligence by financial institutions when dealing with complex transactions or unusual patterns of transactions, including the need to report suspicions to competent authorities12[Page72:].

During the decade of the 1990s, there was a comprehensive wave of rule-making initiatives directed at money laundering from the United Nations, the European Union and the Organisation of American States, national legislatures, specialist IGOs in the banking sector and from the private banking sector. Of particular significance was the 1991 European Directive, which required Member States to impose customer identification requirements on financial and credit institutions to ensure these institutions examined "… with special attention any transaction which they regard as particularly likely, by its nature, to be related to money laundering …", and that they established adequate internal control procedures to forestall and prevent money laundering. Two features of 1991 European Directive anticipated the further expansion of regulatory measures against money laundering.

Firstly, Article 6 of the 1991 European Directive anticipated the development of a disclosure or "whistleblowing" obligation whereby credit and financial institutions, their directors and employees might be required to disclose suspicious transactions to authorities. Article 6 provides:

"Article 6

Member States shall ensure that credit and financial institutions and their directors and employees co-operate fully with the authorities responsible for combating money laundering:

• by informing those authorities, on their own initiative, of any fact which might be an indication of money laundering,

• by furnishing those authorities, at their request, with all necessary information, in accordance with the procedures established by the applicable legislation…."

The creation of a whistleblowing obligation in respect of money laundering required the modification of established standards of banking secrecy. Accordingly, Article 9 of the 1991 European Directive provides:

"Article 9

The disclosure in good faith to the authorities responsible for combating money laundering by an employee or director of a credit or financial institution of the information … shall not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, and shall not involve the credit or financial institution, its directors or employees in liability of any kind. [Page73:]"

Secondly, the recitals of 1991 European Directive recognised that: "… since money laundering can be carried out not only through credit and financial institutions but also through other types of professions and categories of undertakings, Member States must extend the provisions of this Directive in whole or in part, to include those professions and undertakings whose activities are particularly likely to be used for money laundering purposes."

The legal and accounting professions are particularly susceptible to involvement in the facilitation of money laundering. In general, Europe's legal professions have resisted the extension to their activities of client identification, internal controls, and suspicious-transaction reporting requirements, raising objections of client confidentiality and legal professional privilege13. However, the Second Directive on Money Laundering of 2001 (with which Member States are required to comply by June 15, 2003) now requires Member States to extend money laundering regulations to the legal professions, but preserves the legal profession's privilege in respect of the defence of clients in legal proceedings. The compromise adopted by the European Union is set out in the recitals to the Second Directive14:

"… (15) The obligations of the Directive concerning customer identification, record keeping and the reporting of suspicious transactions should be extended to a limited number of activities and professions which have been shown to be vulnerable to money laundering.

(16) Notaries and independent legal professionals, as defined by the MemberStates, should be made subject to the provisions of the Directive when participating in financial or corporate transactions, including providing tax advice….

(17) However, where independent members of professions providing legal advice which are legally recognised and controlled, such as lawyers, are ascertaining the legal position of a client or representing a client in legal proceedings, it would not be appropriate under the Directive to put these legal professionals in respect of these activities under an obligation to report suspicions of money laundering. There must be exemptions from any obligation to report information obtained either before, during or after judicial proceedings, or in the course of ascertaining the legal position for a client. Thus, legal advice remains subject to the obligation of professional[Page74:] secrecy unless the legal counsellor is taking part in money laundering activities, the legal advice is provided for money laundering purposes, or the lawyer knows that the client is seeking legal advice for money laundering purposes."

Accordingly, the legal professional privilege, and more generally the right to a fair trial guaranteed by the European Convention on Human Rights and similar instruments, will mark a limit to any obligation of legal advisers to disclose suspicious transactions that might involve money laundering.

(iv) Private sector initiatives:Perhaps the most significant initiative in the private sector has been the

Global Anti Money-Laundering Guidelines for Private Banking (hereafter the "Wolfsberg AML Principles"). The "Wolfsberg AML Principles" were promulgated by a group of leading banks, with the participation of Transparency International, in a voluntary effort to control money laundering and to establish a common global standard for their private banking operations. The "Wolfsberg AML Principles" include due diligence provisions relating to client identification and identity categories of persons requiring additional diligence, provisions for identifying unusual or suspicious transactions, and monitoring, control and reporting in relation to money laundering. The classes of persons requiring additional diligence are defined as follows15:

"2. Client acceptance: situations requiring additional diligence/ attention

2.1. General

In its internal policies, the bank must define categories of persons whose circumstances warrant additional diligence. This will typically be the case where the circumstances are likely to pose a higher than average risk to a bank.

2.2. Indicators

The circumstances of the following categories of persons are indicators for defining them as requiring additional diligence:

- Persons residing in and/or having funds sourced from countries identified by credible sources as having inadequate anti-money laundering standards or representing high risk for crime and corruption.

- Persons engaged in types of business activities or sectors known to be susceptible to money laundering. [Page75:]

- "Politically Exposed Persons"(frequently abbreviated as "PEPs"), referring to individuals holding or having held positions of public trust, such as governmental officials, senior executives of government corporations, politicians, important political party officials, etc., as well as their families and close associates."

(v) Organised crime and terrorism: It is clear, however, that the prevention of money laundering is not simply or primarily an issue of banking or financial regulation; it is a major priority in the fight against organised crime. Money laundering has a prominent place in the recent United Nations Convention Against Trans-national Organized Crime16 and recent national legislation such

as the Proceeds of Crimes Act 2002 (UK) 17. The September 11, 2001 attacks on the World Trade Center have emphasized the link between money laundering and terrorism and given further urgency to its criminalization. The United States included anti-money laundering amendments in the USA Patriot Act enacted in October 200118. Leading IGOs have also addressed money laundering and terrorist financing. The FATF issued Special Recommendations on Terrorist Financing on October 31, 2001 and the Basel Committee on Banking Supervision has lent its support to collective action to identify and halt terrorist financing19.

c) Fraud

Accounting practices are a highly technical field more susceptible to national legislation then international regulation, so it is perhaps not surprising that fraud has not witnessed the same degree of international co-operation and rule-making as corruption and money laundering. However, fraudulent record-keeping facilitates and helps to conceal corruption, money laundering and other crime, particularly securities fraud. For this reason, the OECD Bribery Convention includes an article requiring Signatories to ensure that companies keep complete and accurate financial records, and particularly targets off-the-books or secret accounts or transactions, non-existent or mis-described expenditures and the use of false documentation. It also requires Signatories to adequately punish "…omissions and falsifications in respect of the books, records, accounts and financial statements of such companies…."20 . The European Union has sought to harmonise the financial information presented by publicly-traded companies to ensure a high degree of transparency and compatibility of financial statements by endorsing in 2002 the international accounting standards adopted by the International Accounting Standards Board21 . A wave of recent corporate collapses, [Page76:] primarily in the United States and involving massive losses for creditors, investors and employees, has focussed attention on fraudulent accounting practices and led the United States to enact the Sarbanes-Oxley Act of 2002, with the intention of improving the quality and transparency of financial reporting, independent audits and accounting services for public companies. The Sarbanes-Oxley Act includes a limited "whistleblower" obligation imposed on lawyers, who are required to report any "…evidence of material violation of securities law or breach of fiduciary duty or similar violation…" by the company or its agents to the General Counsel or Chief Executive Officer and, in some circumstances, to its full Board of Directors.

d) Conclusions

This brief survey of international developments demonstrates that bribery of a foreign public official and money laundering are now serious crimes in international law. They can no longer be considered as simply as reprehensible business practices, or unavoidable evils of doing business in difficult parts of the world. Bribery and money laundering have been widely and repeatedly condemned by the international community.

Bribery, corruption and fraud also undermine the integrity of international business and create dangerous links between business and organized crime. They have pernicious macro-economic effects, including the distortion of competition and securities markets and help to perpetuate the power of corrupt regimes in developing countries, and so indirectly contribute to retarded economic development and human rights abuses. A recent World Bank report identified the "…large costs…" of corruption for economic development as including less competition, less foreign direct investment, lower tax revenues, lower public spending on health and education and a loss of legitimacy of the state with a consequent loss of capacity to provide institutions that support markets22 .

The banking sector has had to accept limitations on its established principles of confidentiality and to report suspicion transactions. The legal profession is also going to have to accept disclosure obligations in respect of transactions that might involve money laundering, subject to the protection of legal professional privilege where the right of defence of the client is involved. Lawyers in the United States also have limited disclosure obligations in respect of fraudulent accounting. It is clear, therefore, that the public policy concerns relating to money[Page77:] laundering and, to a lesser extent, fraud, are sufficiently strong to override the traditional professional confidentiality between lawyers and clients in some circumstances.

Accordingly, there is no doubt today that the suppression of corruption and money laundering is an established part of international public policy and must be respected by international arbitrators. The place of fraud in international public policy is more complex, but certainly some manifestations of fraud, particularly those that might conceal corruption and money laundering or serious crime, are also proscribed by international public policy.

3. THE ENFORCEMENT OF ARBITRAL AWARDS INVOLVING CONTRACTS TAINTED WITH CORRUPTION, MONEY LAUNDERING OR FRAUD

If we return to the Westacre arbitration, we can see that Waller L.J. was correct when he said that the "…principle against enforcing a corrupt bargain…[is] based on public policy of the greatest importance and almost certainly recognised in most jurisdictions throughout the world…." A similar conclusion is likely to be drawn by tribunals in most jurisdictions, in respect not only of contracts tainted with corruption, but also contracts involving an element of money laundering.

The international public policy significance of bribery of a foreign public official and money laundering means that an award that does not adequately address issues of this nature arising in the course of the arbitration is liable either to be set aside by the tribunals of the jurisdiction where the award was made or refused recognition and enforcement in jurisdictions where enforcement might subsequently be sought. The fact that an award conflicts with the public policy of the seat of the arbitration is normally sufficient under applicable national laws to justify that it be set aside by the tribunals of that place23 . Similarly, pursuant to Article V.2.b of the New York Convention24 , enforcement tribunals are justified in refusing to recognise and enforce awards relating to contracts tainted with bribery of a foreign public official or money laundering.

However, as the history of the Westacre arbitration confirms, the courts at the seat of the arbitration and at the place of enforcement must also bear in mind the public policy interest in respecting the proper jurisdiction of arbitral tribunals and upholding the finality of arbitral awards. If a contract involves elements of[Page78:] bribery or money laundering, then the arbitral tribunal is the forum to evaluate the evidence and determine the implications of the bribery and money laundering for the claims and defences of the parties, under the contract and the applicable law. In practical terms, therefore, a court hearing an application for setting aside or for recognition and enforcement is much more likely to uphold an award, or to recognise and enforce an award, notwithstanding bribery or money laundering, where the issues of bribery or money laundering have been acknowledged and dealt with in the award by the arbitral tribunal.

In general terms, the position is the same in respect of fraud, with the caveat that the public policy imperative to refuse to uphold or enforce an award relating to a contract tainted with accounting fraud is weaker where there is no evidence that the fraud involves corruption, money laundering or other serious crime.

4. THE OBLIGATION OF AN ARBITRAL TRIBUNAL TO INVESTIGATE CORRUPTION, MONEY LAUNDERING AND FRAUD

From the above analysis, it follows that when an allegation of bribery of a foreign public official, money laundering, or fraud involving a serious offence is raised before an arbitral tribunal, then the arbitral tribunal should: a) recognise the public policy significance of the allegation; b) fully investigate the evidence relating to the allegation and determine its

significance under the applicable law; and c) explicitly refer to the allegation and its factual and legal conclusions relating to the allegation in its award.

The explicit allegation of bribery, money laundering or serious fraud is, however, only the most obvious case. The allegation might not be explicitly made by either party, but, rather, enter into the arbitration by suspicion or innuendo as the proceedings progress, or the parties might acknowledge an element of corruption, money laundering or fraud, but ask that the arbitral tribunal ignore it in deciding the dispute before it. This latter situation occurred in perhaps the most well known arbitral award dealing with bribery of foreign public officials, that of Judge Lagergren in ICC Case No. 1110, decided in 1963. The arbitration involved a claim for commissions by an Argentinian agent in respect of public works contracts awarded by the Perón regime in Argentina to the Respondent. It was acknowledged by the General Manager of the Respondent that large commissions were required for the purpose of bribing government officials and that "…anybody who had any[Page79:] dealing in the Argentine, one way or the other, had to face this condition….." Both parties confirmed that they considered the agency contract binding and effective and asked the tribunal to decide their case in accordance with the terms of reference. Judge Lagergren decided that he could not just ignore the issue of bribery and so examined it on his own motion25 .

The decision of Judge Lagergren was ahead of its time. Whatever the position might have been in 1963, it is clear today that an arbitral tribunal has a duty to examine any corruption, money laundering or serious fraud occurring in the negotiation or performance of the contract, even if the parties do not wish it to do so. The assertion made in the Westacre arbitration that an arbitral tribunal has no duty to investigate bribery unless one of the parties explicitly raises the issue is incompatible with the modern significance of bribery in international public policy26 .

There are four clear reasons why an arbitral tribunal must investigate bribery of a foreign public official, money laundering or serious fraud irrespective of the wishes of the parties. Firstly, an arbitral tribunal has a duty, as confirmed by Article 35 of the ICC Rules of Arbitration, to make every effort to ensure its award is enforceable in law, and any award that ignores evidence of bribery, money laundering or serious fraud carries a significant risk of subsequently being held to be contrary to public policy and therefore unenforceable. Secondly, and notwithstanding the private and often confidential nature of international arbitration, arbitral tribunals have a public responsibility to the administration of justice that is inseparable from their autonomy as recognised and respected by national courts. In fact, the public responsibilities of international arbitral tribunals are rapidly growing in prominence. This public responsibility requires arbitral tribunals not to condone bribery, money laundering or serious fraud27 . Thirdly, international arbitration is a service provided to States and businesses engaged in international trade and investment, and a proactive approach by international arbitrators best assists the considerable efforts States and businesses are making to develop and implement rules and systems to eliminate bribery and money laundering. Finally, weak or apathetic judicial authorities have been identified as one of the root causes of the persistence of corruption28 , and it is in the interests of the international arbitration community as a whole to assist actively in the elimination of corruption rather than risk being seen as a weak and complicit aid to its survival. [Page80:]

Possible bribery of a foreign public official, money laundering or fraud must no longer be discreetly ignored by lawyers and arbitrators on the basis that such practices are an inevitable part of doing business in less developed regions of the world. Where a dispute arises and an arbitral tribunal is appointed, the parties expect the tribunal to know and understand trade practices in the industry and the region concerned, but they have no right to expect arbitrators to ignore either the applicable law or international public policy. Bribery, money laundering and fraud are not issues of moral choice for an arbitrator. They involve crimes, widely condemned in the international community, which under no circumstances must be condoned or facilitated by a reluctance of arbitral tribunals to recognise the true nature of these acts.

There are now substantial sources of information available to enable arbitral tribunals to identify the warning signs or "red flags" of bribery, money laundering and serious fraud that justify further investigation or questioning of the parties or their witnesses. The business sectors and countries particularly afflicted by corruption are well publicised; certain characteristics of commission or agency contracts - including unusual payment patterns, disproportionate commissions, ill-defined services, and the character of the relationship between the agent and a foreign public official - might indicate bribery if no alternative explanation is forthcoming29 , and the establishment of off-the-books accounts, the making of off-the-books or inadequately identified transactions, the recording of non-existent expenditures, the entry of liabilities with incorrect identification of their purpose, as well as the use of false documents, appear in the OECD Bribery Convention as possible indications of bribery30. A multinational today should possess a policy and code of conduct on bribery and, if it does, a copy may be requested by the arbitral tribunal and then used as a basis of enquiries designed to test compliance in respect of the specific transaction at issue. Similarly, the techniques commonly employed to launder money - at least outside the specialist banking sector - and the types of transactions and persons that create suspicions of money laundering - payments in cash, suspiciously named accounts, use of off-shore companies, large deposits and transfers, use of professional facilitators such as lawyers and accountants and the involvement of "politically exposed persons" - should be familiar to international arbitrators31.

This does not, of course, mean that every suspicious element in the execution or performance of the contract should set the tribunal off on an inquisitorial[Page81:] exercise of its own irrespective of the wishes of the parties. Where suspicious circumstances exist, the tribunal's duty is not to ignore its suspicions, but to seek an explanation from the parties. A tribunal concerned, for example, by the remuneration arrangements for a foreign agent can seek an explanation of those arrangements without suggesting they might have a corrupt purpose. A discreet request for further information, if properly used, should enable an arbitral tribunal to either eliminate a suspicion of illegal activity or to confirm the need for the possibility of bribery, money laundering or serious fraud to be raised explicitly with the parties.

The arbitral tribunal should be suspicious of requests for awards by consent in respect of transactions that might involve bribery, fraud and, particularly, money laundering. Money might in fact be laundered through the presentation of a contrived dispute to arbitration in order to obtain a legitimate award that is then used to assist the defendant in laundering money through the payment of damages to the claimant32. The parties might wish to avoid inquiries by the arbitral tribunal into the legality of their conduct by terminating the arbitration. This the parties are entitled to do, but the tribunal should not assist them by making an award by consent. The discretion of an arbitral tribunal to refuse to make an award by consent jointly requested by both parties has been authoritatively examined and approved in the context of the drafting of the UNCITRAL Model Law and by the Iran-United States Claims Tribunal33.

The actual effect of bribery, money laundering or serious fraud on the rights and duties of the parties to a contract depends upon the facts of the case and the applicable law. Judge Lagergren found that the effect of the corruption in the case before him was to deny jurisdiction to the tribunal, but this reasoning has been criticised for failing to recognise the separability of the contract and the arbitration agreement, and the fact that the arbitration agreement itself is unlikely to be tainted with corruption34. This issue is beyond the scope of this paper, but whether proven bribery, money laundering or serious fraud are dealt with as an issue of jurisdiction or as an issue of the merits under the applicable law, there is no doubt that an arbitral tribunal must condemn conduct so plainly contrary to international public policy. [Page82:]

5. LIMITS OF AN ARBITRAL TRIBUNAL'S DUTY TO INVESTIGATE POSSIBLE BRIBERY OF A PUBLIC OFFICIAL, MONEY LAUNDERING AND FRAUD

The most difficult question arising from the modern public policy significance of bribery of a foreign public official, money laundering or fraud is that of the proper limits of an arbitral tribunal's duty to investigate this conduct. Where neither party explicitly alleges bribery, money laundering or fraud, the threshold for an arbitral tribunal to seek further information and begin an investigation on its own initiative is obviously a high one and would require strong suspicions of illegal activities. However, if this threshold is reached or if one of the parties alleges bribery, money laundering or fraud and therefore requires the tribunal to investigate the possibility that such activities have occurred, then the following considerations might guide the tribunal's investigation:

a) The primacy of due process/natural justice

Bribery, money laundering and fraud are serious crimes and, even when investigated in the private adjudicative context of arbitration, must be approached with procedural safeguards commensurate with the gravity of the allegations. The party or parties suspected of bribery, money laundering or fraud must be fully informed of the tribunal's suspicions and allowed the time and opportunity to make a full response. They are entitled to know the bases of the allegations against them and should be granted an oral hearing if they so request.

The seriousness of the allegations means that the burden of proof, as the Westacre ICC tribunal acknowledged, is highly important35. The burden of proof is clearly on the party making the allegation of bribery, money laundering or fraud and the proof should be convincing. Uncorroborated evidence or evidence capable of multiple explanations should normally be rejected. If the demonstration of the party alleging bribery is not convincing, the arbitral tribunal in ICC Case 6497 of 1994 stated, then "…the tribunal should reject its argument, even if the tribunal has some doubts about the possible bribery nature of the agreements." 36

b) Examination of only the enforceability of the contract in dispute

The arbitral tribunal is established as a private adjudicator for a contractual dispute between two parties and its public policy duty is restricted to ensuring that this[Page83:] contract is not illegal or unenforceable by reason of bribery, money laundering or fraud. The tribunal should not investigate or allow a party to adduce evidence relating to other contracts, transactions or activities of one of the other parties or their representatives. It should firmly reject the argument that illegal activities in other contracts or circumstances are evidence that similar conduct taints the contract in dispute.

Any award that makes findings in relation to bribery, money laundering and fraud that go beyond the issue of the validity or enforceability or the contract in dispute risks being set aside on the grounds of being ultra petita.

c) Alertness to the tactical abuse of allegations of bribery, money laundering or fraud

The tribunal must guard against the tactical use of allegations to avoid making payments as previously agreed, or to otherwise deflect attention from one party's own contractual non-performance. The Westacre arbitration demonstrates that corruption is an easy allegation to make, but difficult to prove or disprove. Influence does not necessarily indicate bribery, concealment of the sources of funds should not automatically be equated with money laundering, and departures from normal accounting practices are not always evidence of fraud.

d) Confidentiality

It might be appropriate for the arbitral tribunal to consider special orders relating to the confidentiality of the arbitration while allegations of bribery, money laundering and fraud are under investigation.

e) Privilege

As bribery, money laundering and fraud involve criminal activities, parties might invoke legal professional privilege or, in some jurisdictions, the privilege against self-incrimination, in rejecting requests from the arbitral tribunal for further information. In certain circumstances, a negative inference may be drawn from a refusal to disclose information, but given the seriousness of the allegations, such inferences must be drawn with care.

f) No duty of disclosure

Finally, there is the question of whether under any circumstances an arbitral tribunal might have a duty to disclose its award to regulatory authorities of any[Page84:] jurisdiction where criminal activity might have occurred. The emergence of "whistleblowing" obligations in respect of money laundering and fraud in some jurisdictions has already been noted.

Such duty could only arise from express legislation in a jurisdiction to which the arbitral tribunal, or some of its members, were subject. The writers are not aware of any such legislation, and there would appear to be strong public policy objections to it. The imposition of an obligation on arbitrators to disclose possible bribery, money laundering or fraud that comes to their notice in the course of an arbitration might compromise the right to a fair and independent determination of civil rights guaranteed by Article 6 of the European Convention On Human Rights.

6. CONCLUSIONS

The arbitral tribunal is appointed by the parties themselves to resolve a dispute between them. There is no doubt that indications of bribery of a foreign public official, money laundering or serious fraud complicate the relationship of the arbitral tribunal with the parties and makes its engagement much more difficult to perform. Allegations of bribery, money laundering or serious fraud will always evince a strong response from the other party, whether it be indignant denial or a barrage of counter-allegations of wrongdoing. The tribunal has to proceed with care, and its task is not made easier by the risk that a party may reveal the corrupt purpose of a contract in order to avoid sharing its benefits with the other party37 or otherwise to escape the consequences of its own contractual non-performance.

The most difficult situation for an arbitral tribunal is where the tribunal itself suspects bribery of a foreign public official, money laundering or serious fraud, but this illegality is not raised by either of the parties in its pleadings or the tribunal is informed that the parties consider the bribery, money laundering or serious fraud to be merely incidental and are united in their wish that the arbitral tribunal disregard it in deciding the dispute. Notwithstanding the view expressed in some awards that an arbitral tribunal has no duty to address bribery not pleaded by the parties, this position is simply incompatible with the modern significance of bribery of a foreign public official in international public policy. In fact, perhaps the greatest mistake an arbitral tribunal can make when faced with a suspicion of bribery, money laundering or serious fraud is to ignore it; it is much better for the suspicion to be acknowledged and the evidence addressed, even if the conclusion ultimately is that the evidence is inconclusive. [Page85:]

The position today is that the international arbitrator has a clear duty to address issues of bribery, money laundering or serious fraud whenever they arise in the arbitration and whatever the wishes of the parties and to record its legal and factual conclusions in its award. This is the only course available to protect the enforceability of the award and the integrity of the institution of international commercial arbitration. [Page86:]

FOOTNOTES

1
The majority stated: "… In arbitration proceedings, however, bribery is a fact which has to be alleged and for which evidence has to be submitted, and at the same time constitutes a defence, nullifying the claims arising from a contract. The consequences of this are decisive (…). If a claimant asserts claims arising from a contract, and the defendant objects that the claimant's rights arising from the contract are null due to bribery, it is up to the defendant to present the fact of bribery and the pertaining evidence (…). The statement of facts and the burden of proof are therefore upon the defendant. The word 'bribery' is clear and unmistakable. If the defendant does not use it in his presentation of facts an Arbitral Tribunal does not have to investigate. It is exclusively the parties' presentation of facts that decides in what direction the arbitral tribunal has to investigate (…). If the claimant's claim based on the contract is to be voided by the defence of bribery, the arbitral tribunal … must be convinced that there is indeed a case of bribery. A mere 'suspicion' by any member of the arbitral tribunal … is entirely insufficient…."

2
The description of the Westacre arbitration and subsequent litigation is taken from the report of the English Court of Appeal decision in Westacre Investments Inc v Jugoimport SDRPHoldings, Court of Appeal, May 12, 1999. This decision, and other recent English decisions on illegality and public policy, are discussed in Ewan Brown, "Illegality and Public Policy - Enforcement of Arbitral Awards in England: Hilmarton Limited v Omnium de Traitement et de Valorisation S.A." [2000] Int. A.L.R. 31-35.

3
Corruption: This description of corruption is broadly consistent with the Foreign Corrupt Practices Act, 15 U.S.C. §§78dd et seq. and the 1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. It should be noted that both this Convention and the Foreign Corrupt Practices Act concern only the bribery of foreign publicofficials. Similarly, the discussion of bribery and corruption in this paper relates to public officials. Money Laundering: The definition of money laundering is from the internationally recognised definition of money laundering in Article 1 of the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. This definition refers to the laundering of money derived from drug offences, but as the Forty Recommendations of the Financial Action Task Force on Money Laundering recognize, the definition can simply be extended from drug offences to any "serious offences" (see especially Recommendations 1, 4, 5 and 7). Fraud: Fraud is a general term not capable of comprehensive definition. Discussion in this paper is limited to accountancy fraud.

4
On globalisation and public policy see Bernardo M. Cremades and David J. A. Cairns, "The Brave New World of Global Arbitration" (2002), 3 Journal of World Investment 173-209, at 205-208.

5
For the ICC Rules of Conduct: Extortion and Bribery in International Business Transactions see François Vincke, Fritz Heimann & Ron Katz Fighting Bribery: A corporate practices manual (ICC publication 610)[see also Fighting Corruption (ICC publication 652)].

6
International Monetary Fund, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (available at: http://www.imf.org/ external/np/gov/2001/eng/091801.htm) (2001); paragraph 10. This report summarises the background to the OECD Bribery Convention, its principal features and interpretation. For further background on the Foreign Corrupt Practices Act and the OECD Bribery Convention see Kenneth W. Abbott, "Rule Making in the WTO: Lessons from the Case of Bribery and Corruption" (2001) Journal of International Economic Law,275-296 at 275-278; Foreign Corrupt Practices Act Anti Bribery Provisions, U.S. Department of Justice Website: http://www.usdoj.gov/criminal/fraud/fcpa/dojdocb.htm. For the text of the Inter-American Convention Against Corruption of 1996 see http:// www.oas.org/juridico/english/Treaties/b-58.html.

7
Ratification Status As at 10 October 2002, available on the OECD website at http:// www.oecd.org/pdf/M00017000/M00017037.pdf.

8
See Kenneth W. Abbott, "Rule Making in the WTO: Lessons from the Case of Bribery and Corruption" "(2001) Journal of International Economic Law,275-296 at 278.

9
NGOs like Transparency International are becoming increasingly relevant actors for the international arbitration community: see Bernardo M. Cremades and David J. A. Cairns, "The Brave New World of Global Arbitration" (2002) 3 Journal of World Investment 173-209, especially at 178-180 and 197-199.

10
See Robin Hodess (ed.) Global Corruption Report 2001 (Transparency International, Berlin, 2001) especially at 232 (2001 Corruption Perceptions Index) and 237 (1999 Bribe Payers Index). The Bribe Payers Index 2002 is available on Transparency International's web site at http://www.transparency.org/. A recent survey by the consultancy Control Risks Group of companies in the United States, the United Kingdom, Germany, the Netherlands, Hong Kong and Singapore confirms the prevalence of corruption, notwithstanding the international pressures, with 40% of respondents believing they had lost business in the last five years because of competitors' bribes, a figure which rises to 55.8% in the Public Works/Construction sector: see Control Risks Group, Facing up to Corruption: Survey Results 2002, available at: http://www.crg.com/html.

11
See Article 6 of the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime, the definition of "money laundering" in Article 1 of Council Directive 91/308/EEC of 10 June 1991 on Prevention of the Use of the Financial System for the Purpose of Money Laundering,and Article 6 of the United Nations Convention against Trans-national Organized Crime, which are drafted in very similar terms to Article 3 of the Vienna Convention.

12
The function and work of FATF, and the text of the Forty Recommendations are available on the FATF website at http://www1.OECD.org/fatf. FATF is the source of the three-stage description of money laundering - placement, layering and integration - referred to in the text.

13
See European Commission, Second Commission Report to the European Parliament and the Council on the Implementation of the Money Laundering Directive XV/1116/ 97, Rev. 2 at 9-12 and Annex 6 B; Financial Action Task Force on Money Laundering, Review of FATF Forty Recommendations Consultation Paper, 30 May 2002, pages 97-102; Financial Action Task Force Report on Money Laundering, Report on Money Laundering Typologies 2001-2002, at paragraphs 75-76 (available on the FATF web site).

14
Directive 2001/97/EC of the European Parliament and the Council of 4 December 2001 Amending Council Directive 91/308/EEC on Prevention of the Use of the Financial System for the Purpose of Money Laundering.

15
The Wolfsberg AML Principles are available online at http://www.wolfsberg-principles.com. The Wolfsberg Group consists of the following banks: ABN Amro NV, Banco Santander Central Hispano S.A., Bank of Tokyo-Mitsubishi, Ltd, Barclays Bank; Citigroup, Credit Suisse Group, Deutsche Bank AG, Goldman Sachs; HSBC, J.P. Morgan Chase, Société Générale and UBS AG.

16
See Articles 6 and 7 of the United Nations Convention against Trans-national Organized Crime, adopted by resolution A/RES/55/25 of 15 November 2000 at the fifty-fifth session of the General Assembly of the United Nations; available at http:// www.uncjin.org.

17
Sections 327-340 of the Proceeds of Crimes Act 2002, available at http:// www.hmso.gov.uk.

18
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, Title III.

19
See Sharing of Financial Records Between Jurisdictions in Connection with the Fight Against Terrorist Financing, Basel Committee Publication No. 89, April 2002. The Basel Committee's members are Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. It is based in the Bank of International Settlements in Basel. It has about thirty technical working groups and task forces which also meet regularly. It "formulates broad supervisory standards and guidelines and recommends statements of best practice in the expectation that individual authorities will take steps to implement them through detailed arrangements - statutory or otherwise - which are best suited to their own national systems": see http://www.bis.org/bcbs/ aboutbcbs.htm.

20
See Article 8.1 and 8.2 of the OECD Bribery Convention; see also Article III.10 of the Inter-American Convention against Corruption, and Article 4 of the ICC Rules of Conduct: Extortion and Bribery in International Business Transactions in François Vincke, Fritz Heimann & Ron Katz, Fighting Bribery: A corporate practices manual (ICC publication 610). [see also Fighting Corruption (ICC publication 652)].

21
Regulation (EC) No. 1606/2002 of the European Parliament and the Council of 19 July 2002 on the Application of International Accounting Standards;Official Journal L243, 11/09/2002 P. 0001-0004.

22
The World Bank Group, World Development Report 2002-Building Institutions for Markets, pages 105-110; available at: http://econ.worldbank.org/wdr/WDR2002.

23
See, for example, Article 34(2)(b) of the UNCITRAL Model Law; Article 1504 of the New Code of Civil Procedure (France); Article 190.2.e of the Private International Law Statute (Switzerland).

24
Article V.2.b of the New York Convention provides: "2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: ...... b) The recognition or enforcement of the award would be contrary to the public policy of that country.…"

25
See J. Giles Wetter, "Issues of Corruption Before International Arbitral Tribunal: the Authentic Text and True Meaning of Judge Gunnar Lagergren's 1963 Award in ICC Case No.1110," (1994) 10 Arbitration International 277-294.

26
For the statement of the Westacre arbitral tribunal, see footnote 1 above; cf. ICC Award 6497 of 1994, (1999) Yearbook of Commercial Arbitration XXIV, 71-79 at 73: "… The demonstration of the bribery nature of the agreement has to be made by the Party alleging the existence of bribes… A civil court, and in particular an arbitral tribunal, has not the power to make an official inquiry and has not the duty to search independently the truth…."

27
Judge Lagergren invoked the administration of justice as a ground to justify his approach: see J. Giles Wetter, "Issues of Corruption Before International Arbitral Tribunal: The Authentic Text and True Meaning of Judge Gunnar Lagergren's 1963 Award in ICC Case No.1110," (1994) 10 Arbitration International, 277-294 at 291. On the increasing public responsibilities of international commercial arbitration and the public credibility challenge facing modern arbitrators, a phenomenon particularly associated with the growth of investor-State arbitrations, see Bernardo M. Cremades and David J. A. Cairns, "The Brave New World of Global Arbitration," (2002) 3 Journal of World Investment, 173-209, at 192-209.

28
The World Bank Group, World Development Report 2002 - Building Institutions for Markets, page 106, available at: http://econ.worldbank.org/wdr/WDR2002.

29
The US Department of Justice web site on the Foreign Corrupt Practices Act refer to these "red flags": "… unusual payment patterns or financial arrangements, a history of corruption in the country, a refusal by the foreign joint venture partner or representative to provide a certification that it will not take any action in furtherance of an unlawful offer, promise, or payment to a foreign public official and not take any act that would cause the U.S. firm to be in violation of the FCPA, unusually high commissions, lack of transparency in expenses and accounting records, apparent lack of qualifications or resources on the part of the joint venture partner or representative to perform the services offered, and whether the joint venture partner or representative has been recommended by an official of the potential governmental customer…": See http://www.usdoj.gov/criminal/fraud/fcpa/dojdocb.htm. See also François Vincke, Fritz Heimann & Ron Katz Fighting Bribery: A corporate practices manual (ICC publication 610), Chapter 4 (The Role of Agents and Sales Representatives). [see also Fighting Corruption (ICC publication 652)]. Matthias Scherer "Circumstantial Evidence in Corruption Cases before International Arbitral Tribunals" [2002] Int. A.L.R. 29-40; Karen Mills "Corruption and Other Illegality in the Formation and Performance of Contracts and in the Conduct of Arbitration Relating Thereto" [2002] Int. A.L.R. 126132; and the evaluation of "an accumulation of indications" by the Paris Court of Appeal in European Gas Turbines SA v.Westman International Limited(1995) Yearbook of Commercial Arbitration XX 198-207.

30
Article 8.1 of the OECD Bribery Convention.

31
See, for example, François Vincke, Fritz Heimann & Ron Katz, Fighting Bribery: A corporate practices manual (ICC publication 610) Chapter 6 (Money Laundering). [see also Fighting Corruption (ICC publication 652)].

32
See Kristine Karsten, "Money Laundering: How It Works and Why You Should be Concerned," Paper presented to the ICC Institute of World Business Law, 22 Annual Meeting, November 2002.

33
Article 30 of the UNCITRAL Model Law provides that an award by consent can be made "…if requested by the parties and not objected to by the arbitral tribunal…." During the drafting of the Model Law, concerns were expressed regarding parties seeking awards by consent in cases involving fraud, competition and income tax law violations and conspiracy, and the proposal that an arbitral tribunal should have no discretion to refuse an award recording agreed settlement terms was rejected: see Howard H. Hotlzmann and Joseph E. Neuhaus, A Guide to the UNCITRAL Model Law On International Commercial Arbitration: Legislative History and Commentary(T.M.C. Asser Institut, The Hague, 1989) at 822-835. On the Iran-United States Claims Tribunal, see Stewart Abercrombie Baker and Mark David Davis, The Uncitral Arbitration Rules in Practice: The Experience of the Iran-United States Claims Tribunal (Kluwers, 1992), 184-189.

34
Ahmed S. El Kosheri and Philippe Leboulanger, L'arbitrage face à la corruption et aux trafics d'influence, (1984) 3 Revue de l'Arbitrage 3-18. See also the observations on this issue at J. Giles Wetter, "Issues of Corruption Before International Arbitral Tribunal: The Authentic Text and True Meaning of Judge Gunnar Lagergren's 1963 Award in ICC Case No.1110," (1994) 10 Arbitration International, 277-294 at 278-279.

35
A number of recent articles have explored the difficult issue of proof of corruption in international arbitration; see, for example, Matthias Scherer, "Circumstantial Evidence in Corruption Cases Before International Arbitral Tribunals," [2002] Int. A.L.R. 29-40; José Rosell and Harvey Prager, "Illicit Commissions and International Arbitration," [1999] 15 Arbitration International 329-348.

36
ICC Award 6497 of 1994, (1999) Yearbook of Commercial Arbitration XXIV 71-79, at 73.

37
"…The enterprise having benefited from the bribes (i.e., having obtained substantial contracts thanks to the bribes) has not a better moral position than the enterprise having organised the payment of the bribes. The nullity of the agreement is generally only beneficial to the former, and thus possibly inequitable. But this is legally irrelevant.": ICC Award 6497 of 1994, (1999) Yearbook of Commercial Arbitration XXIV 71-79, at 72.