Introduction

Corruption in international arbitration has been discussed at length in numerous recent publications and decisions. A sub-issue that still needs to be addressed, however, relates to arbitrators' rights and duties when faced during arbitration proceedings with allegations of corruption against a party.

This paper will examine the issue by analyzing the sources and limits of an arbitrator's right and/or duty to investigate corruption, as well as the sources and boundaries of an arbitrator's right and/or duty to report corruption admissions or findings. Finally, the paper will discuss the relevant differences, if any, between commercial and investment treaty arbitration with respect to these issues.

These admittedly are complex questions, and in order to give them the proper attention they deserve, it is important to first understand the significance of corruption and to define the term.

Significance of Corruption

A plethora of national laws and international conventions seek to address corruption and to prosecute corrupt actors. The first significant law was the United States Foreign Corrupt Practices Act (FCPA), which was enacted in 1977 in response to indications of widespread bribery of foreign officials by U.S. companies. The House of Representatives Report on the FCPA articulated the following government concerns:

The payment of bribes to influence the acts or decisions of foreign officials […] is unethical. […] But not only is it unethical, it is bad business as well. It erodes public confidence in the integrity of the free market system. It short-circuits the marketplace by directing business to those companies too inefficient to compete in terms of price, quality of service, or too lazy to engage in honest salesmanship, or too intent upon unloading marginal products. In short, it rewards corruption instead of efficiency and puts pressure on ethical enterprises to lower their standards or risk losing business. 1

Corruption is now condemned by the United Nations,2the Organization for Economic Cooperation and Development (OECD)3and numerous regional conventions.4These various instruments seek to ensure that member states criminalize different forms of corruption and provide a framework for improved international cooperation, while encouraging businesses to promote good corporate governance through codes of conduct and anti-corruption compliance programs.

Furthermore, many countries - both developed and developing - have already enacted laws criminalizing corruption and providing the necessary tools to facilitate cooperation among authorities. One of the most recent and significant legislations is the 2010 U.K. Bribery Act,5which was introduced to update and enhance existing U.K. laws on bribery, including foreign bribery, in order to address the requirements of the 1997 OECD Anti- Bribery Convention more efficiently. The Act, which in many ways mirrors the FCPA, is now one of the strictest international anti-corruption laws.6

In addition to the national and international anti-bribery instruments, dedicated anti-corruption units and a network for sharing financial information7have been established to investigate allegations of corruption and to hold corrupt actors accountable.

International Financial Institutions (IFIs) have also joined the fight against corruption. The World Bank was one of the first IFIs to join the cause in the mid-1990s. Before joining the anti-corruption movement, the World Bank interpreted its Articles of Agreement - specifically Article I and Article IV, Section 10 - as precluding consideration of possible corruption in World Bank-financed projects.

Article I is meant to assist in the economic development of member countries through loans, investment guarantees, and other financial means, while Article IV, Section 10 specifically prohibits the Bank and its officers from interfering in, or being influenced by, the political affairs of member countries. Combating corruption had the potential of drawing the World Bank into governance issues, which are often difficult to separate from political ones. However, beginning in the mid-1990s, the World Bank began to recognize not only the problem of corruption but also the need to develop a system to establish remedial, preventive and punitive measures.8

Since then, the World Bank has established and refined a process to investigate and sanction firms and individuals found to have engaged in fraud, corruption, collusion, coercion and obstruction ("misconduct") in World Bank Group (WBG) supported projects.9The World Bank has a dedicated unit (the Integrity Vice Presidency, or INT) responsible for investigating misconduct. INT has jurisdiction to investigate firms, NGOs and individuals that participate in or seek to participate in WBG-financed activities,10as well as other recipients (including government officials) of World Bank funds.11Following an investigation, if INT concludes that it has obtained sufficient evidence to substantiate allegations of misconduct by a firm, NGO or individual, it may decide to seek sanctions through the WBG Sanctions System.12The WBG cannot sanction government officials, however.13If INT believes that the laws of a member country may have been violated due to the actions of a government official, INT will share its findings and engage with relevant national authorities.

Other IFIs have followed suit and endeavored to consolidate their efforts and harmonize their anti-corruption rules and policies. In this respect, in February 2006, the leaders of the WBG, the African Development Bank Group (AfDB), the Asian Development Bank (AsDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank Group (EIB), the International Monetary Fund (IMF) and the Inter- American Development Bank Group (IaDB) agreed to establish a Joint International Financial Institution Anti-Corruption Task Force (Task Force) "to work towards a consistent and harmonized approach to combat corruption in the activities and operations of the member institutions."14On 17 September 2006, the Task Force signed a joint statement agreeing, among other things, to establish standardized definitions of fraud, corruption, collusion, and coercion, as well as common principles and guidelines for investigations. The Task Force also agreed to strengthen the exchange of information.15

As an important follow-up to this agreement, in April 2010, five of the IFIs (the WBG, the AfDB, the AsDB, the IaDB, and the EBRD) signed an agreement for the mutual enforcement of debarment decisions.16Pursuant to the agreement, the debarment of a company by one of the IFIs for more than a year will normally result in the automatic debarment by the other participating IFIs.17

Despite international and national efforts to fight corruption, corruption remains a serious problem, and it is getting worse. In his address of 1 October 1996, at the Joint World Bank/IMF Annual Meeting, James D. Wolfensohn, the then President of the World Bank, stated:

And let's not mince words: we need to deal with the cancer of corruption.

In country after country, it is the people who are demanding action on this issue. They know that corruption diverts resources from the poor to the rich, increases the cost of running businesses, distorts public expenditures, and deters foreign investors. They also know that it erodes the constituency for aid programs and humanitarian relief. And we all know that it is a major barrier to sound and equitable development.

Similarly, in his Foreword to the 2003 United Nations (UN) Convention against Corruption, the then UN Secretary-General Kofi Annan described corruption as "an insidious plague that has a wide range of corrosive effects on societies [and] undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish."

As early as 1971, François Mitterrand, the then First Secretary of the French Socialist Party, declared in his speech of Epinay:

Celui qu'il faut déloger […] c'est […] l'argent, l'argent qui corrompt, l'argent qui achète, l'argent qui écrase, l'argent qui tue, l'argent qui ruine, et l'argent qui pourrit jusqu'à la conscience des hommes! 18

Each year, Transparency International publishes a Corruption Perceptions Index that measures the perceived levels of public sector corruption worldwide, scoring each country from 0 (highly corrupt) to 100 (very clean). The 2013 Index covered 177 countries, with more than two-thirds of them scoring less than 50.19According to the World Bank, between US$1 trillion and US$1.6 trillion are lost globally each year to corruption.20

Definition of Corruption

Commentators tend to use the term "corruption" loosely. Corruption can mean different things depending on the definition used, but it is usually understood to mean the offering or giving of a bribe or kickback to influence the actions of another party.21A kickback is typically understood to be a bribe paid incrementally as payment for services rendered or received, and kickbacks are generally a percentage of the value of the contract.

However, a bribe or kickback is not necessarily limited to monetary benefits. Rather, it can be anything of value meant to influence a public official (or an employee in a private sector company). Things of value can include one or more of the following: (i) expensive gifts, paid travel, and lavish entertainment; (ii) "study tours" that are in reality shopping excursions; (iii) employment of public officials' children and/or spouses (or close personal relations); (iv) lease or purchase of living accommodations for public officials, their children, and/or spouses (or close personal relations); and (v) home renovations.

If payments are made, they are usually very difficult to detect, absent an inside source. Payments are almost invariably made in cash and are either an "on the books" scheme or an "off the books" scheme. If an "on the books" scheme is being used, the payments will typically be made through local subcontractors or agents, and such payments will be recorded on the books as legitimate fees, commissions or expenses. For example, in a joint venture agreement, the lead partner (usually an international company) may instruct the local partner to create false transportation or goods/ supplies invoices, or to inflate such invoices by a percentage until the corrupt payments are satisfied. Companies that engage in such schemes usually use specific headers or acronyms for the false or inflated invoices.

If a third party (an agent or a consultant) is used in an "on the books" scheme, a number of red flags denote possible corruption, and these can be considered as circumstantial evidence of a corrupt arrangement. In these instances, numerous different resource guides set out possible red flags of corruption. For example, the U.S. Department of Justice sets out in its Resource Guide to the U.S. Foreign Corrupt Practices Act the following "[c]ommon red flags" of corruption where third parties are used:

• excessive commissions are paid to third-party agents or consultants;

• unreasonably large discounts are given to third-party distributors;

• third-party consulting agreements include only vaguely described services;

• the third-party consultant is in a different line of business than for which he or she has been engaged;

• the third party is related to or closely associated with the foreign official;

• the third party became part of the transaction at the express request or insistence of the foreign official;

• the third party is merely a shell company incorporated in an offshore jurisdiction; and

• the third party requests payment to offshore bank accounts.22

In addition to the above, other red flags are: (i) the agent is not identified in the contract; (ii) there is no documentary evidence showing that the agent or consultant provided any deliverables; and (iii) the books and records of the company make only vague references to the agent or consultant as compared to other agents or consultants used by the company.

If an "off the books" scheme is used, identifying the corrupt money flow becomes exponentially more difficult. An "off the books" scheme can consist of the issuance of stock in a company, the transfer of real estate, or any other thing of value that is not easily detectible absent the availability and use of judicial search and seizure powers.

In short, "corruption" is often difficult to prove,23irrespective of the standard of proof a tribunal may decide to apply. Compounding the problem is the fact that a contract may be tainted by other forms of misconduct in addition to, or separate from, corruption. The contract may have been awarded due to a collusive scheme,24fraud,25or coercion26- or there could be elements of each of these types of misconduct in the award of a contract. For example, a company may have colluded with a senior government official to ensure that it is selected for the award of a lucrative contract; the company agreed to compensate the official; and the company coerced the local sub-consultant to submit false invoices to cover up the corrupt payments.

Companies - whether through "on the books" or "off the books" schemes - take measures to cover up corruption through transactions that appear lawful. Such transactions often consist of agency and consulting contracts, and partnership and cooperation agreements. These types of agreements can lead to disputes. For example, the senior management of a company may discover the corrupt arrangement (either through an audit or a transfer of ownership) and thereafter refuse to pay, or a company may simply refuse to honor the arrangement in whole or in part. Further, a company may hire one agent and make financial commitments to him or her, only to discover that a different agent has closer ties to senior government officials, and the first agent's contract is thereafter terminated.

In the fight against corruption, there is an obvious risk that unscrupulous parties may refer disputes such as those contemplated above to arbitration with the understanding that at least traditional arbitration, with its private nature, is less likely to expose the true nature of their dealings than traditional litigation before the courts. As it has been rightly pointed out:

In such disputes neither party will wish to refer the matter to the state courts for understandable reasons: court proceedings are public, can attract attention of the mass media and lead to scandal. However, their ultimate fear is that the judge will refer the case to the police causing their private dispute to end in criminal proceedings. Instead, they will be more inclined to submit the dispute to arbitration in the expectation that they will be guaranteed the confidentiality they seek and that, as many arbitrators do not see themselves under any obligation to investigate suspicious contracts or report them to law enforcement bodies, they will escape the risk of criminal prosecution. Unfortunately, the expectation is sometimes met.27

When arbitrators are confronted with issues of corruption in these types of disputes, they need to decide whether they have jurisdiction over these matters and determine the scope and extent of their power to investigate. Implicit in this assessment is the legal standard to be applied, and when and in what situations arbitrators have a duty to report suspicions or findings of corruption to relevant national authorities.

Sources and Limits of an Arbitrator's Right and/or Duty to Investigate Corruption

Historically, arbitration was considered to be an inappropriate forum for addressing and deciding claims of corruption.28This view was based principally on the concern regarding a tribunal's ability to compel the production of evidence and a tribunal's lack of authority to impose criminal penalties.29When an issue of corruption was raised in arbitration, the usual response was for the tribunal to conclude that it lacked jurisdiction.30

The seminal case taking this view was International Chamber of Commerce (ICC) Case No. 1110 (1963),31where the arbitrator, Judge Gunnar Lagergren, noted that the parties' agreement "contemplated the bribing of Argentine officials for the purpose of obtaining the hoped-for business."32While acknowledging that their commission agreement involved the bribery of government officials, both parties had requested the arbitrator to decide the case without reference to the corrupt purpose of the agreement. In declining jurisdiction, Judge Lagergren observed that "contracts which seriously violate bonos mores or international public policy […] cannot be sanctioned by courts or arbitrators,"33and "[p]arties who ally themselves in an enterprise of the present nature must realise that they have forfeited any right to ask for the assistance of the machinery of justice (national courts or arbitral tribunals) in settling their disputes."34

This position was not followed, however, by national courts and arbitral tribunals in later years. The concept of arbitrability of disputes involving bribery claims gained its first acceptance in 1993 with a decision of the Swiss Federal Tribunal35ruling that an arbitration agreement would survive even though the main consultancy agreement was an agreement for the payment of a bribe. In a series of arbitral awards, tribunals also held that allegations of corruption would not deprive them of jurisdiction. Thus, an ICC arbitral tribunal concluded in 1994 that it had jurisdiction to hear a claim of corruption.36The High Court of England and Wales, in agreeing to enforce the ICC award, stated:

It is necessary to consider both, on the one hand, the desirability of giving effect to the public policy against enforcement of corrupt transactions and, on the other hand, the public policy of sustaining international arbitration agreements. One consequence of the arbitrators being accorded jurisdiction might be that they gave effect to a contract which, on the face of the award, was held to involve the payment of bribes. It would then be a matter for consideration at the enforcement stage whether, although the arbitrators had jurisdiction to determine the issue, the award should be enforced because they had exceeded their jurisdiction in giving effect to an illegal contract or had misconducted themselves […] or because enforcement would be contrary to public policy. […] In so far as it involves determination of questions of fact, that is an everyday feature of international arbitration. The opportunity for erroneous and uncorrectable findings of fact arises in all international arbitration. If much weight were to be attached to that consideration it is difficult to see that arbitrators would ever be accorded jurisdiction to determine issues of illegality. 37

It is now generally accepted that arbitrators have jurisdiction over disputes that involve claims of corruption. This is recognized under the doctrine of Kompetenz-Kompetenz, whereby arbitrators have the power to decide whether they have jurisdiction over an issue.38Further, under the doctrine of separability, the arbitration agreement is considered to be separate and independent from the main contract of which it is part. This holds true even if a tribunal ultimately decides that the main contract is null and void because it is tainted by corruption.39

Allegations of corruption are most often raised by the parties to an arbitration. Inasmuch as the disposition of the parties' claims or defenses is inextricably linked to any substantiated allegations of corruption, an arbitral tribunal has a duty to investigate the allegations and draw any conclusions based on an affirmative finding of corruption. Thus, an ICC arbitral tribunal recently held:

Every arbitrator is therefore under an obligation to vigorously oppose corruption. Accordingly, if during an arbitration proceeding allegations are made that the underlying legal transaction is affected by corrupt practices, the arbitrator cannot ignore these facts but must instead investigate, collect arguments and evidence to corroborate or reject the accusations, and assess their implications on the parties' claims.

In compliance with this duty, the Arbitral Tribunal fixed a procedural stage - not envisaged in the original timeframe - to ensure that each party would have ample opportunity to present its arguments regarding the effect which the acts of corruption would have on the case. 40

A different question arises, however, when neither party makes an affirmative claim of corruption but where the record of evidence leads the arbitral tribunal to suspect corruption. Would the tribunal in such situations be overstepping its mandate if it were to investigate issues of corruption sua sponte?

Two conflicting legal arguments should be considered. On the one hand, if an arbitral tribunal raises corruption issues on its own motion, it risks having its award set aside by a court of the seat of arbitration, or the award may be denied recognition and enforcement by a foreign court, on the basis that the tribunal acted ultra petita by dealing with a dispute outside its mandate.41On the other hand, if an arbitral tribunal disregards the potential existence of corruption and issues an award without probing ex officio the existence of corruption, the award risks being set aside by the court of the seat of arbitration or by a foreign court on public policy grounds, both national and international.42

It is generally accepted that considerations of international public policy should take precedence over other legal principles.43This is particularly the case since legislative and conventional provisions authorizing state courts to set aside or refuse recognition and enforcement of awards on the basis that arbitrators exceeded their authority by dealing with a dispute not submitted to them are narrowly construed by state courts.44

There is another policy consideration that should encourage arbitrators to investigate issues of corruption sua sponte. Arbitrators are not solely manifestations of party autonomy;45they also perform a public function, namely that of rendering decisions having the same force as judgments issued by state courts.46They cannot therefore allow illicit activities to circumvent legal accountability.

Recent developments in arbitral case law seem to indicate a shift in this regard, and the arbitrators' authority to investigate allegations of corruption sua sponte is gaining acceptability. In 1994, two ICC awards categorically rejected the idea that, short of being expressly raised by the parties to an arbitration, an arbitral tribunal could investigate on its own motion the existence of bribes. Thus, in ICC Case No. 6497 (1994),47the arbitral tribunal held:

The demonstration of the bribery nature of the agreement has to be made by the Party alleging the existence of bribes (hereafter the "alleging Party"). 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. A civil court has to hear the allegations and the proofs offered by the parties. The "alleging Party" has the burden of the proof. If its demonstration is not convincing, the tribunal should reject its argument, even if the tribunal has some doubts about the possible bribery nature of the agreements. 48

Similarly, in ICC Case No. 7047 (1994),49the majority of the arbitral tribunal decided:

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 within the time limits allowed to him for presenting facts. 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, as any State court, must be convinced that there is indeed a case of bribery. A mere "suspicion" by any member of the arbitral tribunal, communicated neither to the parties nor to the witnesses during the phase to establish the facts of the case, is entirely insufficient to form such a conviction of the arbitral tribunal. 50

Against this background, a recent ICC award stated:

The Tribunal shares the view that if a suspicion of corruption has materialised, it would be under a duty to carry, even sua sponte, enquiries and investigations regarding the irregularities. 51

Similarly, in Metal-Tech Ltd. v Republic of Uzbekistan,52an ICSID tribunal, upon discovering that the claimant made suspiciously large payments to consultants with government connections, exercised its ex officio powers to issue procedural orders requesting the production of additional documents relating to the consulting agreements. After reviewing the evidence, including the consultants' lack of qualifications and the lack of proof regarding the services rendered under the consulting agreements, the tribunal concluded that the consultants were paid to facilitate the establishment of the investment, in violation of Uzbek criminal law and the legality requirement of the Israel-Uzbekistan bilateral investment treaty. The tribunal not only made history by becoming "the first tribunal to dismiss an investment treaty arbitration case on corruption grounds," but also for "establish[ing] a precedent for other tribunals to rely on red flags and other circumstantial evidence to find corruption."53

Having established that an arbitral tribunal possesses authority to investigate suspicions of corruption sua sponte, it is necessary to determine the limits of this extraordinary power.

A principal limitation is the parties' right to due process. Once an arbitral tribunal suspects the existence of corruption in a case and decides to further investigate such corruption, the parties should be fully apprised of the tribunal's suspicions of corruption and provided with a reasonable opportunity to make submissions on the matter.54

In addition, an arbitral tribunal's sua sponte investigation of suspected corruption is legitimate only if the suspected illegality is directly relevant to the parties' claims and defenses, and the outcome of the investigation could affect the resolution of the dispute submitted to the tribunal. Furthermore, the entire investigative mechanism should only be commenced if prima facie evidence of wrongdoing or red flags denoting possible corruption exist. In this respect, it was rightly observed:

A laissez-faire attitude that closes its eyes to all evidence of corruption is as undesirable as an over-zealous approach to detecting corruption, which will bog down arbitral proceedings with unnecessary demands for information and explanation, at the expense of parties who are likely to be innocent of wrongdoing. This would compromise the institution of international arbitration as surely as ignoring compelling evidence of corruption would. 55

However, a more fundamental issue needs to be addressed, namely, whether tribunals are competent to decide issues of corruption singlehandedly, i.e., without the benefit of an independent investigation by a third party.

As discussed above, depending on the facts of the case, corruption may be a very complex issue. In international arbitration, a party claiming the existence of corruption may or may not have had its claim investigated and prosecuted by national authorities. Moreover, criminal proceedings (investigations and prosecutions) can last years or may never be concluded. If tribunals were to wait for such proceedings to conclude, a party could delay or avoid liability for breach of contract by presenting prima facie evidence of corruption to the tribunal, and then requesting the tribunal to wait until the criminal proceedings are finished. Even if criminal proceedings take place, the tribunal may not be confident that the investigation and prosecution were carried out objectively, thoroughly, and with due process.

In most situations, however, an investigation did not take place, and the tribunal must therefore rely on the evidence presented by the parties. It is perhaps for this reason that a great deal of scholarship on the issue of claims of corruption in arbitration focuses on the burden of proof - i.e., tribunals are struggling to find a way to deal with claims of corruption without the benefit of being satisfied that they have all relevant facts before them.

In this respect, there is substantial inconsistency among tribunals regarding the appropriate standard for proving corruption, with some tribunals concluding that a lower standard of proof should be applied (e.g., more likely than not), and others adopting the approach that a much higher standard (e.g., clear and convincing evidence) should be applied. Proponents of the more relaxed standard recognize that arbitrations are civil rather than criminal proceedings, and that tribunals lack the enforcement powers of a criminal court to compel the production of evidence or the power to impose criminal sanctions.56Proponents of a more rigorous standard tend to be of the view that the seriousness of the accusations demands a high standard of proof.57This was the position taken by the tribunal in EDF (Services) Limited v Romania, where it concluded: "The seriousness of the accusation of corruption […] demands clear and convincing evidence."58

While tribunals can order the parties to produce evidence and call on experts to testify, such procedures are of limited value in cases of corruption, particularly as it is impossible to determine whether the parties are providing accurate and complete information. An alternative would be for the tribunal (when a prima facie claim of corruption has been made) to order one or both of the parties to make their books, records, and employees available to a third-party forensic auditor/investigator, according to the terms of reference established by the tribunal. General provisions in the terms of reference could set out the definitions of misconduct, and the standard to be used, and could include language such as the following:

The investigation will rely on interviews of witnesses and on the collection and analysis of project, tender, contract, and other relevant documents and information.

The investigation will include a forensic audit. Forensic audits involve fact-finding activities undertaken to resolve specific matters, such as determining the veracity of an allegation of possible fraud, corruption, or other financial wrongdoing.

The investigator must be satisfied that the information collected is (i) complete and (ii) accurate. Complete and accurate shall mean:

a. The investigator is satisfied that: (i) he or she has all the information that the investigator deems relevant to the contract or contracts under review; and (ii) all information has been classified and characterized correctly and appropriately.

b. The investigator has been able to: (i) test and analyze up to 100% of transactions and records he or she deems relevant; (ii) undertake an independent verification of the information provided; (iii) conduct additional inquiry through interviews of employees; (iv) access any other hard copy or electronic information deemed relevant by the investigator; and (v) seek to verify the entity's classification of information, which may require a review of non-contract information.

c. The subject of the investigation has prepared a letter, if requested by the investigator, that: (i) briefly describes the process it undertook to preserve, collect, and produce documents; and (ii) identifies the team members who were involved in this process, the sources (including custodians) from where documents were collected, and the criteria used to determine whether documents were responsive to the investigator's request(s).

d. The subject has prepared a representation letter, if requested by the investigator, stating that it has provided complete and accurate information and that it has made no misrepresentations.

Counsel is permitted to attend the execution of the audit provided that counsel does not delay, impede, or otherwise obstruct the conduct of the audit.

The investigator will determine the time necessary to complete the investigation and ensure that the information he or she has received is complete and accurate.

Any actions that unreasonably delay or limit the investigator's ability to obtain complete and accurate information required as part of the investigation may result in adverse inferences being drawn.

Subjects of the investigation may not refuse or fail to provide requested information to an investigator during the course of an investigation based on claims of privacy, confidentiality, or self-incrimination. Adverse inferences may be drawn due to a failure to provide any requested information.

A third-party investigation constitutes no guarantee that claims of corruption will always be resolved. Parties may destroy records, witnesses may be intimidated, the corruption scheme may be "off the books," or other reasons may make it impossible to substantiate the claim. However, the benefit of a third-party investigation, where warranted, would outweigh the uncertainty that tribunals experience when rendering decisions with incomplete evidence. The parties should, however, be provided with an opportunity to comment on and respond to the findings of the thirdparty investigator.

Sources and Boundaries of the Arbitrator's Right and/or Duty to Report Corruption Admissions or Findings

The issue to be discussed is whether an arbitrator, who in the course of the arbitration proceedings becomes aware of corrupt activities and reports such activities to the appropriate authorities, violates his or her obligation to maintain the confidentiality of the arbitration proceedings. Can these seemingly conflicting duties be reconciled?

Before answering this question, it is necessary to demystify a myth, namely that of the confidentiality of arbitration proceedings. The Report of the International Commercial Arbitration Committee of the International Law Association on Confidentiality in International Commercial Arbitration of 2010 (ILA Report) observes that there is confusion between the privacy and confidentiality of arbitration proceedings.59The two concepts, though related, are distinct.60"Privacy" is understood to mean that only the parties to an arbitration may participate in arbitration proceedings, whereas "confidentiality" is understood to relate to the parties' obligation not to disclose arbitration information to third parties.61

Many national laws do not cover confidentiality, and those that do vary in their approach and scope.62National jurisprudence on the issue is equally varied.63Finally, while the majority of institutional rules include provisions on confidentiality, these vary considerably in detail and scope.64

In an international commercial arbitration, different laws govern different aspects of confidentiality. The first law to consider is the law of the seat of arbitration, as it "governs most aspects relating to the conduct of the arbitration and the duties of the parties and the rights and duties of the arbitrators."65Within the context of the law of the seat, arbitral institutions may enact specific rules on the subject of confidentiality. Other possible sources of law include: (i) the law governing the arbitration agreement (if the confidentiality obligations are the subject of contractual undertakings); (ii) the law governing the merits of the dispute (if different from the one governing the arbitration confidentiality agreement); (iii) the law governing the professional obligations of certain participants to the arbitration, notably the attorneys; and (iv) the laws of multiple other fora, particularly in regards to mandatory exceptions to confidentiality.66Such exceptions may include those of "public interest," "public purpose," or "the interests of justice."67

As the ILA Report notes:

The principal conclusion [to be drawn from the varied legislation and rules] […] is that it is impossible to speak in the abstract of the existence or non-existence of confidentiality obligations, or of the limits of such obligations. There exists a multitude of laws and rules which purport to govern the subject and which differ significantly in their approaches and solution[s]. In most international arbitrations the duties of all the different participants to disclose or refrain from disclosing given information will potentially be affected by several laws which may be applicable by virtue of different conflict of laws principles and which may on occasion even be squarely in conflict with each other. The applicability of these different rules in any given case is not easy to foresee beforehand.68

The arbitrator's duty of disclosure arises principally from national legislation to which he or she is subject (though it can also arise from the law of the seat of arbitration). Thus, in a case in which corruption is expressly raised or in which the arbitrators address corruption sua sponte, it is possible for arbitrators in a three-member arbitration tribunal to be subject to three different regimes.

It is impossible to generalize solutions that would apply universally to all situations, particularly as the solutions in each case will obey specific circumstances and variables. Arbitrators ought to be vigilant and proceed warily, ensuring that they do not expose themselves to liability, or worse, are considered accomplices to illicit undertakings.

It is possible nevertheless to propose solutions to three scenarios. These solutions should be evaluated in the light of all other relevant circumstances in a given case. In the first scenario, the relevant law (or arbitration rules) governing confidentiality stipulates that there is no obligation to maintain the confidentiality of the arbitration proceedings. On the other hand, the national legislation to which the arbitrator is subject mandates disclosure of possible corruption. This scenario seems straightforward. There is no conflict of duties, and the arbitrator should disclose possible corruption to the relevant authorities.

In the second scenario, the relevant national legislation to which the arbitrator is subject requires that possible corruption be disclosed to appropriate regulatory authorities. Unlike the previous scenario, however, there is also an express or implied obligation of confidentiality in the relevant law (or the arbitration rules) that governs the arbitration proceedings. Although these are conflicting obligations, the duty of disclosure overrides the obligation of confidentiality. The disclosure of confidential information in this scenario was recognized in the ILA Report as a mandatory exception to an obligation of confidentiality: "Reasonable exceptions to an obligation of confidentiality may include: […] (c) making a disclosure required by law […]."69Article 3, paragraph 13, of the IBA Rules on the Taking of Evidence in International Commercial Arbitration of 2010 stipulates an identical outcome:

Any Document submitted or produced by a Party or non-Party in the arbitration and not otherwise in the public domain shall be kept confidential by the Arbitral Tribunal and the other Parties, and shall be used only in connection with the arbitration. This requirement shall apply except and to the extent that disclosure may be required of a Party to fulfil a legal duty[…].

In this regard, some institutional rules that provide for confidentiality of arbitration proceedings allow exceptions to the duty of confidentiality if required by law. For example, Article 30.2 of the Arbitration Rules of the London Court of International Arbitration (LCIA) of 2014 provides: "The deliberations of the Arbitral Tribunal shall remain confidential to its members, save as required by any applicable law […]."70Similarly, Article 76(a) of the WIPO Arbitration Rules of 2002 provides:

Unless the parties agree otherwise, the Center and the arbitrator shall maintain the confidentiality of the arbitration, the award and, to the extent that they describe information that is not in the public domain, any documentary or other evidence disclosed during the arbitration, except to the extent necessary in connection with a court action relating to the award, or as otherwise required by law. (Emphasis added.)

The ILA Report emphasizes, however, that disclosures made under an exception to the obligation of confidentiality should be reasonable. Each disclosure should be "no broader than necessary to satisfy the legitimate purpose of the disclosure."71

Under the third scenario, the relevant law (or arbitration rules) governing the arbitration proceedings confirms the duty of confidentiality. There is, however, no legal obligation under the national laws for the arbitrator to disclose corrupt activities. In this context, the arbitrator still has a duty to disclose possible corruption to relevant authorities if such disclosure serves a public interest or public purpose, or is made in the interests of justice.

There are, however, situations where competing concerns warrant an obligation not to disclose corrupt activities. In these circumstances, a decision not to disclose information or evidence would likely be influenced by the following types of considerations: (i) concern that the national authority does not have in place adequate due process protections; (ii) recognition that the penalty for corruption in the particular jurisdiction could be cruel or unusual (e.g., the death penalty for corruption); or (iii) concern that the appropriate authorities are not credible and may seek to retaliate (economically or physically) against the accuser, or other parties. These are difficult and at times subjective considerations that could complicate an arbitrator's decision whether to disclose to the relevant national authorities.

A final question concerns the role, if any, of arbitration institutions with respect to the duty of disclosure. Should an arbitral tribunal become aware of possible corruption, it would under normal circumstances seek guidance from the appropriate arbitration institution. This would result in indirect involvement of the arbitration institution. In this situation, arbitrators must still assume their own responsibility of disclosing possible corruption when appropriate.

In some instances, however, arbitration institutions may become directly involved. This could arise, for instance, if an arbitration institution learns about corruption before a tribunal is constituted, or if the institution becomes aware that a tribunal is cognizant of possible corruption but elects not to report it. Under these circumstances, the duty to report falls on the institution itself.

Differences Between Commercial and Investment Treaty Arbitration

Lastly, the question remains whether there are differences between commercial and investment treaty arbitration with respect to the arbitrator's duty to investigate corruption and the arbitrator's duty to report corruption admissions and findings. In short, there are no significant differences between the two, and the slight differences affect not the existence of the duty to investigate and report corruption but rather the degree of such duty.

In commercial and investment arbitration, the arbitrator's duty to investigate possible corruption includes the duty to investigate when prompted by the parties, as well as the duty to investigate on the arbitrator's own motion. Arguably, the duty to investigate corruption should be stronger in investment arbitration (notably in arbitrations taking place under the ICSID Convention) than in commercial arbitration.

In commercial arbitration, if an arbitrator disregards the possible existence of corruption and issues a decision without addressing potentially illegal activities, state courts may deny the recognition and enforcement or set aside the award on public policy grounds. The same does not hold true, however, in the ICSID system. Under the ICSID Convention system, domestic courts are prevented from reviewing ICSID awards, and national courts cannot set aside ICSID awards, even on the grounds of public policy.

It is true that the ICSID system provides for internal mechanisms to review awards, and notably for a process of annulment under Article 52 of the ICSID Convention. Ad hoc committees constituted under Article 52, however, have the authority to annul awards only under one of five narrow grounds for annulment provided under Article 52(1) of the ICSID Convention.

While "corruption on the part of a member of the [t]ribunal" is a ground for annulment under Article 52(1)(c) of the ICSID Convention, corruption on the part of a party to the arbitration is not listed as a ground for annulment. Article 52(1)(b) of the ICSID Convention provides that either party may request annulment of an award if the "[t]ribunal has manifestly exceeded its powers." In this respect, a tribunal's failure to exercise jurisdiction in a matter within its competence is generally considered an excess of powers by the tribunal.72It would be very difficult, however, for a party that failed to raise corruption allegations before an arbitral tribunal to later argue before an ad hoc committee that the tribunal's failure to investigate corruption sua sponte constitutes a manifest excess of the tribunal's powers. The arbitrators' duty to investigate corruption is thus particularly critical in the case of ICSID arbitration if unscrupulous parties are to face legal accountability.

Conversely, with respect to the arbitrators' duty to report corruption admissions and findings to the appropriate authorities, while the same obligation exists in both commercial and investment arbitration, arguably the obligation should be more pronounced in commercial arbitration.

Commercial arbitration remains shrouded in mystery, and confidentiality often extends not only to awards and decisions, but also to the mere existence of a case, as well as the names of the arbitrators, the parties, and the law firms representing them. While this may appear paradoxical in the Internet age, confidentiality remains an important factor for some parties when opting for commercial arbitration rather than traditional litigation. The risk that the privacy, if not the confidentiality, of the arbitration proceedings will keep the appropriate regulatory authorities uninformed of serious corruption charges is obvious.

By contrast, transparency is becoming the norm in investment arbitration, as investment arbitration routinely raises issues of public interest. Most investment arbitration awards are made public by either the parties or, under certain conditions, by the arbitration institutions. Furthermore, the 2006 amendments to the ICSID Arbitration Rules empower ICSID tribunals to allow non-disputing parties to observe oral hearings, unless either party objects.73They also confirm ICSID tribunals' authority to receive amicus curiae submissions in appropriate cases.74More recently, the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, which came into effect in 2014, provide for the publication of a wide range of documents, including the notice of arbitration, the written submissions by disputing parties and by third parties, transcripts of hearings, orders, decisions, and awards of the arbitral tribunal. They also provide for public hearings, subject to some exceptions.

In a speech at a Conference in Sharm El Shaikh on 16 November 2014, the Principal Legal Officer at UNCITRAL, Timothy Lemay, stated: "[T]ransparency is for the benefit of the public. We see it as also beneficial for States as it promotes good governance, and it may also serve as a means to counter corruption." It is evident that through their submission of amicus curiae, third parties, including non-governmental organizations, can draw the tribunals' attention to the existence of corruption that falls within the scope of the dispute.

At a time of extensive and growing transparency in investment arbitration, the question arises whether much is left for an arbitral tribunal to disclose to relevant authorities. In investment arbitration, this question may soon become a non-issue or a faux probleme.

Conclusion

International arbitration is experiencing an ongoing transformation. The current arbitration landscape differs significantly from that of just a few decades ago. While Judge Lagergren in 1963 declined jurisdiction in a case involving corruption on the basis that corruption renders a dispute nonarbitrable, nowadays disputes tainted by corruption are not only arbitrable, but arbitrators go as far as to investigate sua sponte allegations of corruption when appropriate.

Whether or not corruption allegations are raised, foreign arbitral awards continue to be occasionally refused recognition and enforcement, and awards continue to be sometimes annulled at the seat of arbitration. Furthermore, arbitrators today are increasingly subject to public scrutiny. Public information is disseminating rapidly about arbitrators being sued before national courts for alleged lack of impartiality, and many are choosing to purchase professional liability insurance. Arbitration institutions also face lawsuits from disgruntled users.

More generally, heated public discourse about the legitimacy of the international arbitration system has intensified. Concerns about transparency, particularly in the area of investment arbitration, have ushered in major changes to the traditionally private nature of arbitration.

While increased scrutiny has brought fundamental changes to international arbitration, the process of reforming the selection of arbitrators has been slow to follow the trend. In this respect, a legitimate question arises regarding the capacity of arbitrators to assume critical responsibilities, such as investigating corruption allegations, at a time when doubts are routinely raised about the arbitrators' own adherence to strict ethical guidelines.

We cannot sequester ourselves in a room, open a tiny window, keep the main door locked, and expect the wind not to blow in. The wind has already entered, and all indicators point to an immediate need for a systemic change. Strengthening the rules on conflicts of interest in the appointment of arbitrators will enhance the legitimacy of appointments and the credibility of appointees, and thus boost their credentials to address the thorny issue of corruption.

1
H.R. Report No. 95-640, at 4-5 (1977).

2
See United Nations Convention against Corruption (2003).

3
See the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997).

4
See, e.g., the Inter-American Convention Against Corruption (1996) and the African Union Convention on Preventing and Combating Corruption (2003). For European conventions, see, e.g., the European Union Convention on the Fight Against Corruption Involving Officials of the European Communities or Officials of Member States of the European Union (Council Act of 26 May 1997); Council of Europe Criminal Law Convention on Corruption (1999); Council of Europe Civil Law Convention on Corruption (1999); and European Union Council Framework Decision on Combating Corruption in the Private Sector (2003).

5
See U.K. Bribery Act 2010, available at http://www.legislation.gov.uk/ukpga/2010/23/contents

6
See http://www.transparency.org.uk/our-work/business-integrity/bribery-act.

7
In 1995, a small group of national agencies was created (now known as the Egmont Group) to share financial information. The national agencies are now referred to as Financial Intelligence Units (FIUs). The objective of the Egmont Group is to provide a forum for FIUs from around the world to better equip their respective governments to fight against money laundering, terrorist financing, and other financial crimes. There are currently over 130 FIUs around the world.

8
The emergence of the World Bank's willingness to engage in governance and anti-corruption work is reflected in the 1990 and 1995 memoranda of the then World Bank General Counsel, Ibrahim F.I. Shihata. See "Issues of Governance in Borrowing Members - The Extent of Their Relevance Under the Bank's Articles of Agreement, Legal Memorandum of the General Counsel" (21 December 1990) (SecM91-0131, 5 February 1991); and "Prohibition of Political Activities in the Bank's Work, Legal Opinion of the General Counsel" (11 July 1995) (SecM95-707, 12 July 1995). These two papers of the General Counsel are published at pages 248 and 219 respectively of Shihata, Ibrahim F. I., The World Bank Legal Papers (Martinus Nijhoff Publishers, 2000). Dr. Shihata recognized that the World Bank could address corruption as an economic concern consistent with the purposes set out in the Articles of Agreement and the provisions prohibiting political considerations.

9
For a history of the World Bank's sanction reform, see http://web.worldbank. org/WBSITE/EXTERNAL/TOPICS/EXTLAWJUSTICE/0,,contentMDK: 22944789~menuPK:9203924~pagePK:148956~piPK: 216618~theSitePK:445634,00.html.

10
This is reflected in the Procurement, Consultant and Anti-Corruption Guidelines, as well as in the World Bank Sanctions Procedures.

11
See Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, para. 5 (Oct. 2006, revised Jan. 2011).

12
This is reflected in the Procurement, Consultant and Anti-Corruption Guidelines, as well as in the World Bank Sanctions Procedures.

13
See Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, para. 11 (Oct. 2006, revised Jan. 2011).

14
The February 2006 meeting is referred to in the Uniform Framework for Preventing and Combating Fraud and Corruption, para. 1 (signed 17 September 2006).

15
Joint Statement by the Heads of the African Development Bank Group, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank Group, Inter-American Development Bank Group, International Monetary Fund and World Bank Group (17 September 2006).

16
Agreement for Mutual Enforcement of Debarment Decisions (9 April 2010).

17
Id.

18
"What needs to be removed is money that corrupts, that buys, that kills, that ruins, that rots up to the conscience of man."

19
See http://issuu.com/transparencyinternational/docs/cpi2013_brochure_single_ pages?e=2496456/5813913.

20
See http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK: 23272490~pagePK:51123644~piPK:329829~theSitePK:29708,00.html.

21
For example, the World Bank defines corruption as "the offering, receiving, or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party." Guidelines, Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers, para. 1.23(a)(i) (Jan. 2011).

22
A Resource Guide to the US Foreign Corrupt Practices Act, 22-23 (Nov. 2012); see also the following resources that list similar or additional red flags: (i) World Compliance's Navigating Through the FCPA Minefield, Debunking Myths, and Addressing Red Flags; (ii) the Woolf Committee's Report on BAE Systems; (iii) TRACE International's Due Diligence Guidebook; and (iv) ICC Guidelines on Agents, Intermediaries and Other Third Parties.

23
This was recognized by the tribunal in EDF (Services) Limited v Romania, ICSID Case No. ARB/05/13, Award, para. 221 (8 October 2009) (the tribunal noted that "corruption must be proven and is notoriously difficult to prove since, typically, there is little or no physical evidence.").

24
Collusion can be defined as "an arrangement between two or more parties designed to achieve an improper purpose including to influence improperly the actions of another party." Guidelines, Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers, para. 1.23(a)(iii) (Jan. 2011).

25
Fraud can be defined as "any act or omission, including misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain financial or other benefit or to avoid an obligation." Guidelines, Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers, para. 1.23(a)(ii) (Jan. 2011).

26
Coercion can be defined as "impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party." Guidelines, Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers, para. 1.23(a)(iv) (Jan. 2011).

27
Khvalei, Vladimir, "Using Red Flags to Prevent Arbitration from Becoming a Safe Harbour for Contracts that Disguise Corruption," 24 ICC International Court of Arbitration Bulletin, Special Supplement, at 16 (2013).

28
For ease of reference, I will use the term "corruption" to include other forms of misconduct.

29
See Born, Gary, "Bribery and an Arbitrator's Task", Kluwer Arbitration Blog (11 October 2011), at http://kluwerarbitrationblog.com/blog/2011/10/11/ bribery-and-an-arbitrator%E2%80%99s-task/.

30
Id.

31
ICC Case No. 1110, Award (1963), XXI Y.B. Comm. Arb. 47 (1996).

32
Id., at 51.

33
Id.

34
Id., at 52.

35
Decision of the Tribunal Fédéral, 2 September 1993, National Power Corporation (Philippines) v Westinghouse (USA), 12 ASA Bull. 244 (1994), ATF 119 II 380.

36
Westacre Investments Inc. v Jugoimport-SPDR Holding Co. Ltd. and Beogradska Banka (hereinafter "Westacre"), ICC Case No. 7047, Award (1994), XXI Y.B. Comm. Arb. 79 (1996).

37
Westacre Investments Inc. v Jugoimport-SPDR Holding Co. Ltd. and Others, Judgment of 19 December 1997, 4 All ER 570, 594-95 (1998).

38
See, e.g., Westinghouse Int'l Projects Co., Westinghouse Elec. S.A. and Barns & Roe Enterprises, Inc. v Nat'l Power Corp. and The Republic of the Philippines, ICC Case No. 6401, Preliminary Award (19 December 1991) (as cited by Mohamed Abdel Raouf, "How Should International Arbitrators Tackle Corruption Issues?," 24 ICSID Review - Foreign Investment Law Journal 116, 120 (2009)).

39
See, e.g., ICC Case No. 4145, First Interim Award (1984), Journal du droit international 1985.985, reprinted in XII Y.B. Comm. Arb. 97 (1987).

40
ICC Case No. 14920, Final Award (2009) (in Spanish), 24 ICC International Court of Arbitration Bulletin, Special Supplement at 94, 95 (2013) (author's own translation). The case is referred to in Albanesi, Christian & Jolivet, Emmanuel, "Dealing with Corruption in Arbitration: A Review of ICC Experience," 24 ICC International Court of Arbitration Bulletin, Special Supplement at 27, 35 (2013).

41
UNCITRAL Model Law, Art. 34(2)(a)(iii); New York Convention of 1958, Art. V(1)(c)

42
UNCITRAL Model Law, Art. 34(2)(b)(ii); New York Convention of 1958, Art. V(2) (b).

43
See Albanesi & Jolivet, supra note 40, at 35.

44
See Hwang, Michael & Lim, Kevin, "Corruption in Arbitration - Law and Reality" (expanded version of Herbert Smith-SMU Asian Arbitration Lecture, 4 August 2011, Singapore) (Oct. 2012), para. 18.

45
Id. para. 24.

46
See Khvalei, supra note 27, at 19. To the question asked by Mohamed Abdel Raouf (supra note 38, at 118) as to whether international arbitrators should consider themselves servants of the parties or of justice, the answer would be of both.

47
ICC Case No. 6497, Final Award (1994), XXIVa Y.B. Comm. Arb. 71 (1999).

48
Id., at 73.

49
Westacre, supra note 36.

50
Id., at 93.

51
The award is unpublished and referred to in Khvalei, supra note 27, at 18.

52
Metal-Tech Ltd. v Republic of Uzbekistan, ICSID Case No. ARB/10/3 (4 October 2013).

53
Lamm, Carolyn B., Greenwald, Brody K., & Young, Kristen M., "From Duty Free to Metal-Tech: A Review of International Investment Treaty Arbitration Cases Involving Allegations of Corruption," 29 ICSID Review-Foreign Investment Law Journal 328, 341 (2014).

54
See Cremades, Bernardo M. & Cairns, David J.A., "Transnational Public Policy in International Arbitral Decision-Making: The Cases of Bribery, Money Laundering and Fraud" in K. Karsten & A. Berkeley, eds., Arbitration - Money Laundering, Corruption and Fraud, Dossier of the ICC Institute of World Business Law (Paris: ICC Publishing, 2003) 65, 83.

55
Hwang & Kim, supra note 44, para. 25. See also Kreindler, Richard, Competence- Competence in the Face of Illegality in Contracts and Arbitration Agreements, Hague Academy of International Law, 2013, p. 350.

56
For a thorough discussion of the issue of the burden of proof, see Hwang & Kim, supra note 44, paras. 27-47.

57
Id.

58
EDF (Services) Limited v Romania, ICSID Award, supra note 23, para. 221. It has been proposed to adapt the standards of proof in corruption cases to the challenges that these cases raise. (According to Partasides, Constantine, "Proving Corruption in International Arbitration: A Balanced Standard for the Real World," 25 ICSID Review - Foreign Investment Law Journal 47, 60 (2010), "plausible evidence of corruption, offered by the party alleging illegality, should require an adequate evidentiary showing by the party denying the allegation.").

59
International Law Association, The Hague Conference (2010), International Commercial Arbitration, Confidentiality in International Commercial Arbitration (hereinafter referred to as "ILA, Confidentiality in International Commercial Arbitration").

60
Id. at 4.

61
Id.

62
Id. at 5-8, 19.

63
Id. at 8-10.

64
Id. at 10-11.

65
Id. at 11.

66
Id. at 12.

67
Id. at 17.

68
Id. at 12.

69
Id. at 20. Other reasonable exceptions include "responding to a compulsory order or request for information of a governmental or regulatory body" and "making a disclosure required […] by the rules of a securities exchange." Id.

70
In addition, Article 30.1 of the LCIA Arbitration Rules of 2014 provides: "The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority." (Emphasis added.) It was submitted that while this wording admittedly speaks of a party and not of an arbitrator, it equally allows for an exception to confidentiality on the part of the arbitrator. (See Kreindler, supra note 55, at 331.)

71
ILA, Confidentiality in International Commercial Arbitration, supra note 59, at 20.

72
See, e.g., Compania de Aguas del Aconquija S.A. and Vivendi Universal v Argentine Republic, ICSID Case No. ARB/97/3, Decision on Annulment (3 July 2002), para. 86: "It is settled, and neither party disputes, that an ICSID tribunal commits an excess of powers not only if it exercises a jurisdiction which it does not have under the relevant agreement or treaty and the ICSID Convention, read together, but also if it fails to exercise a jurisdiction which it possesses under those instruments."

73
ICSID Arbitration Rule 32(2).

74
ICSID Arbitration Rule 37(2). This provision was clearly inspired by the Statement of the NAFTA Free Trade Commission on non-disputing party participation of 7 October 2003.