'A. Evaluating the evidence

151. While this case raises several important questions of law, the nature of Respondents' main defence requires the Tribunal to consider competing versions of the facts. . . .

152. Moreover, in respect of Respondents' new defences linked to corruption, the Tribunal notes that there is no direct evidence, written or oral, of a corrupt payment having been made by anyone to anyone in connection with the negotiation or signature of the [Agreement]. Respondents ask the Tribunal to infer from a constellation of facts that the [Agreement] was part of a single unenforceable corrupt arrangement. Claimant's principal witness . . . strenuously denies that he or Claimant participated in any corruption.

153. Evaluating the contradictory evidence, and determining the consequences of the Tribunal's assessment of the evidence, require that the Tribunal first reaffirm the principles governing burden and standard of proof (Section 1), and consider, in a general way, the credibility of each side's witnesses (Section 2).

1. Burden and standard of proof

154. It is well established that, as a matter of principle, the party asserting a fact or proposition bears the burden of proving it.

155. As a consequence, in this case, while Claimant has the burden of establishing the existence of the [Agreement] (which it did at the jurisdictional phase) and the breach of its terms by Respondents, it is Respondents that carry the burden of proof for the various defences that they have pleaded. Respondents acknowledged that they bear that burden.

156. What difference is there, if any, in the standard of proof that Respondents must discharge in a civil case such as the present one in order to meet their burden, as compared to the usual civil standard of the balance of probability? Specifically, does the fact that Respondents allege bribery and corruption raise or lower the standard of proof from the usual civil standard?

157. It is generally recognized that, in cases of alleged corruption, it is rare that the adjudicator will find direct and explicit evidence of corrupt payments. By their very nature, such payments and the circumstances under which they are made are always carefully concealed or disguised as part of a seemingly legitimate transaction.

158. As a result, reliance can and must be placed by the adjudicator on indirect or circumstantial evidence, on surrounding events, and on inferences. Indeed, it has been suggested that, in such circumstances, the standard of proof may be weakened, being based on presumptions arising from other extrinsic indications. The Tribunal notes that there is also support in international arbitral jurisprudence for the view that a higher standard of proof is required where bribery or corruption is alleged.1 Similarly, the courts of some nations have taken the view that where particularly serious allegations are involved (such as fraud or corruption) the evidence must be stronger or of greater weight than would otherwise be the case in order to meet the balance-of-probability test.

159. The question may be asked whether the foregoing are matters of substantive law or procedural law. In the current case, in the view of the Tribunal, this is of little importance. By the terms of the [Agreement], the applicable substantive law is the law of England. No suggestion has been made that the law of the [respondent state], were it applicable, is any different from the law of England. The place of the arbitration being London, the procedural law, if applicable, is also the law of England. The Tribunal therefore turns for guidance on this question to English law.

160. The general rule, under English law, is that in case of alleged corruption, as in other commercial disputes, the evidence must be such as to show that the asserted facts are more likely than not to exist, applying the balance-of-probability test. Thus, even though the act of corruption may or may not be a criminal offence, the stricter criminal standard requiring evidence of a fact "beyond a reasonable doubt" is not applicable.

161. The seminal English case on the approach to the standard of proof is the House of Lords decision in Re: H. 2 In that case, Lord Nicholls of Birkenhead gave the leading opinion in the following terms:

When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence ... Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation.

162. He added:

… this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established.

163. Therefore, as enunciated in the case of Re: Dellow's Will Trusts3:

the more serious the allegation, the more cogent is the evidence required to overcome the unlikelihood of what is alleged and thus to prove it.

164. Guided by these authorities, the Tribunal is of the view that the standard of proof need not be, and should not be, weakened, nor that it need be or should be strengthened. The same standard of proof, namely one based upon the balance of probability, should be applied. That standard does not require "certainty", or even "likelihood beyond a reasonable doubt". Nor does it require conclusive, direct evidence. It requires evidence, to be sure, but such evidence may be indirect or circumstantial, to the extent it is sufficient, in the context of the surrounding circumstances, to tip the balance of probability.

165. Bearing in mind in particular the English decisions referred to above, the Tribunal will carefully weigh the evidence, sorting fact from speculation, and ensuring that enough facts exist to support any ensuing inferences. In the end this will, at least to some degree, be a subjective evaluation informed in part by the Tribunal's assessment of the credibility of the witnesses.'

1
See ICC Case No. 5622; ICC Case No. 6401; see also A. Timothy Martin, “International Arbitration and Corruption: An Evolving Standard”, Transnational Dispute Management, vol. 1 (May 2004) published at http://www.transnational-dispute-management.com/samples/freearticles/tv1-2-article45a.htm.

2
[1996] AC 563 (F6 Tab 29).

3
[1964] WLR 451 at page 445 (F6 Tab 30).