Respondent, a European company, entered into a consultancy agreement with a company established in the Middle East for the purpose of recovering money due as payment for a construction project undertaken by Respondent for a West Asian state (X). For its services, the consultant (Claimant) was to be paid a fee of 14% of any amounts recovered. The principal (Respondent) terminated the consultancy agreement prior to its term, causing the consultant to initiate arbitration proceedings to obtain the fees to which it claimed it was entitled. Respondent argued that the consultancy agreement was void because it involved the corruption of public officials in the government of State X. The arbitral tribunal found that the facts asserted by Respondent (Claimant's location, level of remuneration, ill-defined purpose of agreement, shortage of written evidence, no indication of bank account for payments, consultant's lack of experience) offered no conclusive evidence of corruption and had been raised in bad faith.

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La défenderesse, une société européenne, avait conclu un contrat de conseil avec une société établie au Moyen-Orient dans le but de recouvrer des sommes qui lui étaient dues en paiement d'un projet de construction qu'elle avait entrepris pour un État d'Afrique occidentale (X). Pour ses services, le consultant (la demanderesse) devait percevoir une commission de 14 % sur toutes les sommes recouvrées. Le donneur d'ordre (la défenderesse) a résilié le contrat de conseil avant terme, ce qui a conduit le consultant à engager une procédure d'arbitrage afin d'obtenir le paiement des commissions auxquelles il estimait avoir droit. La défenderesse arguait que le contrat de conseil était nul parce qu'il impliquait la corruption d'agents publics du gouvernement de l'État X. Le tribunal arbitral a conclu que les faits allégués par la défenderesse (lieu d'établissement de la demanderesse, niveau de rémunération, objet mal défini du contrat, défaut de preuves documentaires, absence d'indication d'un compte bancaire pour les paiements, manque d'expérience du consultant) n'étaient pas suffisants pour prouver la corruption et avaient été invoqués de mauvaise foi.

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El demandado, una empresa europea, celebró un acuerdo de consultoría con una empresa establecida en el Oriente Medio con el propósito de recuperar el dinero adeudado por el pago de un proyecto de construcción emprendido por el demandado para un Estado del Asia occidental (X). Estaba previsto que el consultor (demandante) recibiera por sus servicios una remuneración del 14% de todas las sumas recuperadas. El empresario (demandado) rescindió el acuerdo de consultoría antes del vencimiento del período de validez, lo que llevó al consultor a iniciar un procedimiento de arbitraje para obtener los honorarios que, según alegaba, se le adeudaban. El demandado alegó que el acuerdo de consultoría era nulo porque implicaba la corrupción de funcionarios públicos del gobierno del Estado X. El tribunal arbitral estimó que los hechos alegados por el demandado (ubicación del demandante, nivel de remuneración, mala definición del propósito del acuerdo, carencia de pruebas escritas, falta de indicación de la cuenta bancaria para los pagos, inexperiencia del consultor) no representaban pruebas concluyentes de corrupción y que se habían planteado de mala fe.

'62. According to Respondent, the Consultancy Agreement was null and void ab initio, because it aimed at corrupting or at least influencing officials in [State X] in order to obtain, on behalf of [Respondent], payment of an outstanding debt, in violation of rules of international and/or national ([State X]) public policy …

63. In order to determine that issue, the Sole Arbitrator must, from the inception of his reasoning, ascertain the law applicable to the Agreement and, as the case may be, confront it with rules of any other national or international public policy which may interfere with it. Thereafter, he shall examine the evidence brought by the Parties as to whether in the event any such rule as previously determined has been infringed by the Parties so that their contract must be declared null and void, it being understood that the burden of proof lies on the shoulders of that Party who has raised the argument of nullity, that is to say Respondent in the present case.

64. First, the Sole Arbitrator holds that the Agreement is governed by French law. … the Parties have agreed, in their arbitration clause, that "Arbitration shall employ the English language and be governed and interpreted with the laws of France."

It could be argued that this sentence would concern only "Arbitration", that is to say the arbitral proceedings which the Parties have agreed to situate in Paris, France.

Nevertheless, the Sole Arbitrator is persuaded that, when signatories of the Agreement, none of whom being skilled in legal matters, chose such rather clumsy wording, they in reality intended to have the whole of their contractual relationship governed by French law. For one thing, the choice of France as the place of arbitration was a strong indication of their decision to enjoy not only a neutral forum for settling their disputes, but also a neutral law to be applied in every other respect. What otherwise would have they meant when they said "Arbitration shall … be … interpreted with the laws of France"? Indeed, interpreting arbitration would be nonsensical in itself in this context and could not mean anything but that the entire agreement should be "governed and interpreted with the laws of France".

For another thing, Claimant all along with its submissions has argued on the basis of French law, relying from time to time on French cases and citing several academic opinions by French legal authors. At no moment did Respondent object against those precise references which all turned around the basic rules which according to Claimant legally support its claims. Even if Respondent, when he has alleged that the Agreement was contrary to certain [State X] statutory regulations against corruption, or, alternatively, certain rules of international public policy on the same subject, that does not mean that French law was not the one chosen by the contracting Parties. It only means that there might be reasons of [State X] (or, alternatively, international) public policy rules pertaining to setting aside French law to the extent of such contrariety, if any. As will be seen hereafter, there is however no reason for such setting aside in the present case.

65. Secondly, there is no doubt that corruption is worldwide considered a wrongful and, indeed, unacceptable practice which is condemned by various international conventions, instruments of international organizations such as UN, UNCITRAL, OECD, European Union etc. not to mention national legislations. There is no need to make specific references to these sources. Condemnation of such practice may in effect be seen as a material rule of international public policy, indeed a rule of "transnational or truly international public policy" (to use an expression today common in the international legal community), which must apply irrespective of whichever national law parties to a contract may have chosen to govern it.

66. More specifically, and this will be of utmost help for the determination of the issue in the present case, French law has implemented rules against corruption at the international level by incorporating the relevant prescriptions of the OECD Paris Convention of 17 December 1997 in the French Code pénal. That Convention has entered into force on 29 September 2000. Article 435-3 of the Code pénal reads as follows (free translation):

For the implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on 17 December 1997, shall be punished by ten years of imprisonment and by a fine of 150.000 euros, the one who unlawfully proposes, at any moment, directly or indirectly, any offer, promise, gift, present or advantage whatsoever with the view to obtain that a person having public authority, or in charge of a mission of public service, or vested by election with a public mandate in a foreign state or within an international public organization, makes or refrains from making an act of his function, mission or mandate or facilitated by his function, mission or mandate, in order to be granted or maintained a contract or another undue advantage in international trade.

67. It stems from these provisions, which are now part of French criminal law that, should the Agreement have aimed at the above wrongful actions, it certainly would not escape the sanction of nullity, not to mention the personal sanctions applicable to its signatories or their accomplices. However, by their nature, such provisions require for their application very careful attention to the facts in accordance with a principle which commands their restrictive interpretation. Their alleged infringement must be ascertained according to a high standard of proof. No mere presumption would suffice to entail liability of the accused party.

68. In this regard, the Sole Arbitrator has to determine, on the basis of the subject matter of the Agreement, its aims, its wording and the true intention of the parties, whether it pertains to procure to one party by the other some direct or indirect "offer, promise, gift, present or advantage" and whether that other party is a person having public authority in one of the legally defined capacities to award a contract or another kind of advantage in international trade.

That being so, it immediately appears that, on the face of it, the Agreement is not a contract falling under the above stated legal definition, at least because [Claimant], to which [Respondent] has accepted to pay a remuneration for the services defined in the agreement, is not a person vested with any kind of the required authority, having no competence at all either to award or to refrain from awarding the advantage at issue, i.e. the payment of the relevant outstanding debt owed to [Respondent] by the [State X] Ministry … Therefore, [Respondent] cannot be held to have infringed the above rule of public policy, nor [Claimant] to have been [Respondent]'s accomplice for having accepted the remuneration and implemented its obligations under the agreement.

69. The question remains, however, whether the Agreement was not, as submitted by Respondent, at least destined to indirectly procure, through Claimant's acts, undue advantages to certain [State X] officials who, in their respective public missions, could have illegally favoured [Respondent] with undue advantages.

The Respondent's main argument in this respect is that the percentage (14%) of the remuneration promised to [Claimant] was of such a magnitude that it permitted hidden payments to those in the [State X] administration who would have to take the relevant decisions in favour of [Respondent]. Moreover, Respondent relies on the provisions of [a State X statute], which states, according to the free translation proposed by Respondent and not challenged by Claimant, that:

Any one, who takes or requests payment, which falls out of the obligations or who accepts a promise for such payment in his favour or for the benefit of someone else and that with the aim of providing to others or trying to provide to others post, work, undertaking, project, deal, profit or any other benefit from the state or with the aim to influence, by whatsoever way, on the government through the actions of any of the government officials shall be punished to hard compulsory labour for a period not less of five years.

70. Once again, French law is applicable to the Consultancy Agreement, not [State X] law. Nevertheless, the Sole Arbitrator is permitted to take the latter into consideration in his appreciation of the facts of the case. Furthermore, the above provision, not only are compatible with the rules of French law, but also provide complementary base for the interpretation and application of the latter to facts which, for the proper implementation of the Agreement, were to take place in [State X].

71. To begin with the analysis of the facts under the aspect of this [State X] statutory law, one must first consider that the practice concerned with the above text amounts to criminal offence as is the text of Article 453.4 of the French Code pénal. Therefore its application similarly calls for restrictive interpretation and application, so that the alleged infringement must be ascertained by a high standard of proof.

72. Clearly, on the face of the above [State X] Law, the prohibition as defined is that of requesting a payment (or accepting a promise therefor) "which falls out of the obligations", meaning that such payment would be without proper cause, if not that of procuring an illegitimate advantage to the beneficiary through the action of government officials. By contrast, it is not prohibited to procure substantial services to the beneficiary enabling the latter to obtain such advantage he may have the right to seek and obtain.

Moreover, [the State X statute] requires for its application the proof of the malicious intention of the party requesting payment and/or of the party promising such payment, that is the proof that their intention was undoubtedly to corrupt or at least influence government officials to obtain undue advantages for the beneficiary.

73. A thorough review of the characteristics of the Agreement, including but not limited to the rate of the stipulated remuneration, and of the facts of the case relevant to its conclusion and performance concurs to decide that Respondent's submission of its nullity for contrariety to rules of public policy is ill-founded and must be rejected.

74. First, the Agreement is not in itself one forbidden by French law, nor [State X] law. No one of them prohibits a person to procure another with services of the kind stipulated in it, which are a combination of counsel and intermediation.

Having to "use their best endeavours to help the principal collect the amounts due", [Claimant] had under such general terms first to advise [Respondent] as to the best ways of preparing and submitting its claims, to determine the best opportunities, to identify from time to time, in every relevant public administration, the right man, or the right commission, in the right place, for the presentation of such claims. Secondly, [Claimant], through [its] general manager, who enjoyed the necessary introductions, had to assist [Respondent] for the defence of the interests at stake, before the competent civil servants, having to accompany [Respondent]'s representative … at meetings or even to represent them, either physically at meetings in [State X] or by phone or correspondence from [its home country].

The Sole Arbitrator has been shown ample written evidence of that, which oral evidence has confirmed to his satisfaction.

75. Respondent, on the contrary, has not succeeded to convincingly establish the necessary counter evidence. It has indeed not brought the mere proof, either of the Parties' intention to corrupt anyone in [State X], or of any active or even tentative action of corruption by Claimant.

76. It is true that [an executive director of Respondent] declared in his affidavit that he had been told by [Claimant's assistant general manager] that "collecting the debt … is possible only against payment of a percentage of the due amounts to the officers of the state the debt settlement is dependent on". That declaration, however, must firstly be weighed against [the said assistant general manager's] strong denial. Secondly, Respondent has refrained from asking [Respondent's executive director] to appear for examination at the Hearing, so that Claimant and the Sole Arbitrator were not enabled to check the point in a fair and complete contradictory process. Thirdly, it is noticeable that in the rest of his Affidavit, [Respondent's executive director] has manifestly certified facts, concerning the alleged lack of [Respondent's representative]'s authority to sign the Agreement, which were absolutely contrary to obvious written evidence … so that the entirety of his affidavit may be put into doubt.

77. Moreover, it is rather surprising that Respondent never raised the present argument of nullity during the performance of the agreement, or as an argument for its termination, or as a defence in its Answer to the Claimant's Request for Arbitration or in the presentation of its arguments in the Terms of Reference. It, in fact, waited until its memorial … before mentioning the point, however in a single sentence deprived of any supporting evidence. Nor did Respondent file … any complaint in the competent [State X] criminal court for prosecution of [Claimant's assistant general manager] or peoples acting on the latter's behalf in view of their indictment for corruption.

These longstanding omissions give the impression that the argument has been fabricated by Respondent in a last minute, and maybe desperate, way of defence rather than in entirely good faith.

78. Be it as it may, a careful review of each fact alleged by Respondent as evidence of corruption results in the conclusion that, not only would they amount to mere presumptions, incapable even in conjunction with each other to have the weight of true evidence, but also they look flawed.

79. The circumstance that [Claimant] is an off-shore company according to [the laws of the country where it was established] proves nothing in itself but that that company is placed in that country under a legal status corresponding to its activities abroad.

80. The amount of the remuneration (14% of the sums to be recovered, once received by [Respondent] from the [State X] debtor) although apparently of a relatively high level (and this will be dealt with later), is not an unavoidable indication that any part of it was destined to [State X] officials. Besides, Claimant has established that it had himself to pay legal consultants or assistants in [State X] … for the services they would, procure, and indeed have procured for it.

81. No more is a convincing argument the allegation by Respondent that the "cause" of the Agreement was vague. Indeed, it was not. As seen at the above para.74, it consisted in a combination of counsel and agency entailing an obligation of "best endeavours" with the view to collect payment of an outstanding debt. That task was not so easy to conduct since [Respondent] for many years missed the chance to get paid by its own means, notwithstanding its long standing presence and the significant development of its industrial activities in the country.

82. One has not to be impressed by the circumstance, also alleged by Respondent, that Claimant has rather remained short of written evidence of its correspondence with its counterparts in the [State X] administration, as well as of written reports or other kinds of memos of its action. Not surprisingly, contacts and meetings may have been made, intensively or not, orally, as [Claimant's assistant general manager] has witnessed. The reality of his steps, phone conversations, travel [to State X], with or without the presence of [Respondent]'s representative, has been proved to the Sole Arbitrator's satisfaction. In particular, the tentative objection made by [Respondent's representative] against the veracity of [Claimant's assistant general manager's] statement relating to one of the latter's travels to [State X], has later proved flawed by the production with Claimant's Post-Hearing Brief of further admissible and reliable written evidence.

83. Nothing abnormal, in the Sole Arbitrator's opinion, can furthermore be found in the fact that the Agreement did not design [sic] the exact bank account in which, once the debt was recovered from the [State X] authorities, the percentage accrued to [Claimant] should be lodged. According to the agreement, that payment should be made "into accounts nominated by the Consultants". There was no legal obligation to nominate it in advance.

84. Lastly, Respondent cannot usefully prevail itself of an alleged "no specific knowledge and experience [of the Consultant] with regard to the scope of activity and the business of the Principal".

Indeed, that circumstance even if proven is not relevant. It sufficed that [Claimant], thanks to its manager's personality, status and experience of the [State X] administrative complexities acquired along with his past career, and relying himself on the services of his assistants and consultants within or outside the company, was capable of opening the way towards the [State X] relevant authorities and entertaining with them such positive dialogue that the situation required. Of that, the Sole Arbitrator has been satisfactorily informed.

85. To conclude with that matter of nullity, and on the basis of the foregoing, the Sole Arbitrator shall dismiss Respondent from its late, flawed and not raised in good faith objection.'