The annual meeting of the Institute has always been a major event in the very full calendar of seminars on international arbitration, certainly in my own diary as well as that of Professor Pierre Lalive, the founder of the Institute, who passed away in March this year. I admit that I should have liked to exchange ideas with him in preparing the programme, and I know he would have liked to have shared his thoughts during the discussions. He did not, to use his own expression, like "conferences that break down open doors," and he also used to say that the proliferation of arbitration seminars had triggered an obsessive search for "new" topics, which rarely turned out to be new at all, at the expense of a more in-depth study of recurring issues.

Addressing issues of corruption in international arbitration is not a "new topic" 1. as such, but it is certainly a complex one, and it has never been more relevant. As Richard Kreindler, whose expertise in the field is well known, pointed out during our initial discussions, corruption is not a recent phenomenon, either generally or in arbitration, but questions about its implications for arbitration have become significantly more frequent and more complex in recent years, both in commercial and investment arbitration. This is so even though there seems to be a convergence in law-making at the international level aimed at combating corruption and other unlawful acts.

The subject of the annual meeting was corruption, including extortion, which can probably be treated in a similar way. We did not deal with other unlawful acts, such as fraud or money-laundering, which were already the subject of the Institute's seminar in 2002, 2. and which do not necessarily raise the same issues, in particular since corruption has a bilateral aspect, in other words it involves two parties.

So, what definition might we adopt for "corruption"? The term is so commonly used that we all think we know what it means, but there does not seem to be any universally recognized and accepted definition at the international level. The legal writings and international conventions such as the United Nations Convention Against Corruption of 2004 (UNCAC) or the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 1997, offer various definitions, some of them limited to practices involving public officials, and others including acts in the private sector.

One fairly broad definition is the one to be found in the ICC Rules on Combating Corruption of 2011, 3. Article 1: "prohibited practices," defined as the practices of "Enterprises" in their relations with public officials, political parties, party officials or candidates to political office, as well as, in the private sector, the directors, officers or employees of an Enterprise. Bribery, first of all, is defined as "the offering, promising, giving, authorizing or accepting of any undue pecuniary or other advantage to, by or for any of the persons listed above … in order to obtain or retain a business or other improper advantage …". Extortion or solicitation is defined as "the demanding of a bribe, whether or not coupled with a threat if the demand is refused," which can thus be the source of the corruption. Article 1 also contains examples: "Bribery often includes (i) kicking back a portion of a contract payment … or (ii) using intermediaries … to channel payments …". That definition, or rather those definitions, are detailed, but still ultimately somewhat vague.

One major difficulty derives from the fact that those same practices are not unlawful or contrary to public policy, under the applicable law or "codes of conduct" or local customs and usage. There are several examples to illustrate this issue which itself goes a long way to explaining the lack of a uniform approach to these questions in international arbitration. Three examples can be cited.

The first relates to facilitation payments, made to accelerate the carrying out of routine or necessary acts to which the person making the facilitation payment is legally entitled. They are illegal in most countries, but not all (the United States, for instance) if the circumstances (such as duress, emergency, or threat to personal safety) justify them.

A second, and more problematic, example is that of gifts. Depending on the circumstances, their size, frequency and timing, they might be considered as part of a common, lawful practice in the country where they are made, but not necessarily by third parties, including arbitrators. Article 5 of the ICC Rules attempts to provide an exhaustive list of the criteria to be taken into account when determining at what point the offer of a gift becomes an unlawful practice, but applying them is problematic for businesses and will be for arbitrators too.

Last come contracts with intermediaries or with consultants or business partners that provide for assistance (often very vague) in securing public or private contracts. Depending on the applicable law, such contracts may be lawful or unlawful, even in the absence of any offer or acceptance of an undue pecuniary advantage to or by public officials.

We are not on easy ground, therefore. What must an arbitrator do when the agreement or the acts in question seem to be unlawful, not under the law applicable to the substance as chosen by the parties, or the public policy of the seat of arbitration, but under the laws of the country where the agreement or acts were performed, or the law with which the dispute between the parties has a direct connection? Is it of any significance that the parties wished precisely to avoid the application of that law? Does it alter the burden of proof or the standard of proof? What about the law of the country where the award might be enforced? These are all questions that have been answered in very different ways in the legal writings and arbitral awards

Even where there is no doubt that the acts in question are unlawful, either under the law applicable to the substance or, whatever the applicable law, on grounds of international public policy, in other words the public policy common to all countries, complex issues still arise at every stage of the arbitral proceedings.

The seminar dealt with these issues by addressing both theoretical and practical considerations, and by examining the respective viewpoints of the parties, counsel and arbitrators, as well as aspects that may be specific to commercial arbitration on the one hand, and investment arbitration on the other.

The first panel, Yas Banifatemi, Aloysius Llamzon and Hiroyuki Tezuka, chaired by Antonio Crivellero, a member of the Council of the Institute with great knowledge of the subject, analyzed the impact of corruption on the preliminary questions of arbitrability, competence and admissibility, as well as on procedural aspects.

Then, Andrea Menaker, Vladimir Khvalei and Sébastien Besson, under the chairmanship of Professor Hi-Taek Shin of the National University of Seoul, set out the latest theories and approaches to the burden and standard of proof in allegations of corruption.

The third panel, composed of Thomas Sprange, Nassib Ziadé and Edoardo Marcenaro, examined the rights and duties of arbitrators to investigate or report acts of corruption. Richard Kreindler chaired this panel.

Our final panel, Sophie Nappert, Matthew Gearing Q.C. and Juan Fernández- Armesto, chaired by Carita Wallgren-Lindholm, a member of the ICC International Court of Arbitration, dealt with the consequences and effects of allegations or findings of acts of corruption both on the dispute and the decision on the merits, and on the enforceability of the arbitral award.

Lastly, Richard Kreindler had the daunting task of drawing conclusions about the dysfunctionalities or elements that could be or at least deserve to be put right, and about prospects for the future.

Domitille Baizeau

1
See e.g. Tackling Corruption in Arbitration, International Court of Arbitration Bulletin Supplement 2014 Edition; ICC Experience of Corruption in Arbitration, Arbitral Awards on Corruption, Recent Anti-Corruption Initiatives and Arbitration, E-Chapters from ICC International Court of Arbitration Bulletin Supplement 24, 2014 Edition.

2
Arbitration - Money laundering, corruption and fraud, 25 November 2002, 22nd Annual Meeting of the ICC Institute of World Business Law & Dossier I of the ICC Institute of World Business Law, 2003 Edition.

3
First drafted in 1977 by the ICC Commission on Corporate Responsibility and Anti-corruption (reissued in 2011).