This note addresses situations in which corruption on the part of one of the arbitrators gives rise to a claim for annulment of the award that finally results from the proceedings, focusing principally on the ICSID Convention.
Allegations of corruption of an arbitrator shall be distinguished from allegations of corruption surrounding the arbitration itself, i.e., whether the underlying investment was underdone illegally or procured in acts that involve corruption, which generally are assessed during the arbitration itself.
II. Under the ICSID Convention
The text of article 52(1)(c) of the ICSID Convention was included in the initial draft of the text1 and was adopted without modifications.2 During negotiations, some delegates considered that the grounds for annulment should also include bias or misconduct from an arbitrator, but these items were not included in the final text.3 There was also debate as to the applicable standard of proof for corruption and whether it should be premised on a judicial decision.4
Requests for annulment based on allegations of corruption of one of the arbitrators are subject to a specific timeframe for submission. Article 52(2) of the ICSID Convention provides that requests for annulment based on this ground can be submitted within 120 days after the discovery of corruption and in any case no later than 3 years after the award was rendered. This rule seeks to provide the Party against whom corruption operates the opportunity to know of acts that may usually be kept in secret.5 Accordingly, as per Rule 50(3)(b)(ii) of the ICSID Convention Arbitration Rules, the Secretary-General shall refuse to register an application if it is not made within said timeframe.
D. Standard of corruption
The consequences of corruption by one of the arbitrators should generally be the annulment of the entire award, yet this will depend on the specific circumstances of each case.9 At the time of writing date, this ground for annulment had not been raised in requests for annulment under the ICSID Convention and thus, had not been addressed in annulment decisions.10
III. In other investor-State disputes
Unlike the ICSID Convention, the contrary to public policy.11does not include corruption of the members of the arbitral tribunal as a specific ground for denying the recognition and enforcement of foreign arbitral awards. Similarly, the does not include corruption of the members of the arbitral tribunal as a specific ground for annulment. Allegations of corruption from arbitrators could eventually be raised invoking other grounds for annulment, such as the fact that it is
Bishop, R.D. and Marchili, S.M., Annulment under the ICSID Convention, Oxford University Press, 2012.
Parra, A.R., The History of ICSID, 2nd ed., Oxford University Press.
Schreuer, C.H., Malintoppi, L., Reinisch, A. and Sinclair, A., The ICSID Convention: A Commentary, Cambridge University Press, 2nd ed., 2009
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