IS THERE A DUTY OF THE INTERNATIONAL ARBITRATORS TO

REPORT CORRUPTION AND CRIMES?

Felix Asencio.
1. - Introduction
As consequence of the growing importance of Arbitration as a
Dispute Resolution alternative it becomes more important to consider
the area of risk that is arising as consequence of the convergence of
Arbitration Law and Criminal Law in many aspects. It is obvious that
totally different perspectives and interests drive both areas of law, but
it is important to consider what are the options to manage such conflict
of interest when it is not possible to avoid them. Arbitrators need to
have the knowledge on how to rule when they face these kinds of
situations.
But still it is important to understand why it seems to be
discovered recently that arbitration might be connected, at some point,
with Criminal Law. There are a few reasons that can explain such
phenomenon. In the very first place, it is to be expected that the
service providers (arbitration practitioners) start paying attention to
the sort of customers they attract and start thinking about the best
ways in which (not) to deal with some of them. Corruption is a fact of
life (and in some countries a common one), so one has to prepare for
the cases that might end up before him or her. 12 It is also relevant to
consider that the perception and awareness of the world has
dramatically changed in the last few decades. Consequently the
business and legal community has become increasingly sensitive
towards corruptive practices. This is not only reflected in the intensified
legislative action aimed at combating corruption and other fraudulent
acts and practices, but also in the rise of the so-called "anti-corruption
industry"3. So now it is possible to find many international bodies
concerned on the prevention of corruption 4, notwithstanding the fact
1 PAVI, Vladimir. Bribery And International Commercial Arbitration
The Role Of Mandatory Rules And Public Policy. Victoria University
Wellington Law Review. 2012. Vol. 43. P. 662.
2 In the same sense BORN, Gary. Bribery and an Arbitrators Task.
Kluwer Arbitration Blog. 2012. Website
http://kluwerarbitrationblog.com/blog/2011/10/11/bribery-and-anarbitrators-task/
3 PAVIC. Op. Cit. P. 662
4 Just to name a few international examples, the most important
follow-up groups of the Conventions on Corruption (Conference of the
States Parties to the United Nations Convention against Corruption,
Mechanism for Follow-Up on the Implementation of the Inter-American

that for them still arbitration seems to be a pending task that they
need to address. Finally, one has to admit that certain features of
arbitration can potentially make arbitration attractive () [and among
them], confidentiality of the proceedings is normally sufficient to strip
the adjudicative process of the publicity traditionally associated with
court proceedings. Thus, if the disputed deal was not of a pristine
nature, opting for arbitration might offer additional comfort to the
parties.5
However, beyond all the general statements, is it possible to imagine
situations that involve corruption or a crime within an arbitration
procedure? The answer is yes. So certainly there is a consensus that
the parties are allowed to decide to use arbitration in order to solve
their disputes in the way they consider appropriate. But there is a
situation that is really old and that might call the attention of the
arbitrators. It is well known that in the Roman Law existed several
ways in order to acquire or transfer the ownership of any good 6, but
one of them, which begun to be unusual when Justinian I the Great
became emperor, was the In Iure Cessio. The In Iure Cessio 7 is a
Latin term meaning surrender in law. It is a fictional trial held to
transfer ownership of property. Under this trial, a transferee appears
before a praetor and asserts ownership of the property. The actual
owner will also be present in this trial. Here, the actual owner will not
contest the assertion, and so allows the transfer of property to the
transferee.8 9
The first important question in this regard is if the In Iure Cessio
really finished to be applied during the times of Justinian or there are
some good reasons to consider that it might be reborn now. There are
Convention against Corruption (MESICIC), Working Group on Bribery of
the Organisation for Economic Co-operation and Development), and
many other NGOs like Transparency International, the Extractive
Industries Transparency Initiative, and the Coalition Against
Corruption.
5 PAVIC. Op. Cit. P. 662
6 Among them it is possible to mention: mancipatio, adjudication,
usucapion, praescriptio longi temporis, praescriptio longisimi temporis,
and tradition
7 Also known as In Jure Cessio.
8 Website http://definitions.uslegal.com/i/in-jure-cessio/ (Last seen on
April 29th, 2014).
9 New Pauly Encyclopedia (English edition of the German
Encyclopedia Der Neue Pauly). Website
http://referenceworks.brillonline.com/browse/brill-s-new-pauly (Last
seen April 30th, 2014).

good grounds to consider such possible reborn; for instance, money

laundering can be present in different ways in international arbitration.
One is through the simulation of a commercial dispute between two
related companies but that at first glance doesnt seem to be related.
Company A claimed economic damages against Company B. To
support the claim of damage fictitious documents are presented, given
that both parties are involved in money laundering, there is no
objection from any of the parties as to the authenticity of the
documents. The procedure marches despite suspicions that the
tribunal has on the origin of the resources decides not to do their own
research and issues an arbitration award in favor of one of the
companies. The losing company makes the alleged payment of
damages and is achieved the money laundering.10
Nonetheless, the scheme just described is not the only one that
is possible to conceive, so there are some others like the one in which
the parties during the proceedings come to a simulated settlement
that ends the alleged dispute. In such arrangement the parties ended
the dispute and one party agrees to pay the other a sum of money and
jointly request the court to adopt the arrangement between the parties
as final award. The award will be later used by the parties to justify the
legitimate use of resources, for example, with the tax authorities,
achieving the money laundering11. Those are just a few examples of
many situations that are possible to imagine in which there is a misuse
of the adjudicative power that the arbitrator is entitled to use, but
certainly there are many more examples12.
2. - Cases in which some problems related with corruption
have aroused.
Beyond hypothetical situations what is happening in the
international arbitration? Do we have any notice of real cases in which
some corruption or crime issues have aroused?
It is possible to find an increasing number of cases of
International Arbitration within the last fifty years. They mainly focus
on two issues:
10 GONZLEZ GARCA, Luis Alberto. Corrupcin, lavado de dinero y el
arbitrajeinternacional. In Revista Latinoamericana de Derecho
Comercial Internacional
Vol. 1, Num. 1, Year 2013. Page 263 (Free translation from the Spanish
by the author of this paper).
11 Ibid.
12 Ibid, p. 264

 Is the main contract null and void because it was procured by

corruption?
Is the agency agreement with the agent, who engaged in
corrupt
practices for the principal, enforceable?13
Probably one of the first cases dealing with this kind of issues
was Argentine engineer v. British company:
The claimant had sought to enforce its contractual entitlement
to 10% commission payments for all Argentinean energy
contracts awarded to the respondent. The claimants major
asset was the remarkable degree of influence he had with the
political appointees that awarded the contracts. Here, the
tribunal found that the purpose of the agreement was to
facilitate bribery to the claimant and to his entourage. 14 After
determining that he had to enquire into his jurisdiction ex officio,
despite a different view by the parties, Judge Lagergren held that
neither French Law, as the law of the place of arbitration, nor the
Argentine law, as the law governing the contract, would allow the
dispute to be arbitrated.15 This led Judge Lagergren to deny
jurisdiction, finding the parties had forfeited their right to
justice.16
So probably the case decided by Lagergren
represented a view on the relationship between arbitration and
criminal law in a very different times during the early sixties,
times in which the perspectives were totally different.
Among some of the relevant case to consider is Westacre v.
Jugoimport, mostly because in that case is clearly established that -in
opinion of the tribunals-there are some public policy considerations
more important than establishing the existence of corruption:
Westacre had agreed to assist Jugoimports in relation to orders
to be placed by the Kuwait Ministry of Defence (KMD) for M-84
tanks. In return Westacre was to receive a substantial
percentage of the value of the contracts. The contract was
submitted to Swiss Law and provided for ICC arbitration in
Geneva. [] Westacre started arbitration proceedings for the
13 HAUGENEDER, Florian; and LIEBSCHER. Chapter V: Investment
Arbitration- Corruption and Investment Arbitration: Substantive
Standars and Proof. Christoph. Austrian Arbitration Yearbook 2009,
(C.H. Beck, Stmpfli & Manz)
14 BORN. Op. Cit.
15 LEW, Julian D. M.; MISTELIS, Loukas A.; and KRLL, Stefan M.
Comparative International Commercial Arbitration. 2003. P. 214
16 BORN. Op. Cit.

unpaid monies. The arbitrators awarded Westacre approximately

US$ 50 million plus interest. The arbitration tribunal held
that the consultancy agreement was not invalid: there
was no infringement of bona mores. Furthermore, it had not
been established that the KMD Circular was part of the
mandatory law of Kuwait, as distinct from a term of the M-84
contract or that it belonged to international public policy (...) The
arbitration tribunal made a strong case for the
separability of the arbitration agreements and the function
of illegality as a defence that renders an agreement void. The
defendants sought to have the award annulled before the Swiss
Supreme Court claiming that Westacre was a shell for a member
of the Kuwaiti Government () [and] the Swiss court refused to
go behind the facts as found by the arbitration tribunal and
dismissed this claim in 1995. Later in 1995, Westacre applied to
enforce the award in England () the respondents presented
more evidence of their claim that Westacre was merely a shell
for the Kuwaiti government official, including that Westacre was
run by the son-in-law of the government official in question. ()
The Court of Appeal refused to reopen the facts holding that the
public policy of sustaining international arbitration awards on the
facts of this case outweighs the public policy in discouraging
international commercial corruption. 17
Another interest case in which again the claims of corruption are
disregarded is Frontier AG v. Thomson CSF:
In Frontier AG v. Thomson CSF, the defendant () challenged the
award, which had granted the Claimant its claims based on the
Letter-Contract. The challenges were based on various grounds
including public policy. Thomson specifically requested the
setting aside of the award ()
[one of the] motives of the
challenge has been the bad application of the article 178 of the
old French penal code, which sanctioned influence peddling.
Thomson specifically alleged that by excluding the situation of
the Chinese officials, the award () legitimized peddling, which
is contrary to the international public policy. 18
The Swiss
Supreme Court decided that even if there is an error in iudicando
or bad application of the law, that situation couldnt justify
setting aside the award because there does not exist in
international arbitration a revision on the substance19

17 LEW. Op. Cit. Pp. 216-217

18 SAYED, Abdulhay. Corruption in International Trade and
Commercial Arbitration. Kluwer Law International. 2004. Pp. 39919 Ibid.

An interesting case in which was recognized the existence of the

fight of corruption as part of the international public policy is Hilmarton
v. OTV:
The dispute dealt with a consultancy fee payable by a French
firm (OTV) to an English firm (Hilmarton) in relation to a contract
in Algeria. The award was made in 1988 in Switzerland and held
that the payment was not due as the use of intermediaries was
prohibited in Algeria in respect of public contracts, although
Algerian law was not chosen by the parties. It was alleged that
corrupt practices were involved, possibly violating
international public policy in Algeria and Switzerland. The
award was successfully challenged in Switzerland in 1990 but
was recognised by the Court of Appeal in Paris and the Cour de
cassation in 1994. A second award was rendered in Geneva in
1992 and this was initially recognised in France in 1995 by the
Versailles Court of Appeal. (156) The Cour de cassation, however,
reversed the judgment of the Court of Appeal in Versailles as it
violated the res judicata of the recognised first award. (157) The
second award was enforced in England.20
European Gas Turbines v. Westman establishes that a contract
having influence-peddling or bribery is contrary the ethics of
international business21:
On 11 December 1985, Alsthom Turbines a Gaz S.A. (ATG)
(Alsthom), the predecessor of European Gas Turbines S.A. (EGT)
and Westman International Ltd. (Westman) concluded a contract
under which Westman undertook to assist Alsthom in obtaining
first the prequalification and then the contract for the supply of
gas turbines for a petrochemical project at Arak, Iran(). The
contract was concluded for three years and provided for a
commission fee covering the expenses of all nature borne by
Westman in order to perform its task; the amount of the
commission was to be determined by mutual agreement before
Alsthom submits its offer. Westman was subsequently
prequalified but refused to pay the commission. Westman
Started an ICC arbitration () in Paris. () the arbitral tribunal
()[requested] from Westman a detailed report of its expenses
for the Arak Project. () An arbitral award in favor of Westman
was rendered on 21 March 1992. Alsthom () [now] EGT, sought
annulment of the award before the Paris Court of Appeal alleging
that the awards enforcement would violate public policy on two
grounds: first, because the award gave effect to a contract which
was null and void as its real object was traffic
20 LEW. Op. Cit. P.718-719.
21 SAYED. Op. Cit. P.307

in influence and bribery; and second, because () an expert by

an accounting firm,() showed that Westman had not paid ()
The Court() found that () some parts of the award were
affected
by
fraud
committed
by
Westman
in
the
arbitration. The court annulled the award () applying the
general principle of law fraus omnia corrumpit.22
In the scope of ICSID it is also possible to find and interesting
case between Chile and Peru:
In the case Lucchetti Enterprises, S.A. (Chile) and Lucchetti Peru,
S.A. (Peru) v. Republic of Peru (ICSID Case No. ARB/03/4) The
Company commenced ICSID arbitration against Peruvian
Government, alleging that permits for the construction of
manufacturing plant were revoked illegally. [The] Government
[of Peru] counterclaimed that the judicial orders that resulted in
the issuance of the construction permits were obtained by
corruption of public officials of the previous administration,
and thus no jurisdiction for the arbitration pursuant to BIT. [The]
Arbitration Award (2005) Determined lack of jurisdiction as
facts at issue predated the BIT () and also held that, were
there proof of the alleged corruption, such would have been
additional basis for the determination of lack of jurisdiction.23
Finally24 we have the famous case World Duty Free Company
Limited v the Republic of Kenya in which was involved the former
President of Kenya Daniel Arap Moi:
In such case (Award dated 4 October 2006) the claimant
alleged, among other things, that the Kenyan government had
expropriated its two duty free complexes the Nairobi and
Mombassa International Airports. In response, Kenya alleged that
its underlying agreement with claimant was unenforceable
because it had been obtained with a personal donation
of $2 million to the then President, a fact that the claimant
had described in detail in its original submission. The tribunal
retained jurisdiction and found the facts surrounding the
allegation of bribery were not in dispute. Based on its conclusion
22 HANOTIAU Bernard. Misdeeds, Wrongful Conduct and Illegality in
Arbitral Proceedings, in VAN DEN BERG, Albert Jan (ed.), International
Commercial Arbitration: Important Contemporary Questions, ICCA
Congress Se270.
23 Presentation of Law Firm Steptoe & Johnson L.L.P. Website
http://www.steptoe.com/assets/htmldocuments/Corruption%20in
%20Arbitration%20Presentation.pdf
24 For a more complete list of the arbitration cases that involve
different issues on corruption see footnote 10 in Op. Cit. HAUGENEDER.

that bribery was against transnational public policy, the

tribunal found the contract was void and dismissed the
claimants claim.25
3. Perspective on the problems that Corruption arises in
International Arbitration
After a quick overview on some of the cases of arbitration in which
some problem related to corruption and criminal, it is possible to
realize that there are a number of situations to consider.
From the perspective of the players that might be involved in
corruption, it is possible to consider: arbitrators' misconduct;
witnesses' misconduct (including expert witnesses); or the parties'
misconduct.26 And even in the case of the parties it is possible to
consider a number of situations in which either there is a
transformation of the party (i.e. because of a merger or acquisition).
In general terms, the number of problems that the corruption might
create seems to be endless:
whether the tribunal is allowed to adjudicate the matters tainted by
bribery;
what is going to be the concept of bribery that will be used in order
to determine if there is bribery.
- whether the arbitrators can investigate the situations that can be
deemed as bribery.
- whether the arbitrators are obliged to report their suspicions or
findings to the authorities;
what the appropriate standard of proof is;
what is the law applicable to private law consequences of bribery is,
and how a particular rule will affect the outcome of the dispute; and
whether and how the issue of bribery can potentially be revisited
before the State courts in proceedings for the setting aside, or
recognition and enforcement, of the arbitral award.27
The abovementioned topics are just an example of the number of
situations that is necessary to consider when addressing to corruption
in International Arbitration.
4. The possible attitudes of the arbitrators.

25 BORN Op. Cit.

26 HANOTIAU. Op. Cit. P. 262
27 PAVI. Op. Cit. P. 668

As we have seen from some of the abovementioned cases of

corruption in arbitration, the attitude of the arbitrators (and also the
tribunals) is totally different depending on the approach of the
arbitrators to the principles, and sometimes also on the domestic law
of applied to arbitration. As a matter of fact, with the only exception of
the Civil Law Convention on Corruption 28 of the Council of Europe, The
Global Compact29 and a few articles of the United Nations Convention
Against Corruption (UNCAC), in general terms not much attention have
been paid to the civil consequences of the corruption, being the main
exception the concern and efforts on recovery of assets of corruption 30.
Unfortunately it is not possible to find clear-cut standards, guidelines or
instructions to the arbitrators in order to know how to deal with
corruption. Consequently, it is totally left to the discretion of the
arbitrators the decision on what to do when having notice of a
corruption situation during an arbitration procedure.
The behavior of the arbitrators on the different awards that we could
find around the world can be characterized in 2 opposed attitudes: 1)
Concern on corruption considering that because corruption is
harmful to trade and society, all its manifestations ought to be
combated by responsible arbitrators31; and 2) Indifference to
corruption: It predominantly regards the Arbitrator as a mere
instrument of the contract, of which he is emanation32
Considering the extent of this presentation we will not address to all
the abovementioned problems that an arbitrator might have to solve
when dealing with corruption 33. Instead, we will focus on one specific
duty: the obligation of denunciation to the authorities in charge of the
prosecution.
5.- The obligation of the International Arbitrator to report
cases of corruption or crimes
28 Full text available at the website
http://conventions.coe.int/Treaty/en/Treaties/Html/174.htm
29 Global Compact Principle Against Corruption. Website
http://www.unglobalcompact.org/issues/transparency_anticorruption/
30 Probably the most important effort in this regard is the Program
Stolen Assets Recovery (StAR), consisting in a partnership between the
World Bank and United Nations in order to help and build capacities on
different countries towards the recovery of assets related to corruption.
Website http://star.worldbank.org/star/about-us/our-vision
31 SAYED. Op. Cit. P. 424
32 Ibid.
33 For a more comprehensive analysis of all the possible cases see
SAYED. Op. Cit. 424- 428

One of the main issues is if there is any conflict with any of the duties
that the arbitrator has when performing such role. The most obvious
conflict might be related to the duty of confidentiality to the
parties. However, it seems to be a majority opinion that that the
principle of confidentiality is not as important as it used to be. 34
Additionally it has also been said that many arbitrations involve such
huge sums and matters of such widespread, often political, interest,
that publicity has become inevitable.35 So in general terms it is
possible to understand that the duty to contribute to fight the
corruption general duty that is possible to construct from the general
principles inspiring the anti-corruption conventions- is something more
general and it will override the duty of confidentiality of the arbitrator.
A second reason to consider is the law of the seat of the arbitration. If
the arbitrator is physically located in the seat of arbitration it is likely to
be a breach of the law of such country. So such situation is something
important to take into account when deciding whether it is necessary
to report a situation of corruption. At the same time the law of the seat
of arbitration can be an important guideline on the definition and the
threshold to consider a behavior as corruption.
In the other hand, there are important practical reasons for the
arbitrator to consider that there is a duty to report. The arbitrator has
a duty to the parties to issue an award that is enforceable according to
the New York Convention avoiding the risk that it can be refused
according to the Article V of the New York Convention.36
Finally, following the ideas of Pierre Lalive it has been established the
recognition that an arbitrator has the duty to render a decision
susceptible of being binding, which means that it needs to be
compatible with the international public policy.37 The best proof of
the importance of such kind of policies is the explicit reasoning of
World Duty Free Company Limited v the Republic of Kenya.

34 NANSARRE, Cecilia. International Commercial Arbitration and

Corruption: The Role and Duties of the Arbitrator. In Transnational
Dispute Management. Vol. 10, issue 3Published. May 2013.
35 NICHOLLS Colin QC and others. Corruption and misuse of public
office. 2006. P. 251.
36 BORN Op. Cit.
37 LALIVE, Pierre. Ordre public transnational (ou simplement
international et arbitrage international. Rev. Arb. 1986. 329 a 331.
Cited and translated by NASARRE. Op. Cit. P. 16

6.- Arbitrators and the choice of substantive law for the

corruption issues.
If there is a duty to report, the next question is which law should
be applied. My personal view is a little bit different that some of the
opinions supported by part of the doctrine in which this situation is
related to the decisions of the parties related to the substantive law of
the choice of the parties for arbitration. In this regard Cecilia Nansarre
asserted the following:
We are here concerned with the law governing the issue of corruption
and more precisely, the act of reporting the corrupt conduct to the
relevant authorities.()The first law that comes to mind is the law
chosen by the parties, but the arbitral tribunal can in some instances
set this chosen law aside.38
In the same sense Abdulhay Sayed, in the Chapter 9 Choice-of-Law
Problems and Corruption of his comprehensive and complete book
devoted to Corruption and Arbitration establishes that:
The choice of the applicable law is founded on a national rule of
conflict, which recognizes that parties may agree that their contract is
to be governed by a law of their own choice. () This presentation of
the principle of party autonomy has received wide acceptance in the
doctrine and in national laws39
Nonetheless, Sayed acknowledges that the idea that the parties
are the ones choosing the law even when there are corruption issues is
not a unanimous idea:
However, it has been argued that the applicability of mandatory
laws cannot be dependent on the parties choice, since they are
imperative, therefore inevitably applicable, notwithstanding the
parties agreement40
How does it come that the agreement of the parties is not having
a meaningful weight when deciding the laws that will be applied to the
corruption issues?
The reason for this situation is a mix of several factors. In the
very first place there a no specific regulations related to corruption in
the context of International Arbitration on any of the International

38 Ibid. p. 19
39 SAYED. Op. Cit. P. 160-161
40 MAYER, Pierre; and HEUZ, Vincent. Droit international priv. 2001.
P. 473 AND KASSIS, Antoine. Le nouveau droit europen des contrats
intarnationaux. P. 198. Cited by SAYED. Op. Cit. P. 161

agreements related to this matter.41 Probably the only convention that

is setting a minimum standard for jurisdictional issues is the OECD
Convention On Combating Bribery Of Foreign Public Officials In
International Business Transactions establishing in its article 4 42: 1) that
the main criterion for a country to assert jurisdiction 43 over a bribery
crime is that at least part of the criminal act have been performed in
such country; 2) the most important exception to the main criterion of
territoriality is to use the one of nationality when nationals of the

41 A good example of this situation is the Technical Guide To The

United NationsConvention Against Corruption (2009). Prepared under
the coordination of the United Nations Office on Drugs and Crime.
(available at the website
http://www.unodc.org/documents/corruption/Technical_Guide_UNCAC.p
df )
Even thought it addresses to the obligation to report a crime and some
of the duties of the judge, but without considering the situation of the
arbitrators.
42 Article 4Jurisdiction
1. Each party shall take such measures as may be necessary to
establish its jurisdiction over the bribery of a foreign public official
when the offence is committed in whole or in part in its territory.
2. Each Party which has jurisdiction to prosecute its nationals for
offences committed abroad shall take such measures as may be
necessary to establish its jurisdiction to do so in respect of the bribery
of a foreign public official, according to the same principles.
3. When more than one Party has jurisdiction over an alleged offence
described in this Convention, the Parties involved shall, at the request
of one of them, consult with a view to determining the most
appropriate jurisdiction for prosecution.
4. Each Party shall review whether its current basis for jurisdiction is
effective in the fight against the bribery of foreign public officials and,
if it is not, shall take remedial steps.
43 In this regard it is useful to bear in mind the different kind of
jurisdictions distinguished by the Restatement (Third) of the Foreign
Relations Law of the United States (1987), because they are helpful in
order to analyze the problems, beyond the frontiers of US: 401.
CATEGORIES OF JURISDICTION
Under international law, a state is subject to limitations on
(a) Jurisdiction to prescribe, i.e., to make its law applicable to the
activities, relations, or status of persons, or the interests of persons in
things, whether by legislation, by executive act or order, by
administrative rule or regulation, or by determination of a court;

country have committed the crime abroad; 44 3) In what is not clearly a

mechanism to solve jurisdictional controversies it is established that
the countries claiming jurisdictional should decide that situation in
favor of the most appropriate jurisdiction for prosecution which in
general terms is related to the jurisdiction that is in better conditions to
collect the evidence available. So in practical terms it is usually the
place in which the person who is accused of the crime is located or the
country in which most of the acts related to the crime were performed.
One interesting situation in Criminal Law at the International
Level is that even though there is no global treaty regulating which
State is having priority on its powers to create jurisdiction over a
crime45, there are few legislations that allows to prosecute a person in
absence, so in practical terms at the end the country that will be able
to exert jurisdiction will be the one that is able to
detain/secure/extradite the person suspicious of having committed the
crime.
In the second place there are no reasons for the local authorities
in charge of the prosecution/ judgment of the crimes to feel that they
are bound by the decision of the parties regarding the law applicable to
their dispute. In general terms it is only possible to find a general duty

(b) Jurisdiction to adjudicate, i.e., to subject persons or things to

the process of its courts or administrative tribunals, whether in civil or
in criminal proceedings, whether or not the state is a party to the
proceedings;
(c) Jurisdiction to enforce, i.e., to induce or compel compliance or to
punish noncompliance with its laws or regulations, whether through
the courts or by use of executive, administrative, police, or other nonjudicial action.
44 At some point it is possible to find a trend pushing towards
universality, but for the moment is not possibly to find evidence in
order to seriously support such tendency, for now.
45 In general terms the criteria used to prescribe jurisdiction by most
of the countries are: 1) Territorial Principle; 2) Nationality Principle; 3)
Passive Personality Principle; 4) Protective principle; and 5) Universality
Principle. See LUBAN, David; OSULLIVAN Julie; and STEWART, David P.
International and Transnational Criminal Law. 2010. P. 171-172

of cooperation among all the countries4647.

So international
conventions on bribery, and specially the OECD Convention, are setting
a the bottom-line on the corruption behavior that should be
criminalized, but in general terms it would be up to each country how
far do they want to go on the use of their jurisdictional powers to
prescribe.
Considering all these factors the arbitrator should report the
criminal/ corruption activity to the authority that is in the best
conditions in order to exert the jurisdiction to enforce. The use of this
criterion might imply that it is necessary to report to the prosecution
authorities of more that one country if there are good grounds to
consider that possible liable persons or the evidence is in more that
one country. Such jurisdiction might or might not much with the
jurisdiction of the seat of the arbitration of the substantive applicable
law.
At the end the arbitrator does not necessarily need to send the
report of the criminal activity to the right criminal jurisdiction,
because probably it is not possible to establish for sure which is such
jurisdiction before conducting a thorough investigation of all the facts,
and such task is the work of the prosecution authorities.
So as far as the arbitrator is sending the report to the authorities
of a country that is likely to have jurisdiction over the crimes unless
46 Inter-American Convention On Mutual Assistance In Criminal
Matters.Article 2 SCOPE AND APPLICATION OF THE CONVENTION
The states parties shall render to one another mutual
assistance in investigations, prosecutions, and proceedings that
pertain to crimes over which the requesting state has jurisdiction at
the time the assistance is requested.
This convention does not authorize any state party to
undertake, in the territory of another state party, the exercise
of jurisdiction or the performance of functions that are placed within
the exclusive purview of the authorities of that other party by its
domestic law.
47 European Convention on Mutual Assistance in Criminal
MattersArticle 1
The Contracting Parties undertake to afford each other, in accordance
with the provisions of this Convention, the widest measure of mutual
assistance in proceedings in respect of offences the punishment of
which, at the time of the request for assistance, falls within the
jurisdiction of the judicial authorities of the requesting Party.

the country is known for having a bad record on corruption of the

authorities- it is possible to consider that the arbitrator is fulfilling his
duties before the international law.
Additionally it might be important for the arbitrator to report to
the local authorities if there is any special duty to report the crimes
from the perspective of the law of the seat of arbitration.
7.- Conclusion
It is possible to realize that even the corruption issues are
growing in importance within the arbitration. Such situation doesnt
mean that the level of criminality in the area of Arbitration is
increasing. On the contrary, because companies, NGOs and countries
are more aware of the importance of corruption, it becomes more
difficult to simply tolerate situations in which, for instance, investors
offer bribes to the authorities of different countries, and specially those
with weak institutions.
The interest of this topic is not only academic, but also very
practical. If there is a big interest to prevent and to punish corruption,
it is important to be aware of the different ways in which is possible to
have notice of corruption. Since almost all the big global companies
consider at some point international arbitration instead of the local
courts it is important to try to construct clear rules in this area. In other
words, what is the point of having so many rules related to compliance
and the education of the businessmen if we are not having clear rules
for arbitrators and corruption situations along the procedures.
It is also really urgent at the international level to consider to
issue rules or at least guidelines for the arbitrators. Currently is totally
valid for an arbitrator to adopt an indifferent behavior regarding
corruption. Of course it is not necessary to burden the arbitrators with
all the duties of the ordinary judges, but at least it is important to give
them some ethic guidelines. Why if for an attorney his/her ethical
regulation is so important and detailed, but for the arbitrators is almost
inexistent. Why none of the arbitration or anticorruption conventions
have addressed this issue. Certainly here is a huge pending task,
because constructing a smart regulation that doesnt disregard the real
independent nature of the arbitrators is not an easy task. But certainly
is time to begin to work on that.
From the other side of the coin, probably it is also possible to set
some standards on the arbitration clauses for the companies from
institutions like Global Compact. Certainly is something that should be
done carefully, but it is really worthy to begin to try.

For the moment, it is possible that the Arbitrators do have the

duty to report the situations of corruption when they have notice of
them as consequence of their role of arbitrator, because they have to
render valid awards, and also because there is an international public
policy demanding such kind of commitment, and arbitrators should
respect such duties.
Since there are no clear guidelines on the regulation of the
arbitration that might be applied, that decision is not something on
what the arbitrators are called to make decisions. They fulfill the duty
to report corruption submitting the information they do have to the
prosecution authorities that are more likely to have jurisdiction
considering the domestic regulations (the most important criteria here
are territoriality and nationality). They also need to check if according
to the law of the seat of arbitration it is necessary to report to such
prosecution authorities.