ARBITRATORS’ INITIATIVE: CORRUPTION IN INTERNATIONAL ARBITRATION
Corruption pervades the international business community, its tentacles spreading bribery, kickbacks, embezzlement, fraud, collusion, extortion, abuse of discretion, financial crime, falsification, favouritism and nepotism to every corner of the globe.
A key piece of analysis is Transparency International’s Corruption Perceptions Index (CPI) – an annual examination that rates countries and territories around the globe by their perceived levels of public sector corruption. Based on its 2023 analysis, corruption is thriving across the world.
According to the CPI, over two-thirds of countries score below 50 out of 100 – on a scale of 0 (highly corrupt) to 100 (very clean) – which strongly indicates serious corruption problems. The global average is 43, while the vast majority of countries have made no progress or declined in the last decade. Moreover, 23 countries fell to their lowest scores to date in 2023.
Only 28 of the 180 countries measured have improved their corruption levels over the last 12 years, and 34 have significantly worsened. Moreover, despite progress made across the planet in criminalising corruption and establishing specialised institutions to address the issue, corruption levels remain high globally.
Corruption in international arbitration
While corruption in all its forms remains a serious issue for international businesses’ trading and investments, at the same time it is also a disruptive factor in international arbitration – an environment which may give rise to allegations of corrupt actions.
“Corruption of a tribunal has long been recognised as a ground for setting aside or denying recognition and enforcement of an arbitral award,” points out Lucinda A. Low, a partner at Steptoe & Johnson LLP. “Allegations of corruption in relation to claims that have been submitted to arbitration, however, is an issue that only recently arbitral institutions have begun to grapple with.”
Jul-Sep 2024 issue
Fraser Tennant