Pointing fingers with unclean hands: Dealing with corruption in international investment arbitration
International investment tribunals face the question of whether a corrupt investor has a legal remedy for breaches of a host states substantial obligations under a bilateral investment treaty. Respecting the laws provisions of BITs limit the cover of protection to investments made in accordance with...
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| Format: | text |
| Language: | English |
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Animo Repository
2018
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| Online Access: | https://animorepository.dlsu.edu.ph/etd_honors/393 |
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| Institution: | De La Salle University |
| Language: | English |
| Summary: | International investment tribunals face the question of whether a corrupt investor has a legal remedy for breaches of a host states substantial obligations under a bilateral investment treaty. Respecting the laws provisions of BITs limit the cover of protection to investments made in accordance with the respective laws of a host state. Corruption or bribery is therefore a defense that may be invoked to defeat an investors claim. The problem with this is that an equally corrupt host state gets a free ticket to escape liability.
Corruption should not be an absolute defense that will preclude admissibility of claims and jurisdiction of tribunals because it operates to exculpate an equally guilty host state involved in corrupt acts. A cleansed hands approach balances the legitimate expectation of investors and the interest of host states consistent with anti-corruption policy in international public policy. In the face of apparent or alleged corruption, where both parties have engaged in corrupt conduct, their illegality operates to temporarily cleanse both guilty hands as to surpass the jurisdictional and admissibility hurdle so that a tribunal will be able to fully evaluate the claims and defenses during the merits stage.
Based on a survey of existing BIT provisions on anti-corruption, the Slovakia- Iran BIT proves to be an ideal starting point for states interested in incorporating anti-corruption provisions in their BITs. In the Slovakia-Iran BIT, consent is explicitly stated and clearly delineated, and it presents a more comprehensive guideline for tribunals dealing with claims involving corruption. |
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