Corruption of the Investor as a Ground for Excluding the Jurisdiction of Arbitral Tribunal in International Investment Arbitration

Corruption, and in particular the bribery of public officials, causes great harm to society, especially in countries with economies in transition and in developing countries. Pervasive corruption affects both citizens and businesses. This phenomenon, unfortunately, has also affected the practice of international investment arbitration, where the arbitration tribunal, in the course of resolving disputes between an investor and the state, has to deal with facts of possible corruption (giving a bribe, bribing the public officials, and so on) on the part of investors during the entry into the state market, which, undoubtedly, does not correspond to the legal norms of almost any state. This fact is used by states (as a rule, respondents in investment arbitration) as a tool to exclude the jurisdiction of the investment arbitration tribunal. In this paper, an in-depth analysis of the legal mechanisms for excluding the jurisdiction of the arbitration tribunal in connection with investor corruption will be provided, as well as a number of high-profile investment arbitration cases in which the arbitration tribunal ruled that there was no jurisdiction due to corrupt actions of the investor during the investment process will be examined