Fraud, Bribery And Corruption: Impact On International Arbitration

Summary and implications

Arbitration is a confidential and consensual dispute resolution process and there are question marks around how suited it is to deal with disputes that raise issues around illegal conduct. Regrettably, issues of fraud, bribery and corruption do arise in the context of commercial disputes between international parties and this article looks at how arbitral tribunals deal with such matters.

Jurisdiction of the tribunal

It is well established that allegations of illegal conduct will not mean that a dispute is incapable of being referred to arbitration. The doctrine of separability means that even if a contract were to have been procured by fraud, the arbitration agreement contained within that contract should survive as a standalone agreement to arbitrate, giving the arbitral tribunal the right to decide whether it has jurisdiction to consider the dispute.