Sayed, Abdulhay, Corruption in International Trade and Commercial Arbitration, 2004
A C.I.P Catalogue record for this book is available from the Library of Congress.

Abdulhay Sayed, Corruption in international Trade and Commercial Arbitration.

ISBN 90-411-2236-2



vii. Reference to a So-Caled Consensus in Arbitration

It is often referred to the arbitration practice as a further evidence of the fact
that the Arbitrators of international trade, following the conclusions of Judge
Lagergren, have overwhelmingly considered that they were bound by a trans-
national rule of public policy abhorrent of corruption.945Observation of the
arbitral practice suggests that a majority of the published arbitration cases on
issues of intermediation in connection with government procurement do recog-
nize that the prohibition of corruption is a universally shared value, which
ought to be applied regardless of the parties' agreement.

In Westacre v. Jugoimport, the arbitral Tribunal recognized that it was bound
to give effect to the "provisions of the law which is excluded" only to the extent 
that theyr are part of the "ordre public interenationat..., examples of this are
provisions to fight corruption and bribery."946



In the great majority of countries, corrupt relations involve all grounds of
prohibition at once. We have seen that from the repressive perspective, the
prohibition of corruption violates good morals insofar as it constitutes an
affront to the requirement of honesty in international trade. Corruption is also
regarded as violative of public policy insofar as it constitutes a disruption in
the honest discharge of the public function. Those concerns prompted the
enactment in many countries of laws to sanction the multifaceted manifestations
of corruption, whice makes corruption a problem of illegality as well.

We have seen that those concerns have also animated inter-national atten-
tion, which in turn yielded debates and instruments along the principles of
condemnation and prohibition of corruption. While it may well be said that
the values repugnant of corruption have managed to be embodied in numerous
international conventions, the immanent application of such values beyond the
circle of States which ratify those instruments, remains vigorously asserted.1076
Many expressions have interchangeably been used in the literature and the
available arbitral instances to refer to the general reach of those values. Such
expressions inculded formulations like "good morals", "bonos mores", "ethics
of international trade", and "transnational public policy."

The common theme that generally unites all the preceding considerations is
that corruption involves matters of general interests. Its prohibition so it is


argued, aims, at protecting the integrity of the public function and the honest
conduct of trade. The need to protect the general interest renders the responses
accorded to corruption rather emphatic. In particular, it is generally held that
a contract involving corruption is null and void. This proposition is best
articulated in article 8 of the Council of Europe's Civil Law Convention. which
states the followung:

"Each Party shall provide in its internal law for any contract or clause
 of a contract providing for corruption to be null and void."

It is commonly asserted that such nullity is absolute because corruption
affects the general interests.1077This in turn entails consequences as to the party
authorized to invoke nullity as well as to the effect of such nullity on the rights
and obligations arising out of the corrupt scheme.


(9) If corruption is ascertained, it wil be declared illegal, immoral or in
violation of public policy. It is sanctionned by nullity of the contract
whose objects is corruption, despite the paradoxes in the implementation
of nullity that the Arbitrator encounters. When an Arbitrator reaches
this stage, his or her initial position no longer affects arbitral decision.
The Arbitrator operates in strict compliance with the rule that sanctions
corruption. However, a repressive initial position may drive an
Arbitrator to consider alternative means of sanction, if no corruption
is ascertained or if the existence of any universal condemnation is found
too controversial. Such alternative sanctions may justify a refusal to
enforce an intermediation contract, either for absence of evidence of
services rendered by the intermediary, or because of the intermediary's
fraudulent presentation of evidence during the arbitral proceedings.

945See e.g., Jean-Baptiste Racine, L'arbitrage commercial international et l'ordre public, p. 394, par. 711.
946ICC Award 7047, Bulletin de l'Association suisse de l'arbitrage, 1995, p. 332.
1076See supra p.291.
1077See generally, Vincent Heuzé,"Corruption", p.4, par. 22ff.

Referring Principles
Trans-Lex Principle: IV.7.2 - Invalidity of contract due to bribery
A project of CENTRAL, University of Cologne.