Anti-corruption rules in international commercial arbitration

Corruption has been a plague in the society since the first days of the history and the fight against corruption has become increasingly critical since the international trade has expanded significantly in recent decades. Since the 1990s, anti-corruption measures have gained momentum worldwide and with the signing of United Nations Convention Against Corruption (UNCAC) in 2003, numerous countries have come together and signed international treaties against corruption and started to act in unison to wipe out corruption from the face of the earth. Parties to these international treaties have undertaken significant legal system reforms to integrate the anti-corruption measures into their laws, leading to a dynamic process that has fostered diverse opinions and implementations. Given that most of the European countries even permitted bribery to be deducted from taxable income until the late 1990s, the contrast with today's far-reaching anti-corruption rules is stark. Nowadays even a minor infraction, such as an employee of a company paying a bribe to grease the wheels on a sluggish customs procedure could have serious implications for the entire company. Due to this extreme and fast paced change and due to corruption allegations rarely making it to the arbitration procedures (or even when they do, they might be dismissed and not explored by arbitral tribunals) there are not many case-laws about corruption in international commercial arbitration. The existing arbitration awards or related court decisions feature different opinions and contradicting decisions. In this thesis we explored the anti-corruption measures and their applications in international commercial arbitration. In the first section, we began by defining corruption and the stages where corruption can occur; then we named several international institutions fighting with corruption, exploring international treaties and reviewing the anti-corruption laws of select countries. In the second section, the effects of the public order and the anti-corruption rules about the arbitration process were examined. The common aspects of public order and mandatory rules, the scope of anti-corruption rules, and the direct applicability of anti-corruption rules in the arbitration process was evaluated in this context. Subsequently, questions concerning whether the main contract can be invalidated due to reasons such as immorality when a corruption allegation is made; whether this situation can affect the validity of the arbitration agreement if the main contract is invalid; can the subject still be eligible for arbitration if corruption is alleged; if the subject becomes ineligible for arbitration, can it cause the arbitration agreement to be null and void and cause the arbitration tribunal to lose jurisdiction over the subject matter; which anti-corruption rules shall be applied in the arbitration process were addressed and the process of investigating and proving corruption allegations was explained. In the third and final section, we analyzed the effects of anti-corruption rules in international commercial arbitration and tried to answer a few questions such as a) If the arbitration tribunal continues and renders an award, can this award be set aside on the basis of allegations of corruption? b) If the answer is yes, which court is authorized to give the decision to annul the reward and what are the laws to be applied to the case; c) If the corruption is ascertained but an award was rendered nevertheless, will this cause the award to be refused recognition and execution on the basis of public policy or other reasons? To summarize, corruption is considered unethical and a violation of the common sense of justice and the fight against corruption is expanding worldwide with international conventions. These conventions urge signatories to incorporate improved measures and legal regulations, fostering a global effort to eradicate corrupt practices and promote transparency, integrity and accountability. In the realm of international commercial arbitration, the arbitrators have a crucial duty to ensure that arbitration doesn't condone or provide legal protection to corruption and arbitration proceedings are free from corruption. Arbitrators are expected to uphold the principles of fairness and impartiality, diligently investigate any signs of corruption, and take appropriate actions to address such misconduct. This commitment to integrity in arbitration aligns with the broader global initiatives aimed at combating corruption, ultimately contributing to a more just and equitable international business environment.