Anti-Corruption Laws and Investment Treaty Arbitration: An Asian Perspective

Abstract

There are multiple international agreements that require states to criminalise corruption. This chapter deals with the effects of such international anti-corruption agreements in the field of investment treaty arbitration. Focus will be placed on Asia. This Asian perspective is pertinent given the continued prevalence of corruption in many Asian jurisdictions, despite their growing economic importance. International agreements on corruption and their implementation in domestic law can have an unintended consequence in the field of investment treaty arbitration. This is because anti-corruption laws can provide states with an effective defence against an arbitral tribunal’s jurisdiction. This chapter concludes with a proposal on how this consequence can be tempered by applying to international investment law the more nuanced approach to illegality established in recent common law jurisprudence. The article will be divided into four sections. Section 4.2will survey multilateral and bilateral international agreements on corruption. Section 4.3 will discuss how international agreements on corruption have been implemented in the domestic laws of various Asian jurisdictions. It will consider differences in anti-corruption laws of Asian states and comment on whether such differences give rise to uncertainty as to the scope of corruption crimes. Section 4.4 will look into how host states can use anti-corruption laws as a means of evading the scrutiny by arbitral tribunals of confiscatory conduct. Section 4.5 will argue that the ‘all or nothing’ approach to investments tainted with corruption should be replaced with a balancing approach to illegality.