Research On Legal Issues Of International Investment Arbitration Involving Corruption

The development of international investments has resulted in increasing corruption, drawing growing attention to the relevant legal ramifications of such international investment arbitration. When investment transactions are suspected of corruption, the disposition of the arbitration tribunal becomes an urgent reality. But recently, few domestic scholars study on this issue. Although at present, there are very few international investment arbitration cases in which a Chinese enterprise is the claimant or the Chinese government is the defendant, with the growing economic development in this country, the likelihood of such submissions will increase. Studying legal issues about international investment arbitration of disputes involving corruption will have great practical significance on strengthening the management of foreign investment and supervising domestic enterprises’ behavior on overseas investments. This will aid in safeguarding the interests of our country and transnational enterprises.This article is divided into six parts. Using comparative analysis, case studies, and literature research methods, the author has analyzed these cases, revealing a general position and processing mode of international investment arbitral tribunal on alleged corruption cases, illuminating the legal consequences of international investment involving corruption.The first section presents the problem. This section introduces our country’s current situation of frequent occurrence of corruption in international investment field, thus leading to a realistic problem how the international investment arbitral tribunal will deal with the disputes involving corruption.The second section defines and presents a specific situation of corruption. In this section, the author deeply analyzes the subject, the behavior pattern, and the object of corrupt conduct in international investment trading.The third section is about the effect of corruption on international investment contracts. The mainstream view on this issue has changed from negation to affirmation. This article holds the viewpoint that international investment contracts involving corruption is arbitrary and analyzes the reasons.The fourth section is about the proof of corruption in international investment arbitration. The article summarizes the theory of standard of proof in evidence law. Secondly, it introduces an EDF case as an example of how international investment of arbitrary tribunals always heightens the standard of proof for allegations of corruption and indicates that international investment arbitral tribunal doesn’t have reasonable ground to do so. A higher standard of proof cannot contribute to anything but corruption. Finally, extracting information from English courts, the cases give advice and suggestions on the proof of corruption for international investment arbitral tribunal.The fifth section is about the legal consequences of corruption in international investment arbitration. This section summarizes the position of the tribunal on allegations of corruption in a series of international investment arbitration cases and then analyzes the negative effect of ICSID arbitration award and its basis if bribery of foreign investor or corruption of host country is proven.The sixth section is about the advice on China’s participation in overseas investment and cooperation. Based on the above analysis, we suggest that Chinese investors overseas should strictly abide by the relevant laws and regulations, avoid partaking in bribery, and pay more attention on evidence collection and preservation. At the same time, China, as the host country, should perfect the definition of “bribery” in domestic law, take prompt legal action after the knowledge of the corruption in international investment trading and stipulate the proof standard of corruption in BIT explicitly.