ARBITRATION, CORRUPTION AND POST-AWARD CONTROL IN FRENCH AND ENGLISH COURTS

Abstract

In September 2021, the French Cour de Cassation reversed the annulment that the Paris Cour d'appel earlier had granted in regard to an arbitral award in Alexander Brothers v Alstom on grounds of corruption. This brought French courts in line with their English counterparts, at least in that one case, the latter having accepted the Alexander Brothers award as enforceable. Noteworthy beyond the welcome consistency that the recent French judgment imparts in one case, that and other recent judgments cast light on several issues in international arbitration, including the arbitrability of allegations of fraud or corruption, the relevance of evidence of corruption ‘downstream’ from a contract, and the legal effects (if any) on third parties of internal compliance regimes that enterprises adopt in response to national regulatory and enforcement actions in respect of corruption.

I. INTRODUCTION

Divergences between French and English courts in recent post-award recognition and enforcement proceedings call attention to the difficulties that award creditors sometimes face after arbitration. A noteworthy example involved post-award challenges by Alstom, the French infrastructure company, against an award in favour of Alexander Brothers, a Chinese consulting firm.¹ The Cour d'appel de Paris annulled the arbitration award.² The High Court in London, by contrast, refused Alstom's request to set aside the award, leaving it undisturbed and enforceable in the United Kingdom.³ Both courts heard allegations that the consulting firm had engaged in corrupt practices which, the award debtor argued, placed the award within the scope of the international public policy exception to recognition and enforcement.⁴

A judgment of the French Cour de Cassation of 29 September 2021⁵ reversed the Cour d'appel's annulment and so the award is now recognised and enforceable in both France and the UK, alleviating immediate concerns regarding conflicting approaches to post-award controls. However, it is too early to conclude that the Alstom proceedings auger new-found harmony among enforcement jurisdictions.⁶ They join a series of recent cases concerning corruption and post-award control that merit reflection.

National authorities, in particular in the United States, are intensifying their focus on international corruption, and guidance on this matter in the arbitral setting is to be welcomed. Among the specific issues considered in the present article are the arbitrability of allegations of fraud or corruption, the relevance of evidence of corruption ‘downstream’ from a contract (as distinct from contracts procured by corruption or for corrupt purposes), and the legal effects (if any) on third parties of internal compliance regimes that enterprises adopt in response to national regulatory and enforcement actions in respect of corruption. The English and French cases demonstrate a judicial approach towards corruption that, notwithstanding the different approaches courts in common law and civil law systems take to precedent, may have implications for parties and for arbitrators in future cases, as well as for counsel seeking to assure the resilience of a future arbitral award at the recognition and enforcement phase.

II. SCRUTINISING FOR CORRUPTION: RECENT FRENCH ANNULMENTS

A. Alexander Brothers v Alstom (Cour d'appel de Paris)

A question of possible corruption arose when Alstom refused to settle invoices from Alexander Brothers for services rendered under consulting contracts. Alstom argued that Alexander Brothers had engaged in corrupt practices when carrying out activities ostensibly in performance of the consulting contracts and that to settle outstanding sums owed to the consultants under those contracts would have been to further a corrupt purpose. Alstom's sensitivities to such concerns were likely heightened by the $772 million penalty it had recently paid in the United States for offences under the Foreign Corrupt Practices Act (FCPA) and its £16.4 million penalty in the UK following a conviction for bribery.⁷ The unpaid invoices from Alexander Brothers were for €2,975,480.⁸

In December 2013, Alexander Brothers requested arbitration in respect of the unpaid invoices.⁹ Arbitration proceeded in Geneva under International Chamber of Commerce (ICC) rules, and the tribunal awarded Alexander Brothers €1.55 million.¹⁰ On 30 March 2016, Alexander Brothers obtained an exequatur from the Tribunal de Grand Instance (as it then was) in Paris; Alstom took the matter to the Cour d'appel.¹¹ At the Cour d'appel, Alstom alleged that the award creditor had engaged in corrupt acts when it pursued business on its behalf in China and that giving effect to the award would therefore violate international public policy, as understood in France.¹²

Alstom also argued that paying the consultants would place the company in renewed jeopardy with regulators and enforcement agencies. In support of this argument, Alstom argued that Alexander Brothers’ conduct did not accord with Alstom's internal ethics and compliance program. According to Alstom, the consultants had failed to supply supporting documents called for under that program to demonstrate that their activities had been proper. Alstom said that the program existed to serve the public interest in preventing international corruption, and so a failure to adhere to its procedures was not just an internal corporate matter, or a matter between the company and one of its vendors, but was also a matter of public concern: failing to adhere to the company's compliance program constituted, Alstom said, a distinct breach of international public policy.¹³

Alstom established to the satisfaction of the Cour d'appel that there were ‘serious, precise, and consistent indicators’ that sums which it had already paid to the consultants ‘financed and remunerated corrupt activities of public officials’¹⁴ and that it would therefore be inconsistent with international public policy to enforce the award which would result in Alstom paying further sums to the consultants. The Cour d'appel by a judgment of 28 May 2019 annulled the award and ordered Alexander Brothers to pay restitution to Alstom.¹⁵ Importantly, when reaching its judgment, the Cour d'appel did not find that the contracts between Alstom and Alexander Brothers had been procured by fraud or corruption or that there was an intention that either party would engage in fraud or corruption, a point to which we will return.

In the two years following Alexander Brothers v Alstom, the Cour d'appel considered other high-profile annulment cases, including Sorelec v Libya ¹⁶ and Webcor v Gabon ¹⁷which merit particular note.

B. Sorelec v Libya

Applying the 2004 France–Libya BIT, an ICC tribunal in Sorelec v Libya awarded the claimant $452 million in an interconnected Partial Award and Final Award.¹⁸ Libya resisted enforcement, inter alia, on grounds that a contract between the State and the claimant (to build schools in Libya) was ‘obtained by unlawful means which make its execution through the [arbitral award] contrary to international public order’.¹⁹ The Cour d'appel in a judgment dated 17 November 2020 annulled the award.

In reaching its decision to annul, the Cour d'appel recalled the proper role of a court under French law in the post-award phase. According to the Cour d'appel,

[w]here it is claimed that an award gives effect to an agreement of the parties tainted with corruption, it is up to the annulment judge, seized of an appeal based on Article 1520, 5⁰ of the [French] Code of Civil Procedure, to seek in law and in fact all the elements making it possible to rule on the alleged illegality of this agreement and to assess if the recognition or enforcement of the award manifestly, effectively and concretely violates international public order.²⁰

Libya claimed that the contract was tainted by corruption—ie that the ‘illegality of th[e] agreement’ deprived the arbitral proceedings of a legal basis. Libya's claim thus addressed the contract directly. This may be contrasted with Alstom's claim in the Alexander Brothers annulment proceedings where the award debtor argued that it was the conduct of the other contracting party that was corrupt. The claims in the two cases concerned different stages in the parties’ relationship: Libya's claim concerned conduct in the course of the process leading to a contract; Alstom's claim concerned subsequent conduct. Moreover, Libya's claim concerned a corrupt transaction between the parties (or between the investor and particular agents or organs of the State) whereas Alstom's claim was that the other party, Alexander Brothers, had been, in effect, on a corrupt frolic of its own.

It was not until the French court proceedings that Libya first raised the matter of international public policy. This did not dissuade the Cour d'appel from considering the plea or from annulling the award.²¹ The Court considered the facts in detail.²² Then, speaking as it did in Alstom of ‘serious, precise and consistent indicators’, the Court concluded that Sorelec had obtained the contract from Libya by illicit means and annulled the award on this basis.²³

C. Webcor v Gabon

The Cour d'appel, on 25 May 2021, in Webcor v Gabon again annulled an award in which the parties’ underlying transaction was tainted by corruption. In reaching the decision to annul, the Court, as would be expected, was mindful of the limits of its role. The Court recalled that

it does not fall within [its] mission … to ascertain whether the facts of corruption are established and/or to find that a given person be guilty of a criminal offence under a national legal system, but only to ascertain whether the recognition or enforcement of the award would violate the objective of combatting corruption in that the [monies to be paid under] the award … would have the effect of financing or remunerating a corrupt activity.²⁴

This limitation did not prevent the Court from considering factual elements ‘which the arbitral tribunal was not aware of at the time of the award’.²⁵ It emerged that the mayor of Libreville, Gabon had gone on a honeymoon paid for by Webcor at a point in time when the mayor was still deciding whether to award Webcor the contract to build facilities for a new market in the city.²⁶ The fact that Webcor had paid for the mayor's honeymoon had been concealed.²⁷ The Cour d'appel annulled the award in light of this new information.

The corruption that came to light in Webcor v Gabon, as in Sorelec v Libya, directly affected the process by which the parties had concluded the contract. However, in its reasoning, quoted above, the Cour d'appel in Webcor suggested that the term ‘corruption’ also embraces the situation in which a payment agreed under a contract ‘would have the effect of financing or remunerating a corrupt activity’. In saying this, the Court went further than it needed to. The phrase ‘hav[ing] the effect’ in this setting potentially includes activities of one of the contracting parties, carried out independently of the other party after the conclusion of the contract and not envisaged by the contract. The phrase ‘hav[ing] the effect’ captures downstream, unilateral conduct, and introduces a degree of uncertainty into the parties’ relations. It enlarges the definition of ‘corruption’ for the purposes of the public policy exception to recognition and enforcement, and it adds uncertainty to its scope, in much the same way as the Cour d'appel in Alstom had already done.

In each of these judgments, the French courts referred to an ‘international consensus’ definition of ‘corruption’ that they said is reflected in the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions²⁸ and the 2003 UN Convention against Corruption.²⁹ They said as follows:

According to the international consensus expressed by these texts, corruption of a public official, whether national or foreign, consists in offering the official, directly or indirectly, an undue advantage, for himself or for another person or entity, for the purpose [of getting him to] perform or refrain from performing an act in the exercise of his official functions, with a view to obtaining or maintaining a contract or other undue advantage, in connection with international commercial activities.³⁰

Corruption comprising a conferral of direct advantage on the public official is a relatively straightforward example. Where the alleged advantage is conferred indirectly, a question of scope arises. The Cour d'appel in Webcor v Gabon suggested a capacious understanding of ‘indirect advantage’, the Court having indicated that the definition of corruption includes acts (or omissions) that ‘would have the effect of financing or remunerating a corrupt activity’. In the ‘international consensus’ definition, ‘indirectly’ must be subject to some limits, but the Cour d'appel did not appear to adopt very narrow limits. Scrutinising a transaction for indicia of corruption under the Court's formulation would be a potentially far-reaching task.

III. A COURSE ADJUSTMENT ON CORRUPTION CLAIMS? OR A JUDICIAL SIGNAL TO ARBITRATORS?

On 7 September 2021, in GVC v Guinea and ARPT the Cour d'appel rejected a request for annulment, suggesting that the line of corruption-related annulment decisions might now be tapering off.³¹

An ICC arbitral tribunal had awarded GVC, a Seychelles telecommunications company, $21 million for failure by Guinea's telecommunications regulator to pay invoices for overseas telephone services.³² Guinea and the regulator, ARPT, sought to annul the award. Invoking the French standard of ‘serious, precise and consistent indicators of corruption’, the award debtors claimed that a variety of corrupt acts impugned the business relationship between ARPT and GVC.³³ Before the Cour d'appel, Guinea and ARPT alleged for the first time that one of GVC's principals had orchestrated fraudulent and concealed transactions with another company in order to siphon off earnings.³⁴

The Cour d'appel found none of Guinea and ARPT's allegations convincing. The Court recalled that the French conception of international public policy forbids bribery of a foreign public official³⁵ but emphasised the limited function of the Court in the post-award phase:

The judge of annulment is not … the judge of the contract … [The] control [function] aims only to ensure that the recognition or enforcement of the award does not result in a manifest, effective and concrete violation of international public order.³⁶

The Court observed that there is no presumption that an ‘unbalanced’ contract (ie a contract that arguably favours one party over the other) is the result of corruption.³⁷ The existence of a ‘general climate of corruption’ in a country does not prove that a particular transaction was corrupt.³⁸ Newspaper reports that the claimant engaged in corrupt activities in other countries were not relevant to the case.³⁹ The Cour d'appel noted that Guinea and ARPT had not contested the legality of the contract with GVC during the arbitral proceedings.⁴⁰

It was of central importance to the reasoning of the Cour d'appel that the arbitrators had not ignored evidence of corruption that Guinea and ARPT had presented in the arbitral proceedings. To the contrary, the arbitrators had carefully considered evidence concerning the corruption ‘indicators’ relevant to international public policy (as understood in French law) but found the respondents’ evidence on each lacking.⁴¹ The Cour d'appel drew specific attention to sections of the award in which the tribunal had considered particular claims of corruption,⁴² observing that it was ‘rightly incumbent’ on the arbitral tribunal to perform this analysis.⁴³ In short, making new factual allegations to try to resuscitate a corruption plea that had failed in arbitration is unlikely to prevail in court without some serious indication as to why those allegations had not been made in front of the arbitrators.

Where an arbitral tribunal fails to give appropriate care and attention to serious evidence of corruption, the tribunal leaves a control instance, such as the Cour d'appel, no adequate record on which to recognise and enforce. A tribunal taking a cavalier approach to corruption, indeed, might open its award to challenge. In this respect, GVC v Guinea and ARPT sends a judicial signal⁴⁴ to arbitrators: if a party pleads corruption seriously, then arbitrators should take that pleading seriously. It is also a signal to parties: if a party has credible evidence of corruption or fraud, then the party should bring the evidence forward during the arbitration.

It is true that arbitrators and parties alike would err if they were to consider these French judgments as binding precedent. As judgments of a civil law court not operating under the principle of stare decisis, they are not binding in future cases as judgments of a common law court would be. Nevertheless, civil law courts operate under the doctrine of jurisprudence constante and treat a consistent line of decisions as persuasive,⁴⁵ and civil law judges are well-aware of the signalling potential of their judgments.⁴⁶ Moreover, the Paris Cour d'appel occupies an important place in the constellation of national jurisdictions in which award creditors seek recognition and enforcement, not least because of the many arbitrations conducted under the rules of the Paris-based ICC.

English courts are sending similar signals to those discernible in the French judgments. First, in Alexander Brothers, the High Court, in rejecting Alstom's request to refuse enforcement, noted that Alstom had had the chance to argue before the arbitrators that bribery impugned the contract, but it had not done so:

Alstom had in its mind, and had the materials for, a bribery case which therefore prima facie could and should have been brought before [the ICC] Tribunal. There is no explanation for why this was not done. The allegation which is sought to be made is a serious one which engages concerns about corruption, and perhaps more so now than would have been the case in the early years of this century; but it is still not an allegation of the most serious type within that umbrella or one where one can point to a consensus that such contracts should fail. Nor is it a case where the evidence now relied on is particularly strong; indeed the case advanced remains entirely unspecific and based on suspicions and inferences.⁴⁷

It was important here that there was ‘no explanation for why’ the party alleging before the Court that corruption had vitiated the contract had not made this allegation before the arbitrators. As the High Court saw it, this case was not one in which the evidence of corruption had been withheld or concealed from the arbitrators for reasons beyond the party's control; Alstom simply had failed to introduce that evidence in the arbitral proceedings.

Indeed, the Court of Appeal in Republic of Mozambique v Privinvest, another case involving allegations of corruption, reminded litigants that such allegations are not beyond the ken of arbitrators.⁴⁸ In that case, Mozambique had established a series of special purpose vehicles (SPVs) which entered into supply contracts with Privinvest and other companies (the ‘Privinvest companies’) for the construction of ships and related infrastructure in support of policing and development of fisheries in Mozambique's Exclusive Economic Zone (EEZ). The supply contracts contained ICC and SCAI⁴⁹ arbitration clauses. The SPVs borrowed large sums from Credit Suisse and other financial institutions in connection with the fisheries project which were guaranteed by Mozambique.⁵⁰ The guarantees contained an exclusive jurisdiction clause in favour of the English courts.⁵¹

Mozambique brought proceedings in the English courts against, inter alia, the Privinvest companies, alleging that the guarantees were the fruit of bribery. The Privinvest companies, invoking Section 9 of the Arbitration Act 1996 (UK), sought to stay court proceedings in favour of arbitration.⁵² Mr Justice Waksman, for the Commercial Court, declined to stay.⁵³ The judge reasoned that the allegations of bribery and other corrupt acts concerned the guarantees and not the supply contracts, and since it was only the latter that contained arbitration clauses, Mozambique's claims could be heard by the English courts, where Mozambique indeed had brought them.⁵⁴

The Privinvest companies appealed, and, on appeal, it was determined that Mozambique's claims fell within the scope of the arbitration clauses.⁵⁵ Lady Justice Carr DBE, for the Court of Appeal, reasoned as follows:

[I]t is to take too artificial an approach to isolate the Guarantees from the Supply Contracts which they supported. The substance of the dispute relates to a single fraudulent scheme involving all three transactions, namely the Supply Contracts, the Facility Agreements [ie the loan arrangements] and the Guarantees. The conspiracy claim is a matter sufficiently connected to the Arbitration Agreements to fall within [their] scope.⁵⁶

Nobody in the proceedings seems to have suggested that any general consideration of public policy might prevent arbitrators from addressing allegations of fraud or corruption.⁵⁷ This comes as no surprise, for the High Court some years before had held that such allegations are, in principle, arbitrable.⁵⁸

The Court of Appeal in applying Section 9 of the Arbitration Act 1996 in Mozambique v Privinvest suggests, even if soto voce, that arbitrators are not to ignore plausible allegations of fraud and corruption, including where such allegations affect closely-related transactions between the parties comprising a single matter: formal separation between an arbitral clause and the alleged fraud or corruption does not necessarily remove the matter from the scope of arbitral jurisdiction.

As in the Alstom case, the proceedings in Mozambique v Privinvest took place against the backdrop of US enforcement proceedings.⁵⁹ Unlike in Alstom, the allegations of fraud and corruption in Mozambique v Privinvest concerned the conclusion of particular instruments between the parties, not the conduct of one party downstream.

Taken together with the recent French cases, a message emerges: parties with credible evidence that corruption has tainted a commercial relationship should present the evidence to the arbitrators; and the arbitrators should consider the evidence with due care. The Paris Cour d'appel in GVC v Guinea and ARPT suggests that arbitrators who produce a reliable, nuanced, and appropriately detailed record concerning serious allegations of corruption serve both the parties to the dispute and public policy at large. Mozambique v Privinvest recalls that there are no considerations of principle that prevent arbitrators from addressing credible allegations of corruption or fraud and suggests that English courts will be open to holistic interpretations of closely-connected legal instruments.

IV. AMPLIFYING THE SIGNAL TO ARBITRATORS

A few weeks after the Cour d'appel gave its judgment refusing annulment in GVC v Guinea and ARPT, the Cour de Cassation reversed the annulment that the Cour d'appel had granted in Alexander Brothers v Alstom.⁶⁰ An important element in the reasoning of the Cour de Cassation was that Alstom had not alleged that the consulting contracts with Alexander Brothers were obtained by corrupt means or that the contracts had an illicit purpose. On the evidence, the parties had not intended that the consultants commit acts of corruption or ‘exercise some other form of undue influence on potential clients to obtain the contracts’.⁶¹

As had the Cour d'appel in GVC v Guinea and ARPT, the Cour de Cassation in Alexander Brothers v Alstom thought it of central importance that the arbitrators had given due care and attention to the allegations of corruption raised in the arbitral proceedings. The Cour de Cassation noted that Alstom had expressed its concern to the arbitrators that ‘the Plaintiffs may have resorted to corrupt practices in the framework of the execution of the consultant contracts and that they may therefore be exposed to criminal proceedings’ if they paid the consultants. The Court further noted that the arbitrators had addressed Alstom's argument that Chinese public officers would have interpreted Alstom's payment of the consulting fees as corrupt remuneration. The Court drew specific attention to the paragraphs of the arbitral award in which the arbitrators had addressed these matters (paras 261–263 of the award), and set out further passages of the award in extenso in which the tribunal had considered the evidence that Alstom had adduced. Notably, Alstom had not ‘argued during [the] arbitration that the three consultant contracts had been obtained through corruption’.⁶² The Cour de Cassation concluded that the Cour d'appel had erred by having conducted a new inquiry into the merits of a matter that the arbitrators already had properly addressed and, in doing so, had effectively revised the award, an operation that the courts are not empowered to perform.

The judgment of the Cour de Cassation would appear to clarify, to a degree, the scope of the definition of ‘corruption’ for purposes of international public policy in post-award proceedings in France. As noted above, in Webcor v Gabon the Cour d'appel might seem to have suggested that activities downstream from a contract, done by one party alone and without the other's direct involvement, might constitute fraud or corruption capable of leading to the voiding of an arbitral award.⁶³ The Cour de Cassation in Alexander Brothers did not go that far. Allegations that a party has been engaged in fraud or corruption did not vitiate the arbitral agreement or resultant award, where the alleged misconduct did not influence the formation of the contract and no fraud or corruption was envisaged under the terms of the contract.⁶⁴

Two situations remain in which corruption could undermine an award: (i) corruption integral to obtaining the contract (eg if an official had been bribed to obtain the official's assent to terms); and/or (ii) the contract engaged a party to carry out corrupt acts (eg if a company seeking government contracts paid a consultant to bribe an official). The parenthetical examples are not the only ones that might constitute corruption vitiating an award. Nor do the two general categories necessarily encompass all circumstances in which corruption might have such effect. These categories do, however, reflect the majority of circumstances which arbitrators might be called on to consider. Notwithstanding high profile differences in post-award judgments in recent years, a degree of convergence is visible here between French and English courts. Both judicial systems recognise that arbitrators are well-equipped to consider and decide allegations of fraud and corruption, and both seem now to signal that arbitrators, subject of course to the proper limits of their jurisdiction, should not hesitate to do so when a party brings forward credible evidence that such misconduct might have undermined a transaction.

V. OPEN QUESTIONS AND LESSONS LEARNED

The Cour de Cassation in Alexander Brothers v Alstom may be seen as having narrowed the range of situations in which an award debtor might credibly challenge an award on grounds of corruption: merely ‘resort[ing] to corrupt practices in the framework of the execution’ of a contract will not necessarily impugn the contract or an arbitral award. However, such downstream or ancillary activities by one contracting party might yet be relevant. For example, a court might consider such activities if they provide evidence of fraud or corruption which undermines the contract itself. Whilst illicit conduct at some remove from the contractual terms would not on its own vitiate the contract, it might provide evidence of other defects that do.

As the Cour de Cassation suggested in Alexander Brothers, evidence of corruption seldom consists of a proverbial smoking gun (‘caractère occulte des faits de corruption’). When corruption does come to light, this more often is through indirect signs from which the decision-maker infers misconduct. Exorbitant consulting fees, for example, raised the arbitrators’ suspicion in an ICSID claim against Uzbekistan under the Israel–Uzbekistan BIT; the tribunal held that the claimant's putative investment failed to meet the legality requirement under the BIT and, thus, the tribunal had no jurisdiction to consider the merits of the claim.⁶⁵

A cautionary word, however, is in order. ‘Whilst it can be relatively easy to allege corruption, it is less easy to prove it … Suspicion is not equivalent to proof.’⁶⁶ The process of inference must remain tethered to the facts. To arrive at a reliable finding of fact, arbitrators will consider the specific evidence placed before them in the setting from which the parties have gathered it.⁶⁷ Evidence concerning downstream conduct such as that in Alexander Brothers, which is even less direct than unexplained consulting fees, might be probative, but the fact-finder would need to exercise all due care before declaring a transaction invalid on the basis of such evidence.

Another open question is the degree to which, if at all, arbitrators should consider the observance (or non-observance) of internal compliance operations as evidence of the validity (or invalidity) of a contract. As noted above, Alstom pleaded that Alexander Brothers had not observed Alstom's compliance rules and asked that this be taken as evidence of a corrupt purpose vitiating the consulting contracts. In other cases, too, including Mozambique v Privinvest, allegations of fraud arise against the backdrop of national enforcement actions which have led companies to create elaborate compliance machinery. FCPA actions in the United States, in particular, have resulted in very large financial penalties for companies,⁶⁸ and those companies, in turn, have expended considerable sums on internal compliance.⁶⁹ Yet it might be asked on what parties, and in what circumstances, are internal compliance procedures to have legal effects.⁷⁰

Policymakers who have promoted international rules against corruption, such as those found in the OECD and UN Conventions, wish private businesses to institute internal compliance mechanisms in order to ensure both that their employees refrain from bribery and other corrupt acts and that those with whom they transact refrain from such acts as well. However, commercial actors are neither legally empowered nor functionally equipped to police a partner, co-venturer, or consultant in its downstream activities, at least past a point. Future cases might well test how far, precisely, the legal duties of the commercial actor extend in this regard and to what extent the observance of a company's internal compliance procedures by another party may serve as evidence if that party is called to answer an allegation of corruption. The English High Court in Alexander Brothers, for one, was not convinced that ‘mere non-compliance with contractual rules aimed at preventing corruption would by itself give rise to a public policy ground to refuse enforcement’.⁷¹ Perhaps this, too, is a signal (though if it be one, only rather muted) that courts will not necessarily treat compliance regimes created by particular enterprises to address their particular regulatory risks as having legal effects more generally, ie on other parties and in other processes.

Another question still to be answered is how to tell the difference between situations in which a party could have brought forward evidence of corruption but failed to do so, and situations in which such evidence was concealed. An important consideration in Alexander Brothers was that the arbitrators had heard and considered the evidence of corruption and, in Webcor v Gabon, it was equally important that evidence of corruption ‘which the arbitral tribunal [had not been] aware of at the time of the award’ only later came to light.⁷² Situations where it is shown that a party concealed evidence arguably involve a fraud against the arbitral process. This means that a party challenging an award in such situations might consider running an international public policy argument with reference to that defect, distinct from any argument that corruption vitiated a contract directly.⁷³ Courts, including those of England and Wales, have interpreted national arbitration statutes to include perjury or fraud in the arbitral proceedings as a possible grounds for invoking the public policy exception.⁷⁴ The former situation—ie where the party could have brought the evidence forward but failed to do so—is less promising for the party challenging an award, given the expectation that arbitral proceedings are final.

A lesson from Alexander Brothers and the other recent cases considered in this article is that a strategy that aims during arbitration to prevent an adversary from airing plausible claims about corruption might backfire. Both the Cour de Cassation and the Cour d'appel in cases in which a party has pleaded that corruption has vitiated an award have placed considerable weight on the care and attention that the arbitrators gave to the corruption claims. Where awards were annulled, relevant evidence of corruption had not been properly ventilated during the course of the arbitration. This is not necessarily to suggest that the arbitrators were at fault: the national courts continue to have a backstop function concerning serious violations of international public policy and that function may include the review of evidence that did not come to light during the arbitral proceedings. English judges, at least as a matter of principle, are much in accord with their French counterparts in this regard:

Perhaps the majority of cases brought under … section [103 of the Arbitration Act 1996(UK)] concern allegations that the award has been obtained by fraud, or perjury. In such cases it is well established that the Court will not refuse enforcement unless … [t]he evidence was not available or reasonably obtainable, either: (i) at the time of the hearing of the arbitration; or (ii) at such time as would have enabled the party concerned to have adduced it in the court of supervisory jurisdiction to support an application to reverse the tribunal's award if such procedure were available.⁷⁵

The presumption remains, however, that awards are to be enforced.⁷⁶ These cases offer further guidance to parties in post-award proceedings: if they are to challenge an award in court successfully, not only do they need to show that they did not have the chance to raise pleas of fraud or corruption during the arbitral process; they also need to show that ‘the award has been obtained’ on the basis of the alleged misconduct.

Finally, these cases suggest that, where there are plausible claims that corruption or fraud has invalidated a transaction, parties should take care to choose arbitrators who will take their fact-finding function in relation to those claims seriously. The recent French decisions might suggest that the national courts are backing away from considering claims of corruption by parties attempting to prevent recognition and enforcement of awards. The better view, however, is that the French courts are not resiling, but are, instead, taking a close look at how arbitrators handle such claims. Where arbitrators have produced a careful, well-reasoned, and thorough record, properly mindful of the indicators of corruption, the courts have found no basis to annul the award.