Corruption in Arbitration

Corruption and integrity of arbitral tribunals is a delicate matter that is usually avoided. The fact that arbitration is concerned with mediation between two warring parties will be naïve to insist that it is insulated against corruption.

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Corruption and integrity of arbitral tribunals is a delicate matter that is usually avoided. The fact that arbitration is concerned with mediation between two warring parties will be naïve to insist that it is insulated against corruption. An arbitrator is usually considered beyond reproach in the era of justice between parties. However, the reality is that the frailty of the human flesh means that arbitrators are subject to temptations. The abounding of temptations implies that it is not legally and ethically safe to trust that the arbitrators will be beyond reproach.1 In Kenya, corruption is entrenched in society, and sadly, it has found its way in arbitral tribunals, a place where the public has put their trust to safeguard access to justice.

Arbitral proceedings are consensual; as a result, corruption allegation may arise from any side. Arbitrators lack clarity on how to respond to such allegations when pleaded by parties to a dispute. Corruption cases are challenging to prove, partly because of the limits on a tribunal’s powers of investigation and compulsion, but also because allegations of corruption raise issues regarding the burden of proof.2 Corrupt activities are cleverly carried out, and this may lead to a push to lower the burden of proof. On the other hand, the seriousness of the allegations means that the burden of proof should be higher. It has been debatable to what extent the tribunal should further probe corruption allegations raised.

Integrity and Independence of Arbitral Tribunals

Bribery allegations levelled against arbitrators abound, but it interesting how many of them never see the light of day. Corruption allegations have been raised over esteemed arbitrators held in high regard, and this raises fear against young arbitrators who haven’t gained much from their practice as arbitrators. The party with the most reach and resources is highly likely to be successful in compromising an arbitrator. Arbitrator’s duty to act independently is what endears most parties to arbitral tribunals on the belief that arbitrators are only influenced by facts and laws related to the case.3 The integrity and ethics of an arbitrator are critical such that high ethical standards, professionalism and competence are qualities expected of them. The lack of or perceived lack of such qualities may lead parties to lose faith in the process. To prevent it, professional bodies have invested in the training and development of arbitrators.

The growth of arbitration as the preferred method of solving commercial disputes has raised ethical concerns on the integrity of the process. The ethical concerns touch not only on the arbitrators but also on the parties’ conduct and parties of interest. For a just and fair decision, the players involved are crucial to ensuring justice is served. Arbitral proceedings are expected to go smoothly without external influence. However, it is highly likely that interested parties or one of the parties may seek to gain undue advantage through other overt methods.4 As such, it results in corruption and affects public policy.

Arbitral Corruption and the Constitution of Kenya

As a form of ADR, arbitration is anchored in the Kenyan 2010 Constitution. It is allowed by the Constitution for parties to seek alternative forms of dispute resolution in their quest for justice. To that end, the Arbitration Act, Chapter 49, clearly illustrates how parties should resolve their disputes through arbitration. In the use of ADR, parties are not exempted from the Constitution. Article 10 of the Constitution provides the values and principles that bind all persons, including arbitrators.5 Moreover, it directs that all persons performing any duty under any law observe the rule of law, integrity and transparency.6 This means that arbitrators, in the execution of their duties, are to observe the rule of law, be transparent and independent. Also, Chapter 6 of the Constitution outlines the requirement of leadership and integrity. Although they refer to state officers, arbitrators ought to abide by it. Arbitrators should consider that they determine matters in the public interest and, as such, should be in good standing. Arbitrators should abide by all the relevant laws, including the Arbitration Act that governs the performance of their duties.

Reporting Avenues for Arbitral Corruption

The Anti-Corruption and Economic Crimes Act criminalizes corruption and gives ways of investigation and reporting corruption. The Ethics and Anti-Corruption Commission Act establishes the Ethics and Anti-Corruption Commission (EACC), mandated with tackling corruption cases in the country. This makes EACC one of the avenues to report arbitral corruption.

The Chartered Institute of Arbitrators, Kenya, has rules directed at curbing corruption and other disciplinary issues facing arbitrators.7 The rules establish the Professional Conduct Committee, and it’s mandated to investigate, discipline, suspend or expel a member of the institute. The downside is that the rules do not give a step-by-step basis for reporting alleged corruption cases.

The Arbitral tribunal is another avenue for reporting. Parties can before the arbitrators raise issues on the partiality of the arbitrators, and the arbitrators are mandated to disclose any matters that may affect their impartiality or independence.8 Parties are also allowed to raised issues of the impartiality and independence of an arbitrator before the tribunal. In raising such issues, an arbitrator may excuse themselves or refuse, and the party is allowed to move to the High Court.9 The court may then determine if there are any justifiable reasons for the withdrawal of the arbitrator. The downside is that there are no repercussions if the court finds evidence of impartiality of independence.

Section 35(1)(2) of the Arbitration Act allows the High Court to set aside arbitral awards. Most importantly, the Act provides that the award may be set aside if there is evidence of fraud, bribery, undue influence, or corruption in awarding the decision.10 It also provides the setting aside if the award contradicts the public policy of Kenya.11 The High Court provides an avenue to which a party may challenge an award on the ground of corruption, but it does provide for the unishment of the arbitrator if found guilty.

The Response by an Arbitrator on Corruption Allegations

What should arbitrators do when face with corruption allegations? There are many responses, but Sayed (2004) presents two primary responses to corruption in arbitration.

The repressive attitude is the first, which goes along with the thought that objective moral values can be arrived at by an arbitrator.12 The centre of the response is a conflict between the positive and natural law. The arbitrator is allowed to discard the application of human (positive) laws if they contradict the moral ideals of the parties (Natural Law). The point is that the arbitrator should find refuge in public policy as the platform for a repressive attitude towards corruption. The assumption made in the repressive attitude is that the arbitrator operates in a morally relative environment and has a special bias to apply the community’s moral values. 13To this end, the moral argument made here is that the arbitrator is bound to repress and suppress corruption in arbitration.

The Indifferent tendency is the second response option for the arbitrator suggested by Sayed (2004). The arbitrator’s concern is that the proceedings must maintain autonomy as one of the pillars of arbitration. The argument is that they should exhibit disinterest in questioning the validity of the contract by any party, which is why they are appointed to arbitrate.15 To this end, the arbitrator is not bound by any moral requirement and is not the moral police for the parties and should be indifferent to these allegations.


Corruption has affected all societies from the past, and arbitration is not insulated from corruption. Arbitrators should be aware that claims of corruption can be levelled against them. Their professionalism in conducting proceedings may determine whether they are beyond reproach or not. Issues of corruption may be troublesome for the arbitrator, especially with definitional difficulties of corruption. The nature of allegations made in the arbitration is either that the agreement was made out of corruption or that the arbitrator is corrupt, or that the dispute arose out of corrupt practice by one of the parties.17 This means that the arbitrator has to determine a number of things, including if they have the jurisdiction to determine the matter. Such issues may delay the case before the tribunal. The arbitrator must also be aware when one of the parties or an external influence is trying to use such allegations to gain undue advantage or delay the case. Arbitrators must be bold and courageous to decline any invitation to oversee corrupt laden cases. Corruption allegations may taint the image of an arbitrator, and as such, seriousness must be taken to resolve such matters quickly. Corruption presents a major threat to arbitration in Kenya. The avenues for tackling arbitral corruption are few and fail to provide a comprehensive mechanism for the punishment of corrupt arbitrators. Professional bodies governing arbitrators should ensure proper training of ADR practitioners on the expected standards and ethical behaviour. Proper guidelines are needed for reporting and investigation of these cases. All parties and stakeholders should be sensitized on the effect of corruption of arbitration, or else arbitration would lose its appeal as the preferred dispute resolution mechanism.

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