Law Commons^™

Arbitrating Corruption, Rachel Brewster

Faculty Scholarship

One of the most controversial issues in international investment law is how arbitral panels should deal with investments tainted by corruption at their inception. The current practice of investment arbitrators is to refuse to hear investors’ claims when bribery allegations are substantiated. A recent wave of scholarship has attacked this “corruption defense,” arguing that the practice unfairly harms investors and encourages governments to maintain corrupt practices. This Essay responds to that scholarship, arguing that the current approach is the best policy choice on balance. The Essay analyzes three core policy questions at the heart of the debate: Would eliminating the …