The risk of abuse of arbitration proceedings in jurisdictions where corruption is pervasive

Abstract

This paper examines the intersection of international arbitration and money laundering and corruption in jurisdictions where corruption is endemic, such as some Eastern European countries, to provide insight into the challenges and risks involved in arbitrating. Few sources have addressed the issue of money laundering and corruption in international arbitration in these jurisdictions. Given this significant research gap, the aim of this paper is to draw attention to areas where investment and international trade relations may be undermined by criminal activity. To this end, the specific methods used by money launderers were explored through a qualitative study involving ten suspected money launderers and eighteen prevention experts. The findings were then tested quantitatively. The results show that, as the number of corruption allegations in arbitration has increased, arbitrators have assumed an important role in reviewing compliance rules related to corruption. As a result, this article seeks to improve current understanding of compliance issues in arbitration in countries where corruption is prevalent and thereby identify a path for future research.

Keywords

• Arbitration
• Corruption
• Money laundering
• Eastern Europe