State Responsibility and Corruption in the Context of Investor-State Disputes

ICSID Review, Vol. 37, No. 1-2 (2022), pp.
272–288
doi: https://doi.org/10.1093/icsidreview/siab050
Published Advance Access 23 March 2022 WINTER/SPRING 2022
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20TH ANNIVERSARY OF ARSIWA
State Responsibility and Corruption in the
Context of Investor-State Disputes
Natalie L Reid1 and Romain Zamour2
I. INTRODUCTION
The question of State responsibility for corruption in the context of investor-State
disputes has been little examined by tribunals.3 This gap in the jurisprudence may
simply reflect the procedural context in which corruption allegations have generally
arisen: rarely as allegations by the investor to ground its claims, and instead most
often as an objection by the State to the jurisdiction of the tribunal or the admissibility
of the investor’s claims. In this posture, corruption is presented as a threshold issue,
as the respondent argues that the tribunal should dismiss all the investor’s claims
without considering their merits.
On one view, therefore, the comparative lack of attention to State responsibility
in this context is unremarkable. If corruption is typically raised as a defence under
special rules governing the admissibility of claims in the context of investor-State arbi-
tration, how relevant are concepts of general State responsibility, or the International
Law Commission’s Articles on the Responsibility of States for Internationally Wrong-
ful Acts (‘ILC Articles’)? While Part One of the ILC Articles does cover ‘general
questions surrounding breach of an international obligation contained in an invest-
ment treaty’,4 that is not the guise in which corruption typically appears in these
cases; rather, the allegation of corruption often serves as a defence to a separate
alleged breach (or several separate breaches).
1
Partner, Debevoise & Plimpton LLP’s International Dispute Resolution Group, New York, United States.
Email: nlreid@debevoise.com.
2
Senior Associate, Debevoise & Plimpton LLP’s International Dispute Resolution Group, New York, United States.
Email: rzamour@debevoise.com. The authors would like to thank their colleagues Moeun Cha, Gabriel Silva and Xiaox-
iao Zhou for their assistance, and Dr Aloysius (Louie) Llamzon for sharing his thoughts on the topic. The authors also
owe a debt of gratitude to the late Judge James Richard Crawford, who did so much to conceptualize and develop the
field of State responsibility. The views expressed in this note are the authors’ alone, and do not represent the views of
their firm or of any of its clients.
3
See Aloysius P Llamzon, ‘State Responsibility for Corruption: A Return to Regular Order’ (2021) EYIEL 1, 4
(‘[O]ne aspect of corruption that continues to be undertheorized and largely undiscussed in the case law is that of State
responsibility for corruption’).
4
James Crawford, ‘Investment Arbitration and the ILC Articles on State Responsibility’ (2010) 25(1) ICSID Rev—
FILJ 127, 129 (‘[Part One] is concerned with all breaches of international law by States… In the context of investment
treaty arbitration, this means that general questions surrounding breach of an international obligation contained in an
investment treaty is a matter in principle covered by Part One of the ILC Articles’).
© The Author(s) 2022. Published by Oxford University Press on behalf of ICSID. All rights reserved.
For permissions, please e-mail: journals.permissions@oup.com
State Responsibility and Corruption in Investor-State Disputes 273
But it is indeed worth studying the intersection of general concepts of State respon-
sibility and findings of corruption in investor-State disputes, for at least two reasons.
First, the question does arise in the (less common) cases where corruption is invoked
as an element of the claim. Second, and perhaps more importantly, rigorous analysis of
the thorny issues raised by corruption allegations in investor-State arbitration requires
consideration of first principles of responsibility, especially in light of the idiosyncrasy
of corruption among potential illegality defences. Corruption is bilateral, involving
parties on both sides of the eventual investment dispute. To understand its impact
on whether and how tribunals tackle the parties’ respective claims and defences, we
should consider the elephant in the room: the allegedly corrupt State official, without
whom the transaction would not have been completed, and through whom the State
is implicated.
In our brief consideration of these issues in this note, we proceed in two steps.
First, drawing on the work of Dr Aloysius Llamzon, a leading scholar on corruption in
investor-State disputes, the note discusses the limitations of the current treatment of
corruption in these cases from the perspective of State responsibility. It then considers
whether what he terms an ‘attribution asymmetry’, namely a systematic imbalance
in the treatment of corruption as between investors and States that could be creating
perverse incentives in the global anti-corruption regime, is better understood as an
‘accountability gap’. Second, the note considers whether general concepts of inter-
national law and State responsibility can both better capture and help address this
accountability gap. In particular, the note focuses on the concept of knowledge of the
corrupt act, a key but underexplored issue.
II. THE PROBLEM: ATTRIBUTION ASYMMETRY, OR

ACCOUNTABILITY GAP?
A. The Premise: The Corruption ‘Trump’ in Investor-State Arbitration
Corruption has emerged as a powerful defence for host States in investor-State
cases—both as a particular manifestation of the broader illegality defence5 and as
a more singular kind of ‘international public policy’ defence.6 If established, and
depending on the specific circumstances and legal framework,7 corruption has been
found sufficient to dismiss the entirety of an investor’s claims, as a matter of either
jurisdiction or admissibility.
Thus, in World Duty Free v Kenya, an ICSID tribunal dismissed contract claims
on grounds of corruption, which it concluded rendered the claims inadmissible as
a matter of international public policy.8 This was the first ICSID case dismissed
on the basis of corruption. In Metal-Tech v Uzbekistan, a tribunal dismissed treaty
claims, finding that corruption in the making of the investment deprived the tribunal
5
See generally Zachary Douglas, ‘The Plea of Illegality in Investment Treaty Arbitration’ (2014) 29(1) ICSID Rev—
FILJ 155.
6
See generally Pierre Lalive, ‘Transnational (or Truly International) Public Policy and International Arbitration’
(1986) ICCA Congress Series 3, 258.
7
See eg Aloysius P Llamzon, ‘Trading in Influence’ in Cecily Rose and others (eds), The United Nations Convention
Against Corruption: A Commentary (OSAIL 2019) 192–209 (highlighting the importance of considering the specific kind
of ‘corruption’ involved).
8
World Duty Free Company Limited v Republic of Kenya, ICSID Case No ARB/00/7, Award (4 October 2006) para
157 (inadmissibility finding on the basis of international public policy).
274 ICSID Review VOL. 37 1-2
of jurisdiction by operation of the legality clause in the Israel–Uzbekistan bilateral

investment treaty.9 This was the second ICSID case, and the first ICSID treaty case,
dismissed for corruption. Other cases have followed.10
Because in those cases corruption was treated as a threshold matter of jurisdic-
tion or admissibility, the tribunal dismissed the investor’s claims without considering
their merits. Early in the development of the illegality defence, a prominent arbitrator
emphasized this point and foresaw its importance. Fraport v Philippines (Fraport I) was
a foundational decision that significantly influenced the development of the illegality
defence by treating an ‘in accordance with the law’ treaty provision as a jurisdictional
requirement demanding compliance with the host State’s law.11 Bernardo Cremades
dissented, highlighting the significant impact of the choice to treat illegality as a
threshold issue:
If the legality of the Claimant’s conduct is a jurisdictional issue, and the legality of the
Respondent’s conduct a merits issue, then the Respondent Host State is placed in a powerful
situation. In the Biblical phrase, the Tribunal must first examine the speck in the eye of the
investor and defer, and maybe never address, a beam in the eye of the Host State.12
Thus, corruption became in the words of Dr Llamzon a ‘potential “trump” that

would effectively clear the host State not only of corruption but of all putative viola-
tions of the investment treaty’.13 While this imbalance in the treatment of illegality is
remarkable as a general matter, it is especially so in the context of corruption, which
by definition is bilateral and implicates both the investor and a corrupt State official.14
B. The ‘Attribution Asymmetry’ Explained

This has led Dr Llamzon to identify what he termed ‘the attribution asymmetry’:
[T]he degree to which corruption has been a truly bilateral undertaking is decisive: if corrup-
tion were only attempted through solicitation/extortion by the public official … corruption
would potentially engage the international responsibility of States. However, if a bribe was
consummated … the picture alters dramatically: investors would not be allowed any arbitral
recourse, as corruption participated in by its agents … would be attributable to the investor.
However, host States would not be subject to similar responsibility, as the corruption of their
public officials would not be attributable to them.15
9
Metal-Tech Ltd v Republic of Uzbekistan, ICSID Case No ARB/10/3, Award (4 October 2013) paras 372–73 (finding
of lack of jurisdiction, on the basis of express legality requirement in the bilateral investment treaty).
10
See eg Spentex Netherlands, BV v Republic of Uzbekistan, ICSID Case No ARB/13/26, Award (27 December 2016)
(unpublished).
11
Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Award
(16 August 2007) paras 339–45; see Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID
Case No ARB/03/25, Decision on the Application for Annulment of Fraport AG Frankfurt Airport Services Worldwide
(23 December 2010) (annulling award).
12
Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Dissenting
Opinion of Mr Bernardo M Cremades (16 August 2007) para 37.
13
Aloysius P Llamzon, Corruption in International Investment Arbitration (OUP 2014) 241.
14
See eg ibid 240 (discussing both the ‘supply’ and ‘demand’ sides of corruption); Kathrin Betz, Proving Bribery,
Fraud and Money Laundering in International Arbitration: On Applicable Criminal Law and Evidence (CUP 2017) 134–35
[quoting unpublished Spentex award (n 10) para 973 and subsequent paragraphs] (‘The Tribunal stressed that corruption
always takes two: “those who bribe and those who take bribes”’).
15
Llamzon (n 13) 255–56.
This ‘asymmetry’ is thus said to be dual.16 First, there is a disparity or asymmetry

in the treatment of bribe solicitation or extortion on the one hand, and of consum-
mated bribes with the investor on the other. Second, in case of a consummated bribe
involving the investor, it is said there is an asymmetry in the treatment of, and attri-
bution of responsibility to, the investor and the host State. Each is considered in turn
below.
The first asymmetry is best illustrated by the EDF (Services) v Romania case.17
In that case, the investor alleged that the Chief of Staff to the Prime Minister of
Romania met the Chairman and CEO of the investor on a hotel parking lot, and
demanded a US$2.5 million bribe, on behalf of the Prime Minister.18 The investor
said it refused to pay and, according to the investor, this caused a ‘change of policy’
and ‘retaliation’ against it.19 The Respondent denied that any request for a corrupt
payment was made.20 In the arbitration, the investor argued that the alleged ‘bribe
request’ breached the fair and equitable treatment standard.21 The tribunal rejected
this argument, finding that the investor failed to ‘shoulder[] its burden of proof with
respect to its allegation of a bribery solicitation’.22 But in the course of rejecting
the investor’s argument, the tribunal made significant pronouncements on what the
position would have been had corruption been proved.
The tribunal expressly agreed with the investor that ‘a request for a bribe by a State
agency is a violation of the fair and equitable treatment obligation owed to the Claimant
pursuant to the BIT ’, and that the exercise of State discretion on the basis of corruption
is a ‘fundamental breach of transparency and legitimate expectations’.23 In other
words, the tribunal made it clear that the ‘bribe request’, if proven, was attributable
to the State and that the State could be held liable for it.
But—and here is the first ‘asymmetry’—when the bribe is consummated with the
investor, it could potentially serve as a complete defence to all of the investor’s claims,
even if the State has no defence on the merits to the investor’s claims of treaty breaches
that have nothing to do with the bribe.
A distinct though similar disparity involves corruption that is consummated with a
third party, instead of with the investor.24 For instance, an investor could claim that
a ‘change of policy’ against it occurred after another investor bribed a State official,
and that the bribe caused the change.25 Under the logic of the EDF decision, if the
corrupt transaction with the third party were proved, it could be attributable to the
16
ibid 7–12.
17
EDF (Services) Limited v Republic of Romania, ICSID Case No ARB/05/13, Award (8 October 2009).
18
ibid para 71; see also ibid para 72 (alleging another bribe request, this time from the State Secretary under the
Prime Minister to the investor’s logistics and operational director).
19
ibid para 69 (‘This change of policy resulted from no other reasons than EDF’s refusal to comply with demands
for bribes from senior Romanian Government officials’); ibid para 102 (‘Their acts were part of an orchestrated action
to take the investor’s investment in retaliation for his refusal to pay bribes’).
20
ibid para 221 (‘Respondent flatly denies that such a request for a corrupt payment was made’).
21
ibid para 105.
22
ibid para 237; see also ibid para 221 (adopting a ‘clear and convincing evidence’ standard for the proof of
corruption).
23
ibid para 221 (emphasis added).
24
See Crawford (n 4) 135 (referring to a situation where ‘the losing tenderer may have a claim against the State in
respect of the circumstances in which the tender was concluded’, if the successful tender is procured through corruption).
25
This fact pattern is the subject of claims in a proceeding that remains pending as of this article, but may well arise
in future cases. See Elliott Associates, LP v Republic of Korea, PCA Case No 2018-51, Notice of Arbitration and Statement
of Claim (12 July 2018) paras 2, 5 (in claim arising out of the role the State is alleged to have played in the merger of two
publicly listed Korean companies, Samsung C&T Corporation—in which Elliott had invested and purchased shares—and
Cheil Industries Incorporated, alleging that the State’s support for the merger was obtained through bribes by Samsung
to associates of Korea’s then-President).
State, which could not deploy corruption allegations against the investor, and would
thus face a potential adverse finding of a breach of the fair and equitable treatment
obligation.
The second asymmetry concerns the mechanisms by which corruption could, or
could not, be used by either side in an investment dispute against the other. According
to Dr Llamzon, while corrupt conduct of the employees and agents of the investor is
assumed to be attributable to the investor under principles of agency and corporate
law, the State is not held to the analogous standard; instead, where the investor is
involved in a consummated corrupt transaction, the conduct of the corrupt public
official is found not to be attributable to the State.26
The premise here appears to be that, if the corrupt act were attributable to the host
State, the State could not possibly rely on its own wrongful act as a total defence to
the investor’s claims. Additionally, the reasoning links the notions of attribution on
the one hand, and liability, responsibility or accountability on the other: if the act
is ‘attributable’ to both sides, how could only one side bear all the consequences of
this joint bilateral act? This so-called attribution asymmetry is not just a curious legal
puzzle; it has real-world consequences.
C. The Consequences: Distortion of the Anti-Corruption Regime

As Dr Llamzon underlines, the ‘attribution asymmetry’ creates a ‘potential moral
hazard’:
[States] are effectively rewarded for the corruption of their public officials … without any
correlative demand that those officials be prosecuted or otherwise held to account. Such
one[-]sidedness would thus tend to weaken the promotion of good governance and investor
protection, both of which are foundational policies of investment treaties.27
In other words: ‘when the highest public officials of the host State are complicit
in corruption but the State remains insulated from responsibility, an opportunity to
further international anti-corruption objectives is lost’.28
The Spentex v Uzbekistan Tribunal reportedly echoed these concerns in vigorous
terms in an (as yet) unpublished award, even while finding itself powerless to correct
the imbalance, and ultimately dismissing all the investor’s claims:
The Tribunal stressed that corruption always takes two: ‘those who bribe and those who take
bribes’. If a finding of corruption routinely leads to the dismissal of the claimant’s claims,
corrupt investors are punished for their conduct, while corrupt host states are left off the
hook.29
The Tribunal sought to address this problem, however, in its decision on costs,
adopting the innovative remedy of a donation to the Global Anti-Corruption Initia-
tive:
26
See Llamzon (n 3) 10–11; see also Llamzon (n 13) 277 (‘when solicitation meets acceptance and a bribe is freely
paid, consummated corruption binds the investor to the acts of its agent, but the corruption of the public official is not
attributable to the host State’) (emphasis in the original).
27
Llamzon (n 13) 241–42.
28
ibid 280.
29
Betz (n 14) 134–35 [quoting unpublished Spentex Award (n 10) para 973 and subsequent paragraphs].
[T]he Tribunal ordered both parties to bear their own costs and fees, and to equally share the
costs and fees of the proceedings. In addition, it urged the Respondent to pay US$ 8 million
to the Global Anti-Corruption Initiative administered by the UN Development Programme.
By majority, the Tribunal decided that if the Respondent failed to make this payment, it
would have to bear all the costs and fees of the proceedings, as well as three-quarters of the
Claimant’s legal fees.30
Such legal creativity aside, can the well-established rules governing State respon-
sibility, as reflected in the ILC Articles, help redress this imbalance in a more
fundamental way?31
D. The Relevance of the ILC Articles

Some authors—most notably Judge Crawford and Paul Mertenskötter32 —have ques-
tioned whether the term ‘attribution asymmetry’ incorrectly suggests a link between
this imbalance and the formal application of the rules on attribution.
Attribution is ‘the process by which international law establishes whether the con-
duct of a natural person or other such intermediary can be considered an “act of
state”, and thus be capable of giving rise to state responsibility’.33 Because a State
can only act through natural persons or other intermediaries, the question of attribu-
tion arises in every single case in which State responsibility is alleged: can the acts said
to be wrongful be attributed to the State in the first place?34 Attribution is therefore
‘a basal concept of the law of state responsibility and an essential condition for its
operation’.35 It has a significant place in Part One of the ILC Articles, and the ILC
Articles’ treatment of attribution has been the single most influential contribution of
the ILC Articles to the development of the law of investor-State dispute settlement.36
But, as explained below, there does not appear to be any ‘asymmetry’ caused by
the attribution rules: in fact, in the great majority of cases where officials cloaked with
significant State authority enter into corrupt transactions, the corrupt conduct will be
attributable to the State. Rather, as discussed in this section, there is an unfortunate
tension between the fact that the corrupt act is attributable to the State, and the lack
of corresponding consequences under international investment law. In other words,
the problem is an accountability gap.
30
ibid 135 [quoting unpublished Spentex Award (n 10) para 981 and subsequent paragraphs].
31
See Llamzon (n 13) 242 (‘The law on State responsibility could help counter this potential for moral hazard.
Its application to the problematic of transnational corruption in investment arbitration decision-making would compel
arbitrators to ask under what terms corruption can or should be attributable to a host State, and whether principles of
consent, waiver, estoppel, and acquiescence should be employed to develop fairer ground rules on attribution and State
responsibility. Doing so would help restore balance in the apportionment of the economic and moral costs of corruption’).
32
See James Crawford and Paul Mertenskötter, ‘Chapter 3: The Use of the ILC’s Attribution Rules’ in Meg Kinnear
and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer Law International 2015)
27–42.
33
James Crawford, State Responsibility—The General Part (CUP 2013) 113. Earlier writers also used the term
‘imputation’ or ‘imputability’ to refer to the same concept. ibid n 2.
34
International Law Commission, ‘Draft Articles on the Responsibility of States for Internationally Wrongful Acts
with Commentaries’ UN Doc A/56/10 (2001/2) (‘ARSIWA’) art 2, commentary para 5 (‘The question is which persons
should be considered as acting on behalf of the State’).
35
Crawford (n 33) 113.
36
Crawford (n 4) 132 (‘Questions surrounding attribution are the primary subject area in which tribunals have referred
to the ILC Articles. This is, in principle, a justifiable use of the Articles’); see generally Crawford and Mertenskötter (n
32) 27–42.
(i) Attribution of corrupt acts under Article 7 of the ILC Articles

Part One of the ILC Articles (Articles 1–27) ‘defines the general conditions neces-
sary for State responsibility to arise’.37 Article 2 sets out in a basic principle the two
constituent elements of an internationally wrongful act of the State: the act must be
‘(a) … attributable to the State under international law’ and ‘(b) constitute[] a breach
of an international obligation of the State’.38 Thus, in every single case, attribution
is a necessary element of an internationally wrongful act of the State.39
The breach of an international obligation is also a necessary condition for an inter-
nationally wrongful act of the State. The ILC Articles ‘do not attempt to define the
content of the international obligations breach of which gives rise to responsibility’.40
Doing so would require ‘restating most of substantive customary and conventional
international law’.41 That is the vast realm of the so-called primary rules of State
responsibility. The ILC Articles focus instead on the so-called secondary rules of
State responsibility: ‘the general conditions under international law for the State to
be considered responsible for wrongful actions or omissions, and the legal conse-
quences’,42 such as the rules of attribution, among other things. The ILC Articles also
expressly reflect the lex specialis rule: pursuant to Article 55, the ILC Articles ‘do not
apply where and to the extent that the conditions for the existence of an internation-
ally wrongful act or the content or implementation of the international responsibility
of a State are governed by special rules of international law’.43 These distinctions,
between ‘primary rules’ (not covered by the ILC Articles) and ‘secondary rules’ (cov-
ered by the ILC Articles), and between general principles (covered) and special rules
(not covered), are fundamental, and this note will come back to them.
Attribution is addressed in Chapter II of Part 1 of the ILC Articles (Articles 4–11).
Article 7 in particular concerns acts performed by organs, or entities exercising ele-
ments of governmental authority, who act ultra vires, that is, ‘in excess of authority
or contrary to instructions’.44 It is the key provision to understand the attribution of
corrupt acts to the State, as corrupt acts will almost always be ultra vires. It provides:
The conduct of an organ of a State or of a person or entity empowered to exercise elements

of the governmental authority shall be considered an act of the State under international
law if the organ, person or entity acts in that capacity, even if it exceeds its authority or
contravenes instructions.45
Thus, as a general matter, the rule provides that conduct otherwise attributable to
the State remains so even if the conduct is ultra vires. This rule has been adopted and
reflected in investor-State decisions.46
37
ARSIWA (n 34) 32 (Part One).
38
ibid art 2.
39
ibid art 2, commentary para 5 (‘For particular conduct to be characterized as an internationally wrongful act, it
must first be attributable to the State’).
40
ibid general commentary para 1.
41
ibid.
42
ibid.
43
ibid art 55.
44
ibid art 7.
45
ibid.
46
Crawford and Mertenskötter (n 32) 36–37 [citing ADF Group Inc v United States of America, ICSID Case No
ARB(AF)/00/1, Award (9 January 2003) para 190; Noble Ventures, Inc v Romania, ICSID Case No ARB/01/11, Award
(12 October 2005) para 81; Ioannis Kardassopoulos v Georgia, ICSID Case No ARB/05/18, Decision on Jurisdiction (6
July 2007) para 190].
In other words, the State cannot rely on the fact that the relevant action is unlawful
or unauthorized, even if it is manifestly so, to resist attribution:47 ‘What matters is
the exercise of state authority, not its propriety.’48 Were it otherwise, a State could
rely on its own internal law to resist attribution and ultimately responsibility. That
would run contrary to the fundamental principle enunciated in Article 3 of the ILC
Articles, that ‘[t]he characterization of an act of a State as internationally wrongful
is governed by international law’ and ‘is not affected by the characterization of the
same act as lawful by internal law’.49
Of course, not everything a government official does is attributable to the State: an
act done in a purely private capacity is not, but ‘the difficulty lies in distinguishing
an official, though ultra vires, act from a purely private one’.50 According to the Iran–
US Claims Tribunal, the question lies in whether the conduct was ‘carried out by
persons cloaked with governmental authority’ or not.51 It has also been said that the
issue is whether the relevant actor had ‘apparent [State] authority’.52
Thus, the rule ‘requires judgment in its application’.53 According to Judge
Crawford and his co-author Mr Mertenskötter, one should use a ‘sliding scale’
approach to the attribution of ultra vires acts, and in particular corrupt acts, to the
State—the more authority an official has, the more likely that an ultra vires corrupt
act of that official will be attributable to the State:
The sliding scale approach to attribution in the context of corruption is justified by an

implicit normative judgment that international law makes about the reality of State authority
and what can be expected of a State in controlling its representatives. The more powerful
the official is in the State’s internal structure, the higher international law’s expectation for
the State to control that official will be. The higher ranking the official, the less likely will
it be that a third party seeking to deal with the State is in a position to resist the ultra vires
act.54
The analysis is purely objective and does not turn on who the investor is, or the pre-
cise legal characterization of the corrupt transaction.55 Hence in the great majority of
cases of corrupt transactions, at least those involving officials cloaked with significant
State authority, the corrupt conduct will clearly be attributable to the State: ‘One
form of ultra vires conduct covered by article 7 would be for a State official to accept
47
ARSIWA (n 34) art 7, commentary para 2 (‘The State cannot take refuge behind the notion that, according to
the provisions of its internal law or to instructions which may have been given to its organs or agents, their actions or
omissions ought not to have occurred or ought to have taken a different form.’).
48
Crawford (n 33) 136 (emphasis in the original).
49
ARSIWA (n 34) art 3; see ibid art 7, commentary para 2 (‘Any other rule would contradict the basic principle
stated in article 3, since otherwise a State could rely on its internal law in order to argue that conduct, in fact carried out
by its organs, was not attributable to it’).
50
Crawford (n 33) 137; see ARSIWA (n 34) art 7, commentary para 7 (‘Cases where officials acted in their capacity
as such, albeit unlawfully or contrary to instructions, must be distinguished from cases where the conduct is so removed
from the scope of their official functions that it should be assimilated to that of private individuals, not attributable to the
State’).
51
ARSIWA (n 34) art 7, commentary para 8 (citing Petrolane, Inc v Islamic Republic of Iran, IUSCT Case No 131,
Award (14 August 1991) para 83); see also Crawford (n 33) 137 (‘Apparently the difference between an ultra vires act
that invokes state responsibility and a strictly private act that does not is that the former is performed using and cloaked
by the authority provided to the entity by the state’).
52
See Crawford and Mertenskötter (n 32) 41 (‘Generally, the difference between private and official acts depends on
whether the actor in performing the act(s) in question was cloaked with authority by the State, or – to borrow from the
law of agency – whether the actor had apparent authority’) (emphasis added).
53
ibid.
54
ibid 42 (fn omitted).
55
ibid 40 (‘This objective approach runs through the ILC Articles’ attribution rules’).
a bribe to perform some act or conclude some transaction.’56 The trick—and likely
the real source of disappointment with previous treatments of the issue in investment
cases—is that establishing attribution does not mean the State will be held responsible
or accountable for this conduct.
(ii) Attribution, asymmetry and accountability
The analysis of attribution of corrupt acts under Article 7 of the ILC Articles thus
leads Judge Crawford and his co-author to criticize Dr Llamzon’s ‘attribution asym-
metry’ thesis: ‘To the extent that Llamzon focuses on the rules of attribution to
explain the empirical situation of States not paying for corruption, he is looking in the
wrong place’.57 Instead, they say, the source of any asymmetry or imbalance is to be
found in ‘the relevant substantive primary rule’, and not in the general law of State
responsibility or attribution.58 The ‘relevant substantive primary rule’, according to
them, ‘declares investment contracts tainted by significant corruption to be unlawful
and void (or voidable) and lets the loss of the parties lie where it falls’.59 That would
be the reason for the asymmetry,60 and the outcomes in cases where corruption is
found are ‘wholly independent of international law’s rules on attribution as stated in
ILC Articles 4–11’.61
It is well understood that the ILC Articles contain general and secondary rules of
responsibility: they do not cover the primary rules governing breach, and they do
not cover special rules such as those governing access to international arbitration of
investment disputes. From this perspective, those who wish to correct a perceived
imbalance should turn their attention to the primary rules regarding liability, or to
the special rules regarding the invocation of liability, including the admissibility of
claims, in investor-State arbitration.62 The general and secondary rules are neutral,
and irrelevant to the perceived problem.
From a formal standpoint, the conclusion is unassailable. One might have gone
even further and said that to the extent that corruption is primarily asserted by States
in investor-State arbitration as a defence to investor claims, attribution of conduct
for the purposes of responsibility, which is what the ILC Articles’ attribution rules are
about, is not directly relevant.63
But, practically, the accountability gap remains, and it is not entirely satisfactory to
conclude that the general law of State responsibility essentially has nothing to say on
the problem. After all, at bottom, ‘the attribution of conduct to the State is necessarily
56
ARSIWA (n 34) art 7 commentary para 8 n 150.
57
Crawford and Mertenskötter (n 32) 39.
58
ibid 38 [‘This argument assumes that it is the law of State responsibility that creates the imbalance, but in our view
it is rather the relevant substantive primary rule that does so (if imbalance there is)’].
59
ibid.
60
ibid 38–39 (‘In the investment arbitration context, this substantive rule will usually have the distributive effect
of favouring the State, whether or not its officials are themselves prosecuted or made to disgorge. But the normative
justification of the rule is rooted elsewhere, namely in the conviction that socially harmful and manifestly unlawful activity
should not be protected by the law in any of its facets or repercussions’). This purported rule relates to contract claims,
where the investment contract was procured by corruption; Judge Crawford and his co-author did not directly address
treaty claims, and did not appear to consider potential variations in the way different national laws may treat contracts
procured by corruption.
61
ibid 39.
62
See generally ARSIWA (n 34) arts 42–48 (addressing the general rules on the invocation of the responsibility of a
State at the interstate level). See also Llamzon (n 3) 1.
63
Crawford and Mertenskötter (n 32) 38 (suggesting the point as follows: ‘Again, this has nothing to do with
attribution of wrongful conduct for the purposes of responsibility’) (emphasis added).
a normative operation’,64 with the ultimate goal of promoting and enforcing the rule
of law on the international plane. Investment tribunals are just beginning to grapple
with the tensions created by the disparities underlying this accountability gap. The
next part of this note focuses on one such source of tension, where the secondary
rules of attribution may yet offer helpful guidance, namely the State’s knowledge of
the corrupt act.
III. ATTRIBUTING KNOWLEDGE OF CORRUPT ACTS

TO THE STATE
As this part will show, the question whether the State knew or ought to have known
of the corrupt transaction on which it purports to rely as a defence has become par-
ticularly acute in investor-State disputes. It was a central issue in the foundational
World Duty Free case, and raises a more general question of international law: under
what conditions can a State be said to know of a fact?
A. The Wrong Start: Knowledge of Corruption in World Duty Free v Kenya

As noted above,65 World Duty Free was the first ICSID case dismissed on the basis
of a finding of corruption. This was a contract case, with the arbitration agreement
calling for English law and the choice-of-law clause for Kenyan law.66 The tribunal
‘consider[ed] the two legal systems to have the same material effect as applied to
th[at] case’.67
The Claimant’s CEO submitted in December 2002 a witness statement describing
a US$2 million ‘donation’ he had made to then-President Moi in 1989 to obtain the
investment contract.68 Kenya then filed an application seeking dismissal of the claims
on the ground that a contract procured by bribery was unenforceable.69 Shortly
afterwards, it declared the contract avoided.70
The Tribunal agreed with Kenya that the payment ‘must be regarded as a bribe
made in order to obtain the conclusion of the [contract]’,71 and dismissed the claims.
It identified three independent grounds for this result: (i) the contract-law doctrine
of avoidance in English and Kenyan law, under which Kenya ‘was legally entitled to
avoid and did avoid legally’ the contract;72 (ii) ‘public policy both under English law
and Kenyan law’, which compelled the conclusion that ‘the Claimant is not legally
entitled to maintain any of its pleaded claims in these proceedings’;73 and, famously,
(iii) ‘transnational public policy’.74
As to the first ground—the contract-law doctrine of avoidance—the question
of whether Kenya knew of the bribe before it received the witness statement in
64
ARSIWA (n 34) art 2 commentary para 6; see Crawford and Mertenskötter (n 32) 42 [citing ARSIWA (n 34) art
2 commentary para 6].
65
See (n 7) and accompanying text.
66
World Duty Free (n 8) paras 6, 158.
67
ibid para 159.
68
ibid para 130.
69
ibid paras 41, 105.
70
ibid para 109.
71
ibid para 136.
72
ibid paras 183, 188.
73
ibid para 179.
74
ibid para 157.
December 2002 was crucial. In response to the Claimant’s submission that Kenya
had long known of the bribe, and therefore affirmed the contract and waived its objec-
tion, the Tribunal underlined that ‘[t]here can be no affirmation or waiver by Kenya
without knowledge’.75 And it then reasoned:
[T]here can be no affirmation or waiver in this case based on the knowledge of the Kenyan
President attributable to Kenya. The President was here acting corruptly, to the detriment
of Kenya and in violation of Kenyan law (including the 1956 Act). There is no warrant
at English or Kenyan law for attributing knowledge to the state (as the otherwise innocent
principal) of a state officer engaged as its agent in bribery.76
To be clear, the Tribunal did not purport to be applying international law on

State responsibility, both because the Tribunal addressed the issue under English
or Kenyan law and because the question was not one of attribution for the purpose
of responsibility, but for the purpose of knowledge.77 Indeed, from the perspective
of international law, there can be no real doubt that the acts of the President were
attributable to Kenya under the secondary rules of State responsibility.78 But by
using the language of attribution under international law—and overbroad language
at that—the Tribunal introduced unhelpful confusion into the case law now being
developed by investment treaty tribunals.
Specifically, when discussing the second ground—public policy under English and
Kenyan law—the tribunal stated:
Mr. Ali’s payment was received corruptly by the Kenyan head of state; it was a covert bribe;
and accordingly its receipt is not legally to be imputed to Kenya itself. If it were otherwise, the pay-
ment would not be a bribe. It is also important to recall that the Respondent in this proceeding
is not the former President of Kenya, but the Republic of Kenya.79
In short, the Tribunal effectively concluded that bribery could never be ‘imputed’
or ‘attributed’ to Kenya, because only ‘known’ payments could be imputed to the
State, and any payment that was previously known ‘would not be a bribe’. That
conclusion is difficult to defend as a matter of logic, and untenable as a matter of inter-
national law. And, as discussed below, it was not necessary to support the tribunal’s
conclusion.
B. Knowledge of Corruption in Subsequent Investment Treaty Disputes

Whatever the flaws in its reasoning, World Duty Free amply illustrates that in con-
tract cases, the State’s knowledge of the corrupt act is potentially dispositive: if the
contract procured by corruption is voidable (and not void) under the applicable law,
knowledge of the act and inaction of the State as contracting party could imply affirma-
tion of the corruptly obtained contract. The State’s knowledge of allegedly corrupt
acts could have similarly important consequences in treaty cases, as a matter of both
75
ibid para 184 (emphasis added).
76
ibid para 185 (emphases added).
77
Crawford and Mertenskötter (n 32) 37 (observing that ‘[i]n truth, no issue of attribution in the sense of Part One
of the ILC Articles arose’ in this ruling).
78
See Section II.D.(i).
79
World Duty Free (n 8) para 169 (emphasis added).
procedure and substance. The ways in which the issue arises reflects the State’s dual
role in these disputes: it is both a litigant and a sovereign that criminalizes corrup-
tion and has the power—and arguably the duty, at least in certain circumstances—to
investigate and prosecute corruption.
(i) Estoppel, good faith and acquiescence
There is support among tribunals and commentators for the rule that a State as liti-
gant should not be allowed to invoke corruption as a defence against investor claims if
it has failed as sovereign to genuinely investigate or prosecute the alleged corruption.80
This of course raises the question whether the State knew or should have known of
the alleged corruption, and what it has done in this respect, as a sovereign, since it
came to know about it, perhaps years before the dispute arose.
Some tribunals considering various illegality objections or defences have framed
this principle as a matter of estoppel.81 In the words of the Fraport I tribunal: ‘Princi-
ples of fairness should require a tribunal to hold a government estopped from raising
violations of its own law as a jurisdictional defense when it knowingly overlooked them
and endorsed an investment which was not in compliance with its law.’82
80
See eg Llamzon (n 13) 281 (‘If States are to be allowed to invoke corruption as a defence against investor claims,
they must demonstrate that they have engaged in a genuine effort to prosecute and punish those public officials’); Aloysius
Llamzon and Anthony Sinclair, ‘Investor Wrongdoing in Investment Arbitration: Standards Governing Issues of Cor-
ruption, Fraud, Misrepresentation and other Investor Misconduct’ in Albert Jan Van den Berg (ed), Legitimacy: Myths,
Realities, Challenges (ICCA Congress Series 2015) 451, 467 [‘when a host State invokes corruption as a defense against
investor claims, both the principle of acquiescence under international law (including the law on State responsibility) and
the duty to prosecute corruption (under national and international anti-corruption law) should oblige the State to demon-
strate that it has or is actively investigating and prosecuting those public officials who allegedly received bribes’]; ibid 527
(‘The decision-maker must also inquire as to whether the host State has taken effective steps to prosecute corrupt public
officials whose conduct is being impugned as part of its defense—otherwise the question of State Responsibility and/or
estoppel, and acquiescence may have to be taken into account’); Mohamed Abdel Raouf, ‘How Should International
Arbitrators Tackle Corruption Issues?’ (2009) 24 ICSID Rev—FILJ 116, 135 (‘If a host State takes no action to investi-
gate or prosecute the corrupt acts of its own officials, it should forfeit its right to rely on corruption as a defense … .’); see
also Bernardo M Cremades, ‘Corruption and Investment Arbitration’ in Gerald Aksen and Robert Briner (eds), Global
Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC Pub-
lishing 2005) 217–18 [noting that ‘[t]he implications of the State’s inaction when faced with the corruption of its own
officials is a complex subject that awaits further development in case law’, and that one of the key questions is ‘if a host
State takes no steps (or merely token steps) to investigate, prosecute or rectify the corrupt acts of its own officials, does
this have any consequences upon its right to rely on corruption as a defence in an investment arbitration?’]; Himpurna
California Energy Ltd (Bermuda) v PT (Persero) Perusahaan Listruik Negara (Indonesia), Final Award (4 May 1999) para
214 (calling the State’s accusations of widespread corruption an ‘enormity’ and emphasizing that ‘there is no evidence of
the widespread and uncompromising criminal prosecutions which such a scandal would call for’).
81
See eg Fraport I (n 11) para 346; Desert Line Projects LLC v Republic of Yemen, ICSID Case No ARB/05/17, Award
(6 February 2008) para 118 (tribunal explaining it had ‘no hesitation in concluding’ that, ‘in light of the mass of uncon-
tradicted written and oral evidence’ that Yemen had endorsed the investment at the highest level of the State, Yemen had
‘waived the certificate requirement, and [was] estopped from relying on it to defeat jurisdiction’); Ioannis Kardassopoulos
& Ron Fuchs v Republic of Georgia, ICSID Case Nos ARB/05/18 & ARB/07/15, Award (3 March 2010) para 273 (recalling
its jurisdictional decision, the tribunal noted that Georgia was estopped from objecting to the tribunal’s jurisdiction on the
basis that the investment agreements were void ab initio because ‘their content was approved by Georgian Government
officials without objection as to their legality on the part of Georgia for many years’ after they were entered into); ADC
Affiliate Limited and ADC & ADMC Management Limited v Republic of Hungary, ICSID Case No ARB/03/16, Award
(2 October 2006) para 475 (faulting Hungary for having ‘rested on [its] rights’ and rejecting its argument that certain
investment agreements were unlawful, noting that when ‘Hungary enters into and performs these agreements for years
and takes the full benefit from them, it lies ill in the mouth of Hungary now to challenge the legality and/or enforceabil-
ity of these Agreements’; ‘[w]hether one rests this conclusion on the doctrine of estoppel or a waiver it matters not’);
Southern Pacific Properties (Middle East) Limited v Arab Republic of Egypt, ICSID Case No ARB/84/3, Award (20 May
1992) para 128 (refusing to credit allegations of corruption that Egypt invoked as a defence to liability, but had made no
efforts to prosecute); Niko Resources (Bangladesh) Ltd v Bangladesh Petroleum Exploration & Production Company Limited
and Bangladesh Oil Gas and Mineral Corporation, ICSID Case No ARB/10/11, Decision on Jurisdiction (19 August 2013)
paras 484–85 (dismissing jurisdictional objections because ‘to the extent the Claimant or its parent company had unclean
hands, the Respondents disregarded this situation’ and ‘may not now rely on these events to deny jurisdiction under an
arbitration agreement which they then accepted’) (emphasis added).
82
Fraport I (n 11) para 346 (emphasis added).
Other tribunals have relied on the concept of good faith. Thus, the ICSID tribunal
in Copper Mesa v Ecuador rejected an attempt by Ecuador to invoke alleged ‘flagrant
breaches of Ecuadorian and international human rights law and international public
policy’83 as the basis for preliminary objections, when it had utterly failed to com-
plain of the alleged conduct before the arbitration. The tribunal observed that, even
though ‘[a]ll, or almost all, of [the] alleged conduct took place … openly and in view
of the Respondent’s governmental authorities’, when it came to ‘international law, inter-
national public policy and human rights, not a single complaint was made by the
Respondent against the Claimant at the time’.84 In fact, the Tribunal emphasized,
in explaining its scepticism of the genuineness of the professed concerns underly-
ing Ecuador’s objections, ‘[s]uch a complaint surfaced for the first time after the
commencement of this arbitration’.85 After taking into consideration ‘the Respon-
dent’s obligation of good faith under the Treaty in regard to arbitration’, the tribunal
concluded that it was simply ‘far too late for the Respondent to raise such objec-
tions to the Tribunal’s exercise of jurisdiction in this arbitration’, and held Ecuador
‘precluded from raising this objection as to admissibility’.86
Dr Llamzon has advocated relying on the concept of acquiescence to justify the
principle.87 Under the ILC Articles, a State may lose the right to advance a claim for
relief if it is ‘considered as having, by reason of its conduct, validly acquiesced in the
lapse of the claim’.88 While a State cannot acquiesce to something it could not have
known, ‘the key temporal point’ for determining whether a state has lost the right to
assert a claim through acquiescence ‘is failure to assert a claim when a State would be
expected to do so’.89 This could be long before a dispute with an investor arises.
(ii) Waiver under the ICSID Rules

Waiver under the ICSID Rules supposes that an ICSID arbitration was commenced,
and concerns the inaction of the State as litigant. Under ICSID Arbitration Rule
41(1), ‘[a]ny objection that the dispute … is not within the jurisdiction of the Centre
or, for other reasons, is not within the competence of the Tribunal shall be made
as early as possible’, and in any event ‘no later than the expiration of the time limit
fixed for the filing of the counter-memorial … unless the facts on which the objection
is based are unknown to the party at the time’.90 ICSID Arbitration Rule 26(3) makes
clear that this time limit must be strictly observed by the parties, and results in waiver
absent exceptional circumstances: ‘Any step taken after expiration of the applicable
83
Copper Mesa Mining Corporation v Republic of Ecuador, PCA Case No 2012-2, Award (15 March 2016) para 5.42
(quoting the Respondent).
84
ibid para 5.63 (emphasis added).
85
ibid.
86
ibid para 5.64.
87
Llamzon (n 13) 272–75.
88
ARSIWA (n 34) art 45(b).
89
Llamzon (n 13) 274 (emphasis in the original) (adding that this temporal point ‘is not always the point of actual
knowledge’); see also Fraport I (n 11) para 347 (ultimately not finding estoppel because ‘[t]here [was] no indication in
the record that the Republic of the Philippines knew, should have known or could have known’ of the alleged illegality)
(emphasis added); Waguih Elie George Siag and Clorinda Vecchi v Arab Republic of Egypt, ICSID Case No ARB/05/15,
Award (1 June 2009) para 312 (where ‘the party raising the objection knew or should have known’ of its jurisdictional
objection at an earlier stage, that party’s ‘[f]ailure to state said objection to jurisdiction promptly will render the objection
waived’).
90
ICSID Rules of Procedure for Arbitration Proceedings (‘ICSID Arbitration Rules’) (April 2006) r 41(1) (emphasis
added).
time limit shall be disregarded unless the Tribunal, in special circumstances and after
giving the other party an opportunity of stating its views, decides otherwise.’91
Where ‘the party raising the objection knew or should have known’ of its juris-
dictional objection at an early stage, the party’s ‘[f]ailure to state said objection to
jurisdiction promptly will render the objection waived’.92
Under a straightforward application of these rules, a tribunal could hold that a
State with actual or constructive knowledge of an alleged corrupt transaction that has
failed, as litigant, to raise a jurisdictional objection on that basis as early as possible,
and in any event no later than the expiration of the time limit fixed for the filing
of the counter-memorial, will have waived any such jurisdictional objection, absent
exceptional circumstances.
(iii) ICSID post-award remedies

In ICSID annulment proceedings, it is well established that ‘if an applicant could have
raised an objection in the original Arbitration but failed to do so, it is precluded from
invoking that objection as a ground for annulment’.93 Annulment committees have
thus repeatedly rejected annulment grounds based on arguments or alleged defects
that the applicant chose not to raise before the tribunal.94
91
ibid r 26(3); see also ibid r 27 (‘A party which knows or should have known that a provision of the Administrative and
Financial Regulations, of these Rules, of any other rules or agreement applicable to the proceeding, or of an order of the
Tribunal has not been complied with and which fails to state promptly its objections thereto, shall be deemed—subject
to Article 45 of the Convention—to have waived its right to object’) (emphases added).
92
Siag (n 89) paras 219, 312, 313 (waiver of objection made six months after Tribunal’s decision on jurisdiction)
(quotation at para 312, emphasis added); see also UAB E Energija (Lithuania) v Republic of Latvia, ICSID Case No
ARB/12/33, Decision on Annulment (8 April 2020) para 297 (‘[A] party that has not raised a preliminary objection to
the tribunal’s jurisdiction “as early as possible” and “no later than the expiration of the time limit fixed for the filing of
the counter-memorial”, in conformity with Rule 41(1) of the Arbitration Rules, has waived its preliminary objections’);
Vestey Group Limited v Bolivarian Republic of Venezuela, ICSID Case No ARB/06/4, Award (15 April 2016) paras 132, 150
(waiver of objection raised for the first time in opening statement at final hearing on jurisdiction and liability); Generation
Ukraine, Inc v Ukraine, ICSID Case No ARB/00/9, Award (16 September 2003) para 16.1 (waiver of objection made at
final hearing on jurisdiction and liability); Ampal-American Israel Corp and Others v Arab Republic of Egypt, ICSID Case
No ARB/12/11, Decision on Jurisdiction (1 February 2016) paras 174, 176–77 (waiver of objection made in post-hearing
brief); Autopista Concesionada de Venezuela, CA v Bolivarian Republic of Venezuela, ICSID Case No ARB/00/5, Award (23
September 2003) para 90 (waiver of objection submitted ‘well after the Decision on Jurisdiction’).
93
UAB (n 92) para 95; see also Antoine Abou Lahoud and Leila Bounafeh-Abou Lahoud v Democratic Republic of the
Congo, ICSID Case No ARB/10/4, Decision on the Request for Annulment of the Democratic Republic of the Congo
(29 March 2016) para 112 (‘An ad hoc committee cannot … adjudicate new arguments which were not raised during the
initial arbitral proceedings[.]’) (our translation of original French text providing: ‘Un comité ad hoc ne peut donc … se
prononcer sur des arguments nouveaux qui n’ont pas été soulevés lors de l’instance arbitrale initiale[.]’); Christoph H
Schreuer and others, The ICSID Convention (CUP 2009) 921 (‘[F]ailure to object to a defect that has arisen in the course
of the arbitration proceedings deprives a party from using this defect as a ground for annulment’).
94
See eg Lahoud (n 93) para 150 (‘The question of the ratione personae jurisdiction of the Tribunal was examined
and decided by the Tribunal in the course of the arbitral proceeding… . To proceed, in the framework of this annulment
proceeding, to reexamine this question in light of a new argument, is not part of the function of the Committee, which
therefore can only reject this annulment ground’) (our translation of original French text, which provides: ‘La question de
la compétence ratione personae du Tribunal a été examinée et tranchée par le Tribunal au cours de l’instance arbitrale… .’;
Procéder, dans le cadre de cette procédure en annulation, au réexamen de cette question à la lumière d’un nouvel
argument, n’entre pas dans la mission du Comité, qui ne peut donc que rejeter ce moyen d’annulation’); UAB (n 92)
para 281 (‘The Committee considers that these [jurisdictional] questions, which have been raised for the first time in these
annulment proceedings and were not before the Tribunal, do not need to be addressed and decided by this Committee
as they are irrelevant for purposes of annulment of the Award’); Wena Hotels Ltd v Arab Republic of Egypt, ICSID Case
No ARB/98/4, Decision on Application for Annulment (5 February 2002) para 97 (‘[T]his Committee does not have
to entertain arguments and submissions a party has not developed before the Tribunal’); Compagnie d’Exploitation du
Chemin de Fer Transgabonais v Gabonese Republic, ICSID Case No ARB/04/5, Decision on Annulment (11 May 2010)
para 120 (‘The deadlines which are incorporated in the Convention and the Rules exist for good reason … and no new fact
has been alleged by Gabon to justify the fact that it has not invoked this alleged grievance concerning the composition
of the Tribunal at a stage before the [annulment] procedure … . The Committee therefore declares this grievance to
be inadmissible’) (our translation of original French text, which provides: ‘Les délais qui ont été incorporés dans la
Convention et le Règlement existent pour de bonnes raisons, ils garantissent le maintien de l’ordre au sein du système
d’arbitrage CIRDI, et aucun fait nouveau n’a été allégué par le Gabon pour justifier le fait qu’il n’a pas invoqué ce
As Prof Schreuer further explains, emphasizing the question of knowledge:
[I]t would appear unacceptable to let a party that has knowingly failed to challenge a seri-
ous irregularity before the tribunal later attack the award in annulment proceedings. A party
who, with notice of the defect in question, … has failed to object to the tribunal’s jurisdiction
under Art. 41 … should not be allowed to request annulment on the ground of improper
constitution of the tribunal, manifest excess of powers, or serious departure from a funda-
mental rule of procedure. To hold otherwise would mean that a party that is aware of a serious
defect that may constitute a ground for annulment might be tempted to refrain from raising
that defect before the tribunal in order to later attack an unfavourable award in annulment
proceedings[.]95
Again, under a straightforward application of these principles, a tribunal could

hold that a State that knew or should have known of an alleged corrupt transaction
and failed, as litigant, to raise it in the original proceeding will not be permitted to
rely on it at the annulment stage.
Article 51 of the ICSID Convention, on the revision remedy, likewise specifically
refers to what the applicant knows or should have known. Under Article 51(1):
Either party may request revision of the award by an application in writing addressed to the
Secretary-General on the ground of discovery of some fact of such a nature as decisively
to affect the award, provided that when the award was rendered that fact was unknown to
the Tribunal and to the applicant and that the applicant’s ignorance of that fact was not due to
negligence.96
And further, under Article 51(2), ‘[t]he application shall be made within 90 days
after the discovery of such fact and in any event within three years after the date on
which the award was rendered’.97
C. A Conduct/Knowledge Disparity for Attribution?

A State’s knowledge of corruption can thus have real consequences for its position in
a later ICSID arbitration. But how do we get to the conclusion that the State ‘knows’?
Even as corruption allegations are levelled with increasing frequency in investment
cases, limited attention has been paid to how tribunals are to resolve disputes about
the State’s knowledge, as a matter of international law, of the alleged corruption.
In commenting on World Duty Free, Judge Crawford and Mr Mertenskötter assert:
‘Under English and Kenyan law—and no doubt under international law as well—the
knowledge of the corrupted official is irrelevant to affirmation, for obvious reasons’.98
In a footnote, they remark that ‘[a]s a matter of international law a similar issue
could arise with respect to Arts. 45(b) and 50 of the Vienna Convention on the Law
prétendu grief relatif à la composition du Tribunal à un stade antérieur de la procédure, et notamment devant le Tribunal
lui-même, alors même qu’il lui était connu. Le Comité déclare donc ce grief irrecevable’); Bernhard von Pezold and
others v Republic of Zimbabwe, ICSID Case No ARB/10/15, Decision on Annulment (21 November 2018) paras 262–63
(dismissing challenge to arbitrator as ground for annulment ‘in view of [respondent’s] failure to propose disqualification
promptly, as soon as it became aware of the alleged basis of disqualification’).
95
Schreuer and others (n 93) 920–21 (emphases added) (internal citations omitted).
96
Convention on the Settlement of Investment Disputes between States and Nationals of Other States (opened for
signature 18 March 1965, entered into force 14 October 1966) (‘ICSID Convention’) art 51(1) (emphasis added).
97
ibid art 51(2) (emphasis added).
98
Crawford and Mertenskötter (n 32) 38 (emphasis added).
of Treaties [(“VCLT”)]’.99 Article 50 of the VCLT provides that ‘[i]f the expression
of a State’s consent to be bound by a treaty has been procured through the corrup-
tion of its representative directly or indirectly by another negotiating State, the State
may invoke such corruption as invalidating its consent to be bound by the treaty’.100
Article 45(b) in turn provides that ‘[a] State may no longer invoke a ground for inval-
idating … a treaty under articles 46 to 50 or articles 60 and 62 if, after becoming aware
of the facts … (b) it must by reason of its conduct be considered as having acquiesced
in the validity of the treaty’.101
In other words, they caution that placing too much weight on the knowledge of the
corrupt official may lead the exceptions to the corruption defence (here, affirmation
or acquiescence) to swallow the defence itself. If the knowledge of the corrupt official
were automatically attributed to the State, then the State would automatically know of
any contract procured by corruption and of any treaty obtained through corruption,
and would almost certainly be deemed to have affirmed the contract or acquiesced
in the validity of the treaty in every case.
This approach would appear to create an inconsistency—yet another disparity—
between how the acts and knowledge of a State official are treated. As noted above,
accepting a bribe for a transaction is a classic example of an ultra vires act that never-
theless incurs the responsibility of the State. And it seems self-evident that, just as a
State can only act through natural persons or other intermediaries, it can only know
through them. Indeed, in this context, the greater should logically include the lesser:
it would be odd to suggest that the State can be deemed to have done an act, but yet
deemed not to know of that very same act.
One approach to resolve this tension between Article 7 of the ILC Articles and
Articles 45(b) and 50 of the VCLT may be found in the Crawford–Mertenskötter
sliding scale for ultra vires acts: the more senior an official, the more the legal analysis
must take account of the simple political reality that the acts and knowledge of that
official must be taken to be those of the State. Another approach could be to attribute
knowledge differently for different purposes: knowledge as a sovereign and knowledge
as a litigant might be different. The difficulty is that, in the context of investor-State
disputes, the State is both a litigant on the international plane and a sovereign within
the domestic sphere.
Further complications could arise from the fact that real life rarely mirrors the
simplicity of classroom hypotheticals. For instance, what if other State officials, who
do not necessarily benefit from the bribe, witness and are thus aware of the cor-
rupt transaction? In World Duty Free v Kenya, the investor’s CEO’s witness statement
described how he was ‘received by one Joshua Kulei (JK), who introduced himself
as the Personal Assistant to the President’.102 Similarly, in EDF v Romania, the
Claimant alleged that it was the Chief of Staff that met the investor’s CEO and
requested the bribe on behalf of the Prime Minister, not the Prime Minister him-
self.103 Is the knowledge of the Personal Assistant to the President or the Chief of
99
ibid 38 n 54.
100
Vienna Convention on the Law of Treaties (opened for signature 23 May 1969, entered into force 27 January 1980)
art 50.
101
ibid art 45(b) (emphasis added).
102
World Duty Free (n 8) para 130.
103
EDF (n 17) para 71; see also ibid para 72.
Staff to the Prime Minister to be excluded, as well as that of the President and Prime
Minister, and if so why?
The answers to these questions could yet prove to be outcome-determinative
in a given case. They deserve focused, rigorous consideration of the applicable
rules—including the insights and guidance gleaned from the ILC Articles and
commentary—in light of the factual and procedural challenges of litigating and
resolving actual disputes. We have sought to outline just a few of the tensions and
thorny issues that face parties and tribunals as this as-yet-underdeveloped area of the
law is further explored.

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ICSID Review, Vol. 37, No. 1-2 (2022), pp.

II. THE PROBLEM: ATTRIBUTION ASYMMETRY, OR

of jurisdiction by operation of the legality clause in the Israel–Uzbekistan bilateral

Thus, corruption became in the words of Dr Llamzon a ‘potential “trump” that

B. The ‘Attribution Asymmetry’ Explained

This ‘asymmetry’ is thus said to be dual.16 First, there is a disparity or asymmetry

C. The Consequences: Distortion of the Anti-Corruption Regime

D. The Relevance of the ILC Articles

(i) Attribution of corrupt acts under Article 7 of the ILC Articles

The conduct of an organ of a State or of a person or entity empowered to exercise elements

The sliding scale approach to attribution in the context of corruption is justified by an

III. ATTRIBUTING KNOWLEDGE OF CORRUPT ACTS

A. The Wrong Start: Knowledge of Corruption in World Duty Free v Kenya

To be clear, the Tribunal did not purport to be applying international law on

B. Knowledge of Corruption in Subsequent Investment Treaty Disputes

(ii) Waiver under the ICSID Rules

(iii) ICSID post-award remedies

As Prof Schreuer further explains, emphasizing the question of knowledge:

Again, under a straightforward application of these principles, a tribunal could

C. A Conduct/Knowledge Disparity for Attribution?

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