Interplay Between Arbitration and Criminal Proceedings

Arbitrators regularly deal with the procedural and substantive impacts that criminal proceedings may have on arbitration proceedings. Titled “Impact of Parallel Criminal Proceedings on Procedure and Evidence in International Arbitration” and published in the ICC Dispute Resolution Bulletin (Issue 3, 2019), the authors examine a number of ICC cases which consider requests for a stay of the arbitration proceedings and/or requests relating to the use of evidence submitted within or resulting from criminal proceedings.

The authors provide a detailed review of various cases where the tribunal has considered:

  • requests for a stay of the arbitration pending the outcome of criminal proceedings, including a review of the applicable law and arbitrators’ discretion, the scope and status of the parallel criminal proceedings, criminal proceedings initiated or raised in bad faith, the imperative of efficiency of arbitration, and public policy;
  • the use of evidence relating to criminal proceedings, including the relevance and materiality of documents relating to a criminal action, the secrecy of criminal investigations, and the weight of evidence gathered in criminal proceedings; and
  • alleged forged documents, including requests for exclusion of the allegedly forged documents.

The authors conclude:

“The success of arbitration as a dispute resolution method is measured by the enforceability of the resulting award. In order to ensure the enforcement of ICC awards, the International Court of Arbitration carefully monitors the arbitration process and scrutinizes the award in accordance with Article 34 of the 2017 Arbitration Rules. Article 42 of the ICC Rules provides that the Court ‘shall make every effort to make sure that the award is enforceable at law’, and Article 6 of Appendix II to the Rules provides that the Court ‘considers, to the extent practicable, the requirements of mandatory law at the place of the arbitration’. An award that legitimizes criminal conduct or contradicts a criminal condemnation, even one issued after an award was rendered, could be set aside on the ground of public policy pursuant to Article V(2)(b) of the New York Convention, which provides that the recognition or enforcement of an award may be refused when ‘it would be contrary to the public policy of the country’ where recognition or enforcement is sought. From this standpoint, the relationship between arbitration and criminal law is not, and should not be, one of confrontation. If criminal law and fraud are to be part of a transnational ‘substantive’ public policy, arbitrators can be viewed as the guardians of legality and good morals in international trade.”

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Hong Kong Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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