The World Bank Group in international dispute resolution of fraud and corruption: Examining the practice and jurisprudence of the Sanctions Board and ICSID Arbitral Tribunals
Anna Lorem Ramos and
Charlene Valdez Warner[1]
Former World Bank Group (‘WBG’ or the ‘Bank’) President James D Wolfensohn’s prominent speech in 1996 about the ‘cancer of corruption’ put this issue front and center in the development world? Since then, the WBG has made the fight against corruption a priority, viewing corruption as a hindrance to the Bank’s twin goals of ending extreme poverty and boosting shared prosperity. The WBG’s well-known initiatives in combatting corruption primarily revolve around technical assistance and capacity building in areas such as governance, transparency, rule of law, and asset recover}'. Less explored, however, is its growing role in the international dispute resolution of fraud and corruption allegations.
Two institutions within the WBG, while having different mandates and spheres of competence, contribute to the Bank’s fight against corruption. One is the WBG Sanctions Board (the ‘Sanctions Board’), which has over a decade of experience in resolving fraud and corruption claims in WBG-financed projects. Through its publicly available, fully reasoned decisions, the Sanctions Board has progressively developed its own jurisprudence on fraud and corruption with the aim of protecting Bank funds and deterring potential misconduct. The other is the International Centre for Settlement of Investment Disputes (‘ICSID’ or the ‘Centre’), the world’s leading international investment arbitration institution established in 1966 to further the Bank’s objective of promoting international
investment. A number of ICSID arbitral tribunals have issued awards and decisions in investment arbitration cases, in which allegations of fraud and corruption figured in the disputes between investors and states. This chapter examines how the WBG, through the Sanctions Board and ICSID, is pioneering efforts in the international dispute resolution of fraud and corruption allegations. This chapter first briefly discusses the scope of jurisdiction and competence of the Sanctions Board and ICSID. This chapter then explores the practice and jurisprudence of the Sanctions Board and ICSID arbitral tribunals with respect to three issues: burden of proof; standard of proof and evidence; and red flags. Finally, this chapter identifies lessons learned from the practice and jurisprudence of the Sanctions Board and ICSID arbitral tribunals that may be of value to international litigation and arbitration of fraud and corruption allegations.
