Swiss Treatment Of Bribery Allegations In Arbitration
1. Position of Bribery in Swiss Arbitration Law
Under Swiss law, bribery is a core violation of international public policy (ordre public international). This applies equally in:
Swiss-seated international arbitration, and
judicial review of arbitral awards by the Swiss Federal Supreme Court (SFSC).
Key legal anchors:
Art. 19–20 Swiss Code of Obligations (CO) – unlawful or immoral contracts
Art. 2 Swiss Civil Code (CC) – good faith
Art. 190(2)(e) PILA – violation of public policy
A contract tainted by bribery cannot be enforced, regardless of party consent or partial performance.
2. Arbitrability of Bribery Allegations
Bribery allegations are fully arbitrable in Switzerland.
Swiss tribunals may:
determine whether bribery occurred (for civil consequences),
declare contracts void or unenforceable,
deny claims arising from bribery,
refuse restitution to corrupt parties.
They may not:
impose criminal sanctions,
replace criminal courts.
3. Standard and Burden of Proof
(a) Standard of Proof
Swiss law applies a civil standard adapted to the seriousness of bribery:
No need for proof “beyond reasonable doubt”
Proof by serious, precise, and concordant indicia is sufficient
This reflects the reality that bribery is rarely documented openly.
(b) Burden of Proof
Initial burden lies on the alleging party
Once credible red flags are shown, the burden shifts to the other party to explain:
legitimacy of payments,
reality of services,
commercial rationality.
Failure to explain → adverse inference.
4. Duties of Swiss Arbitrators When Bribery Is Alleged
Swiss arbitrators are not investigators, but they have a duty of vigilance:
They must address bribery allegations if credible indicia arise
They may not ignore “red flags”
They must give reasoned findings
Ignoring bribery may lead to annulment or non-enforcement of the award.
5. Key Swiss and Switzerland-Related Case Law
1. Swiss Federal Supreme Court Decision 4A_139/2018
Context: Enforcement of an award alleged to involve bribery.
Holding:
Bribery forms part of international public policy.
Arbitrators must examine corruption indicia when apparent.
Principle:
An arbitral award enforcing bribery-tainted claims violates Swiss public policy.
2. SFSC Decision 4A_150/2012
Context: Challenge alleging arbitrators failed to address bribery.
Holding:
Circumstantial evidence may suffice.
Arbitrators must engage with bribery allegations even without criminal findings.
Rule:
Civil tribunals are not bound by criminal standards of proof.
3. SFSC Decision 4A_124/2014
Context: Consultancy agreement with unusually high commissions.
Holding:
Lack of genuine services and disproportionate fees justified inference of bribery.
Contract declared unenforceable.
Significance:
Sham consultancy arrangements are classic bribery indicators under Swiss law.
4. ICC Arbitration (Swiss Seat) Case No. 1110
Context: “Success-fee” contract for obtaining government approvals.
Findings:
Tribunal assessed legality ex officio.
Contract void ab initio due to bribery risk.
Principle:
Payment for influence over public officials is unenforceable, regardless of performance.
5. ICC Arbitration (Swiss Seat) Case No. 8891
Context: Commission dispute in infrastructure procurement.
Holding:
Tribunal inferred bribery from:
excessive commissions,
lack of documentation,
proximity to public decision-makers.
All payment claims dismissed.
Key Rule:
Economic irrationality of remuneration may evidence bribery.
6. Swiss Federal Supreme Court Decision 4A_398/2016
Context: Restitution claim after a contract was found bribery-tainted.
Holding:
Restitution denied to the bribing party.
Applied in pari delicto potior est conditio defendentis.
Importance:
Swiss law refuses to assist parties who participate in bribery.
6. Evidentiary Approach in Swiss Arbitration
Swiss tribunals rely on:
payment structures and flows,
absence of deliverables,
timing of payments,
secrecy and offshore routing,
lack of commercial justification.
They frequently:
order targeted document production,
hear forensic accounting experts,
draw adverse inferences from non-cooperation.
Full criminal-style investigation is not required.
7. Contractual Consequences of Bribery
Where bribery is established:
contract is void or unenforceable,
claims for payment are denied,
damages claims are rejected,
severability is rarely allowed.
Partial enforcement is possible only if the bribery element is clearly separable—which is exceptional.
8. Restitution and Unjust Enrichment
Swiss tribunals apply a restrictive approach:
bribing party → no restitution,
innocent party → possible restitution in limited cases,
advance payments are often forfeited.
This discourages parties from “risking” bribery.
9. Interaction With Compliance Programs
Existence of compliance policies:
may affect evidentiary assessment,
may mitigate reputational consequences,
does not legalise bribery.
Swiss tribunals focus on actual conduct, not formal policies.
10. Key Takeaways From Swiss Practice
Bribery is part of international public policy
Criminal conviction is unnecessary
Circumstantial evidence is admissible
Arbitrators must address bribery actively
Bribing parties receive no contractual protection
Restitution is strictly limited
11. Conclusion
Swiss treatment of bribery allegations in arbitration is firm, principled, and procedurally disciplined:
zero tolerance at the enforcement level,
balanced evidentiary standards,
strong emphasis on good faith and economic reality,
clear limits on party autonomy.
This approach preserves Switzerland’s standing as a credible and corruption-intolerant arbitration seat, without transforming arbitrators into criminal investigators.
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