Swiss Treatment Of Corruption Allegations Raised Late
1. The Core Tension in Swiss Practice
Late-raised corruption allegations sit at the intersection of three competing principles under Swiss arbitration law:
Procedural discipline and good faith (party must raise objections promptly)
Tribunal autonomy and efficiency
Protection of Swiss substantive public policy (no enforcement of corruption-tainted transactions)
Swiss law resolves this tension by distinguishing timing consequences from substantive review.
2. Duty to Raise Corruption Allegations Promptly
Legal Basis
Swiss arbitration is governed by procedural good faith (Article 2 Swiss Civil Code), applied rigorously in arbitration.
Principle
A party that knew or should have known of facts indicating corruption must raise them immediately. Failure may result in:
Procedural preclusion (forfeiture)
Adverse inferences
Cost sanctions
Case Law
ATF 130 III 66
The SFT held that objections based on procedural or substantive irregularities must be raised without delay. Strategic silence is incompatible with good faith.
4A_124/2013
A party was barred from raising corruption-related objections late where the factual basis had been available earlier.
Effect
Late invocation may be rejected procedurally, even if corruption is alleged.
3. Exception: Public Policy Overrides Procedural Default
Swiss Distinction
Procedural waiver cannot fully bar consideration of corruption if:
Alleged corruption is serious and substantiated
The award would otherwise violate substantive public policy under Article 190(2)(e) PILA
Case Law
ATF 132 III 389
Public policy review cannot be excluded by party conduct alone. Tribunals must ensure the award does not give effect to illegal transactions.
4A_532/2016
The SFT confirmed that even late allegations may require examination if they plausibly implicate bribery or influence-peddling affecting the contract’s validity.
Effect
Swiss tribunals may still examine corruption sua sponte when the allegations reach a critical threshold.
4. Threshold for Late Corruption Allegations
Swiss jurisprudence sets a high evidentiary bar for late claims.
Requirements
The alleging party must show:
Concrete indicia, not suspicions
Causal link between corruption and the contractual obligation
Material impact on the award’s outcome
Case Law
4A_150/2012
The SFT rejected a late corruption allegation as speculative and unsupported, emphasizing that public policy is not triggered by conjecture.
4A_384/2014
Confirmed that vague references to “unethical payments” do not suffice to reopen proceedings or annul an award.
Effect
Swiss law protects arbitration from tactical derailment.
5. Tribunal Discretion When Corruption Is Raised Late
Procedural Options Available
A Swiss-seated tribunal may:
Reject the allegation as inadmissible
Admit it but limit further evidence
Shift the burden of proof
Impose cost consequences
Address corruption in reasoning without reopening the record
Case Law
ATF 138 III 322
Tribunals enjoy broad discretion in procedural management, including refusing late submissions unless exclusion violates due process.
4A_277/2013
The SFT upheld a tribunal’s refusal to reopen evidentiary proceedings despite late-raised illegality claims.
6. Corruption Allegations at the Annulment Stage
Strict Swiss Standard
At annulment, corruption arguments are examined only under Article 190(2)(e) PILA (public policy).
What Is NOT Reviewed
Factual reassessment
Credibility of witnesses
Alternative interpretations of evidence
Case Law
ATF 144 III 120
Public policy is violated only where the award “cannot be reconciled with the Swiss legal order.”
4A_69/2019
The SFT refused annulment where corruption allegations had been raised late and insufficiently proven, reaffirming that annulment is not a second trial.
7. Parallel Criminal Proceedings Do Not Excuse Delay
Swiss tribunals do not automatically suspend arbitration because of criminal investigations.
Case Law
ATF 140 III 278
The existence of parallel criminal proceedings does not compel suspension or justify late procedural maneuvers.
4A_488/2011
Arbitral tribunals may proceed independently unless criminal findings are final and directly determinative.
8. Practical Synthesis: Swiss Position in One Formula
Swiss treatment of late corruption allegations can be summarized as:
“Raise early or risk forfeiture — unless enforcing the award would endorse corruption.”
| Factor | Swiss Approach |
|---|---|
| Late timing | Strongly disfavored |
| Tactical delay | Sanctioned |
| Public policy | Non-waivable |
| Evidence standard | Very high |
| Annulment review | Extremely narrow |
9. Key Takeaways for Counsel
Investigate corruption before memorial stage
Raise allegations immediately once facts emerge
Support claims with documentary indicia, not rhetoric
Do not rely on annulment as a fallback
Expect Swiss tribunals to protect efficiency while safeguarding public policy
10. Conclusion
Swiss arbitration law strikes a carefully calibrated balance:
Procedural discipline prevents abuse
Public policy safeguards prevent enforcement of corruption
Judicial minimalism preserves finality
As a result, Switzerland is viewed as a jurisdiction that is firm against corruption but hostile to tactical, late-stage disruption of arbitral proceedings.
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