International commercial arbitration (ICA) has long been considered an effective tool to resolve cross border trade and investment disputes. However, with technology and the potential for arbitrators to be exposed to, and placed in complex situations where, for instance, resolving financial transactions disputes that for part of an arbitral procedure could directly or indirectly be associated with Money Laundering (ML).
ICA is a non-judicial mechanism for public and private disputes, where the parties agree (Redfern and Hunter, Law and practice of international commercial arbitration. Oxford University Press, 1986, p 23), through either a contract and/or arbitration agreement to resolve disputes. While arbitration is voluntary, the process itself provides a high level of confidentiality to the parties. It keeps the dispute out of the courts. One of the fundamental features of international arbitration is confidentiality. This well understood principle could be in conflict with ML activities that arise from arbitral proceedings. This chapter will compare the arbitral laws of the United National Commission on International Trade Law, and the national laws of Australia, India, United Kingdom, United States, European Union, and selected Arbitration Institutions from these economies, to confirm or otherwise whether they adequately address ML activities. The chapter will confirm or otherwise as to whether there is a need for the laws, standards and rules used by arbitrators in arbitral proceedings are in need of updating.
Notwithstanding this, the above is based on the fact that from time to time, there could be contracts that parties have agreed upon, prior to a dispute, raise complex issues related to burden of proof, evidentiary requirements, applicable criminal laws, enforcement, and judicial review (Born, International commercial arbitration, vol I–III, 2nd edn. Kluwer Law International, 2014). The question arises, what are the obligations of an arbitrator under the rules of confidentiality and impartiality to the arbitral process, when having to deal with issues of ML? This chapter will look at whether there have been technology breakthroughs such as blockchain that could assist in managing these issues. It will look at the international and national definition of ML and contracts the definition/s with the arbitral rules and standards.
Significantly, this chapter will address the rules of evidence as they pertain to the well founded and generally applied rules of the balance of probabilities for arbitration proceeding, versus the principle of beyond reasonable doubt for criminal offences such as ML. This alone will be complex to reconcile as arbitrators begin to use and apply technology to an arbitral proceeding. The technology itself may be able to mask or hide such activities; therefore an arbitrator will require new skills so as to ensure they are not compromised. That said, it will be argued how overcoming confidentiality in arbitration will be problematic, when compared to the current day laws and selected arbitration institutional rules. In concluding this chapter, the arbitrator will need to reconcile how they deal with a detection of ML, and how they manage the issue and/or whether there is an obligation to report the alleged criminal activity. This will need to be finely balanced between an arbitrator’s obligation to confidentiality, and the implementation of relevant rules and arbitration laws.
