The Civil Law Consequences of Corruption Under the UNIDROIT Principles of International Commercial Contracts: An Analysis in Light of International Arbitration Practice

At its 90th session (9-11 May, 2011), the Governing Council of UNIDROIT adopted the 3rd edition of the UNIDROIT Principles (2010 Principles), whereby it introduced a new section devoted to the issue of "illegality". This paper analyzes the civil law consequences of corruption in international commercial arbitration under the new section on illegality in light of current arbitration practice. After drawing a distinction between contractual and restitutionary remedies, the authors concluded that, under the 2010 Principles, while parties to a contract tainted with corruption would still be denied any contractual remedies in most (if not all) of the possible instances, the same is not true with respect to the right to obtain restitution of what they have paid or rendered under the illegal agreement. In fact, the new section on illegality responds to concerns that have become more compelling in international commercial transactions and which must be recognized by international arbitral tribunals.