In a previous post on this blog, Sam raised the possibility that under the logic of World Duty Free v. Kenya, investment treaty arbitration rules might actually encourage state officials to engage in corruption, because corrupt acts by an investor (even when the state is also implicated) can be used to escape state liability in investment arbitration. Even if Sam’s point is true, however, it is important to acknowledge that investment arbitration can be a check on corruption in many instances. In fact, as the Yukos v. Russian Federation award issued against the Russian government this past summer demonstrates, Sam may be pointing out the exception, not the rule. Indeed, this $50 billion award – the largest international arbitration award in history – demonstrates the power of investment arbitration to bring corruption to light and act as an outside check on corrupt states. Continue reading →