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Corruption in Arbitration in the United Arab Emirates Report (Assessment)

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Updated: Nov 17th, 2020


Corruption is a serious problem in various parts of the world, especially for the developing economies in Asia and African continents. According to Pielke, corruption is like cancer that eats away the potentials of a country’s economy.1 A few people enrich themselves unfairly at the expense of the masses. It is a global problem that affects almost every country, but to a varying degree.

Some of the countries ranked in the Transparency International’s list as the most corrupt countries in the world such as North Korea, Venezuela, Haiti, Iraq, and Sudan have experienced stagnated economic growth. Such countries cannot develop because of a culture where those trusted with the role of protecting public wealth are using it for their own financial gains. In such countries, mediocrity- especially when it comes to handling public projects- is the order of the day.

Companies without the capacity to undertake specific projects are awarded contracts to undertake infrastructural development because either those in power own them or the directors of such companies are willing to pay bribe.

Doing business in a corrupt environment is not easy. Other than the normal taxation, sometimes companies are forced to pay regular bribe to the government officials on a regular basis for purposes of protection against real or imagined threats. In fact, companies adapt to such environments by ignoring basic guidelines, especially those meant to protect the normal citizens, and instead focus on giving regular bribes to the relevant authorities.

Companies, which are ethical enough not to engage in such practices, find it almost impossible to operate in such countries. The victims in such settings are the innocent citizens. They are denied basic services such as quality education, healthcare, and well-paying jobs. Economic growth and infrastructural development stagnate or sometimes even experience a negative growth. Some people are forced to leave their home country in search of better opportunities elsewhere. As Mashamba simply puts it, corruption is a social evil that cannot be tolerated in a country that is keen on achieving economic growth.2 That is why it is necessary to fight this vice through any means possible. In this paper, the researcher will look at the role of arbitration when dealing with corruption.

Research Questions

Corruption is one of the worst economic crimes in any given country and rooting it out should be the focus of scholars, academicians, government officials, students, parents, and the general members of the public. As such, when conducting a research that focuses on corruption and how to deal with it, it is important to have a clearly guided approach of the study that can help in achieving the desired goals. The following are the research questions that will help in this investigation:

  1. Do arbitrators have a role in combating corruption?
  2. Do anti-corruption investigations influence or affect arbitrations?


According to a report by Mashamba, North Korea has one of the worst public health systems in the world.3 Most of the public hospitals lack facilities they need to operate normally because of the massive corruption cases in the country. Doctors often consider leaving the country to practice abroad whenever they can get opportunity to do so. The problem is even worse in Somalia where patients would go to hospitals that lack both the medical facilities and qualified personnel to offer them medical assistance.

They end up dying of simple medical problems that could easily be addressed if the country had a functional public health system. It so happens that these two countries are the most corrupt nations in the world. It is possible to relate corruption with poor state of public health system. The problem is spread across many countries, especially in sub-Sahara Africa and parts of Asia where corruption is rampant. In some countries, people are keen on getting government posts because of the desire to engage in corrupt dealings as a means of getting rich within a very short time.

Corruption affects the education sector, health system, infrastructural development, and ethical behavior among government officers. In some countries, security is compromised because the law enforcers take bribe and ignore crime because the system allows them to do so. Sale and use of drugs become common, destroying the future of the youths, crimes such as rape, robbery, murder, grabbing of public or private property, and many others are rarely prosecuted as long as the accused has a stronger financial might than the victim has, and is willing to bribe the prosecutor, the judge, and investigative officers. Simply put, the rule of law often collapses in a system where corruption is allowed to reign.

Level of Corruption in the United Arab Emirates

The United Arab Emirates is one of the fastest developing economies in the Arab world, according to a report that was released by Mashamba.4 The same report also indicated that the country is one of the least corrupt in the Arab world according to Transparency International, ranked 24th least corrupt country in the world. It is, therefore, possible to associate corruption with lack of proper development. However, it is important to appreciate the fact that the problem of corruption has not been completely eradicated.

For the country to be ranked 24th globally, it means that some elements of corruption are still common in the country despite the massive efforts that have been put in place by various stakeholders to address it. Recent studies show that although not rampant, cases where some government officials receive financial benefits to favor companies when handling contracts have not entirely been eliminated.5 It is not rampant, but it happens occasionally. The public sector is considered less corrupt in this country than the private sector. This is so because sometimes collusions in the private sector may go undetected because of lack of public accountability.

A report by Green, however, shows that the UAE is taking a leading role in the Middle East when it comes to combating corruption.6 This is specifically the case because of the desire by the government and the public to diversify the country’s economy. The best way of doing that is to attract both local and international investors. The investors need a conducive environment where they can do business without the fear of unfair government interference.7

Businesses can only thrive in an environment where there is the rule of law. In an effort to create such an enabling business environment, the government has heavily invested in anti-corruption programs to help promote public awareness about dangers of corruption and the need to report such cases once they are detected. The initiatives have helped in lowering the levels of corruption in the country to a bare minimum.

Corruption is still considered a problem in the country by the government, but it is managed as systems and structures are in place to combat it. It explains why the country has become one of the most preferred investment destinations for foreigners from Europe and North America. The infrastructural development has been impressive and issues about public health, education, and security are taken very seriously by the government.

It does not mean that the authorities and the members of the public should relax in the fight against corruption because the problem is less serious compared with how it affects other countries. As Ganesh notes, the temptation to engage in corruption is always there even in the countries classified as least corrupt in the world.8 It is human nature to try to use a short cut to gain wealth if opportunity arises.

The fight must continue and those in position of power must never be given opportunity to engage in corrupt dealings. Both the public and private sectors must realize that corruption is a vice that cannot be tolerated. This is important because if corruption is allowed to thrive in the private sector, then it may end up finding its way into the public sector. That is why this study is very important because it seeks to find alternative ways of fighting this vice other than through the court system.

Victims of Corruption

Depending on the nature of corruption, the victims of this vice may vary. In extreme cases witnessed in a number of impoverished countries in the world where government officials are only keen on enriching themselves, the victim is always the poor and helpless citizens. They cannot get basic healthcare services because the government officials have stolen the funds meant for equipping and staffing the hospitals. Education system is poor because the government do not see the sense of investing in that sector.

The infrastructure is poor, making it difficult to attract local and foreign investors. Joblessness become rampant in such countries and malnutrition become common. What is even more hurting is that these corrupt government officials invest their stolen money in foreign countries where systems are functional. It is an acknowledgement that they have run down their own country’s systems and structures to an extent that they cannot invest their wealth locally. According to Ganesh, when the victims of corrupt dealings are the innocent members of the public, then the problem is often considered dire, especially if they are helpless and incapable of defending themselves.9

When a tender is given to a less deserving company because the directors have paid a bribe to authorities responsible for making approvals, then there can be a number of victims. The public will be victims if the contracted company fails to deliver value for what they are paid or when they are paid more for a service that would have been done by another company for less. The companies involved in the bidding process will also be victims when they are denied a contract for which they are best qualified to undertake basically because they did not pay a bribe.

The government itself may be a victim if it has to pay more for such projects because it will be forced to source for more cash to fund such projects. When foreign investors avoid a country because of high levels of corruption, both the government and members of the public get affected. The revenues that would have been generated from such investors in form of tax will be lost. On the other hand, members of the public will miss job opportunities that would have been created by such foreign investors.

Understanding the Concept of Arbitration

According to Gomez, arbitration is an alternative dispute resolution technique where issues are addressed out of the court.10 It is a technique where an impartial third party, known as arbiter, is presented with the evidence about what causes the dispute and then he or she is expected to make a decision that is legally binding to both parties and can be enforced by the courts.

Arbitration is a common alternative conflict resolution mechanism when handling commercial disputes, especially among the multinational companies operating in jurisdictions where they believe the local legal system may be inapplicable in handling their case.11 For instance, a foreign firm operating in a country that is strictly governed by Shariah law may feel that the legal system cannot not fairly help in resolving the dispute. In such cases, arbitration becomes the best or even the only alternative of addressing the dispute.

The parties agree to settle the case as per the decision of the arbiter who they must both consider impartial in handling the case. In most of the cases, the decision of the impartial adjudicator is often final and the award they give to the parties aggrieved is enforceable by the courts, unless it is proven that the decision is in fundamental breach of the constitution within the country where it should be enforced. To a large extent, arbitration is often considered a less combative and less confrontational way of solving a dispute.

The aim of the arbiter may not be to offer a win-win deal, but the process is done in a way that makes both parties feel justice has been done. It also eliminates most of the expenses often incurred in a litigation process.

Arbitrators’ Role in Combating Corruption

In the war against corruption, any relevant tool that can yield the desired results is always welcome. Studies have suggested that to win the war against corruption, a nation should go beyond the legal system.12 The knowledge that corruption could lead to a jail term or any other punitive measures helps in deterring cases of corruption. However, it is always necessary to create a culture where people shun corruption because they understand and abhor its negative impact.

Those who give bribes and those who receive it must understand that the culture is dangerous and leads to long-term suffering not only to the public but also to the giver and receiver of the bribes. That is why in the United Arab Emirates, the concept of corruption and its negative impact on the nation and its people is often taught from a very early stage of education. It is meant to ensure that children grow up knowing the dangers of this vice and the need to shun it in all its forms.

Arbitration is one of the common ways of solving disputes in the United Arab Emirates and in any other country for that matter. Cases tried by the arbiters helps in reducing the backlog of cases in the country’s courts. It also helps in ensuring that cases are tried and solutions found without incurring massive costs both to the parties involved and to the government in terms of the need to hire more judges, prosecutors, court clerks, and other court officials.

Disputes solved through arbitration also helps in ensuring that the two parties involved can come out of the process in good terms, capable of engaging in business transactions in future. However, it is yet to be clear how arbitration can be used to address corruption cases. Extensive research exists on how corruption can be battled through the education system, empowering the public to understand its dangers and the need to avoid it.13

The studies also suggests that coming up with strict measures and serious punishments for the perpetrators, and ensuring that when the cases are brought to court they are expedited so that those found guilty can be sent to jail or given necessary punishment is important. However, little studies are available on how arbitration can be used as a tool to combat corruption. It seems to be a new concept in the fight against corruption because of the nature of the aggrieved and the aggressor in corruption cases. It is important to look at how this alternative conflict resolution technique can be used to solve corruption cases.

Views That Arbitration Can Combat Corruption

According to Moses, although not very common, arbitration can be used to address corruption cases in a more effective manner than the courts.14 In many cases, mega corruption scandals often involve those who are in power. Some dictators and political elites retain their power through corruption perpetuated by themselves and their senior officers. They end up stealing most of the public wealth for their own benefits.

When such leaders are ousted, they often have sympathizers who valued their corrupt ways because they benefited in one way or the other. When such leaders are taken to court to answer to their crimes, the lengthy court cases turn them from perpetrators to victims.

They end up winning public sympathy and such cases may not yield the positive energy needed in the society. The crimes they committed while in power become less significant even to those who were victims as their perceived suffering in the hands of the new rulers become exposed to the public. The new regime fails to be seen as being interested in giving justice to the people by punishing the corrupt. Instead, they are seen vengeful leaders keen on retaliating against those who aggrieved them.

This is specifically common in the Arab world and in many other Asian and African countries where communitariansm is common among the political class. When former leaders of one community is taken to court to answer to their corrupt dealings in the past, they appeal to their community, telling them that their trial is a trial of the entire community instead of being that of a single individual engaged in corrupt activities.

In a report by Moses, when trying powerful individuals who were once in the leadership, care should be taken to ensure that division among members of the public is avoided. The aim of any judicial process is to ensure that justice is served and that the just interest of the public is prioritized.15 When a leader engages in corrupt dealings, his actions go against the interest of the public. Their trial should be seen, therefore, as a move towards serving justice to the public that was aggrieved by the corrupt morals of such leaders.

However, in a highly polarized country where leaders can easily play the tribal card to win the sympathy of a section of the community, great care must be taken when handling the cases. Such corrupt leaders should not be left without making them face the law on the basis that their prosecution may lead to public disharmony. However, the process must be done in a way that will be as less disruptive as it possibly can be. The aim should remain to serve justice to the public using systems and structures that will convince both the public and the parties involved that fairness shall prevail.16 That is where arbitration comes in as the most appropriate way of addressing the issue.

When using arbitration in addressing such delicate situations, the government- through its representatives- will be the aggrieved party while the defendants will be the aggressor. The role of the arbiter will be to listen to the cases brought forth by those parties involved and to make a ruling that will fairly address the injustice. The aim of such proceedings is often to force such individuals to pay back all the resources they stole from the government while in power, and in some cases pay equivalent of the interest that such resources would have earned if they were in the banks. Although the proceedings may not result in jail term for the corrupt individuals, it will be a reminder for them that justice always prevails.

The public will be made to understand that corruption is a dangerous vice and those who embrace it may be forced to pay years after leaving power. Such processes may help the government recover part of the lost money, especially if they were kept in overseas banks. Forcing these people to pay or face a jail term will make them bring back the money hidden in foreign banks. It will also be a positive step towards creating a culture of intolerance towards corruption.

In the United Arab Emirates, cases of corruption are not very common. However, it is common to find cases where individuals use corrupt means to win a contract, especially in the private sector. Such cases are common when the applicants have almost the same qualifications and charge almost the same price to undertake a given project. Under such circumstances, it is possible for one of the applicants to look for a means that would make his or her application stand out among the rest.

One possible alternative may be to bribe the officers responsible for making the approvals. When such cases are revealed, it may be possible to solve the case through arbitration. An arbiter can bring together the other applicants and a mutual solution found. If it is a mega project, the arbiter may decide to divide the contact so that all the parties can share. It is also possible to direct the company that has benefited from such a deal to forego other potential deals for the sake of other companies that did not benefit. The goal of such arbitration will be to create a platform where all the parties involve gain something as a way of promoting justice. The arbiter may recommend some form of punitive measures against the officers who accepted the bribe to discourage such practices in the future.

Views That Arbitration Cannot Help Combat Corruption

According to Kulick, corruption may not sound as serious a crime as murder, rape, or robbery with violence but the truth is that it is worse than any of these crimes.17 A corrupt officer who steals money meant to equip and staff hospitals directly causes deaths of hundreds or even thousands of people who need basic healthcare services but cannot have access to it. When funds to build transport infrastructure are stolen, it means that the sick who needs emergency medical care may not make it because they cannot be taken to the medical facilities within the required time.

A corrupt police officer or prosecutor who accepts bribe and fails to protect the helpless and prosecute rapists only encourages such vices because the perpetrators know they can always get away with it as long as they have the financial power. A corrupt official robs the young children of a nation of their future by running down the education system and burdening the future generation with unbearable foreign debt. It is like cancer, eating the nation from within, and exposing it to a wide range of dangers. The nature of this crime, as Kulick notes, cannot be combated through arbitration.18 The following are some of the reasons that make it impossible to combat the vice effectively using arbitration:

The nature of the aggrieved and the aggressor in major corruption scandals makes it impossible to use arbitration. In almost all the cases, victims of corruption are the citizens who have entrusted their leaders to take care of their interest. When a corrupt official steals money meant to take care of the sick, and people end up dying because of poor medical system, it is not possible to put the perpetrators with their victims (some of whom may be dead) on a table to reach a consensus. It is not possible to compensate some of the victims of corruption. The number of people who may want their interests to be represented in such proceedings may be overwhelmingly many and their interest would vary. It is only through a court proceedings that true justice can be served to the victims.

According to Van, there is always the inability of the arbiter to compel the involved parties to release incriminating documents during the arbitration proceedings.19 The arbiter lack the powers that a judge would have. Sometimes the documents may be needed to show that indeed there was corruption. Without such documents, it is not possible for the arbiter to make a conclusive decision about the case.

It means that it is easy for the perpetrations to get away with a crime in arbitration processes because they can easily hide the incriminating documents. Combating corruption require a platform that will make it difficult for the perpetrators to escape the law. They should not have loopholes that can allow them to go away with such a serious crime. This major weakness of arbitration makes it very unreliable means of combating corruption.

Limited nature of punishment that an arbiter can hand down to the corrupt individuals once it is clear that they are guilty also makes it a less attractive means of combating corruption. Corruption is a crime worse than murder and terrorism because it facilitates all the other crimes and social evils in a community.20 People found guilty of this malpractice should receive maximum sentence depending on the nature of their crime. It is appropriate to send them to prison, besides forcing them to return the stolen funds and pay fines, so that it can be a reminder to every other person who may want to try to engage in corrupt dealings.

However, an arbiter cannot hand down a jail sentence to such criminals. It means that it is a weak system that should never be used when addressing a serious problem such as corruption. Arbiters mostly award damages to be paid to the aggrieved parties. However, it is not possible to compensate the dead who lost their lives because of corrupt police officers, government officers meant to improve the country’s infrastructure, or officers responsible for managing healthcare institutions.

Ease of manipulation and limited credibility before the eye of the public is another issue that makes arbitration a less desirable approach of managing corruption cases. Many people, including those who have post-secondary certificates, do not understand the concept of arbitration and how it works. They do not view it as a credible means of seeking justice against corrupt officials. They prefer a judicial system where the corrupt individuals are taken to court to answer to their charges.

As such, it may not be an appropriate system when trying high profile cases where members of the public are unified in their quest to see such people pay for their crimes. It is also easy to manipulate an arbiter. In a corrupt system, it is easy to bribe an arbiter or manipulate him through threats and blackmail to influence his or her final decision.21 The arbiter, who might have been impartial at the beginning of the case, may be compromised along the way, making it impossible to achieve justice in the process. The aggrieved may consider going to court, which means that the entire arbitration process will be considered a waste of time and resources.

Need for other agencies (the court) to enforce decision of the arbiters is also another problem that makes it a less desirable approach of combating corruption. After listening to the case presented, an arbiter may decide to award damages to the aggrieved victims, if that can possibly be done. However, it is possible for the offender to ignore the ruling until such a time that the decision is enforced by the law. No legal action can be taken against such a person for ignoring the decision of the arbiter until a directive of the court is issued for them to comply.

It may take a while to get that order and as Holmes notes, when justice is delayed, then one may consider it justice denied. In some cases, the courts may make its own independent analysis of the case and can overturn the decision of the arbiter.22 It means that sometimes the arbiters’ decision can just be a mere legal suggestion that may not have significant bearing on the parties.

How Anticorruption Investigations Influence Arbitration

The anti-corruption investigations may influence arbitration in a number of ways. According to Van, such investigations often involve gathering evidence from all possible sources, including getting a court order to search premises of the individuals believed to have been involved in the vice.23 That may have a negative influence on arbitration where the focus is to bring two or more willing parties together and find a solution in a non-confrontational manner.

Anticorruption investigation often involves using government instruments such as the police to investigate the issue, a practice that is not common during arbitration. An arbiter will rely on the evidence produced by the parties involved, without compelling any of them to deliver documents against their wish. It is a further demonstration of how unreliable arbitration is when it comes to combating corruption because it is incapable of conducting a thorough investigation.


Corruption is one of the most dangerous vices to a country’s socio-economic and political development. It affects infrastructural development, improvement of education sector, compromises law enforcement and the entire justice system, affects the health sector, scares away local and foreign investors, and affects almost every aspect of a country’s economy. The fight against corruption must be approached with seriousness that it deserves.

Arbitration may be a possible approach when addressing corruption cases that cannot be effectively addressed in the courts. However, it is clear from the above discussion that arbitration can only be used in supernormal cases, such as when handling leaders who may steal have significant influence in a section of the community. However, under normal conditions arbitration stands no chance in the war against corruption. As such, the study suggests that it should be used sparingly when it is clear that the court system cannot be used effectively.


Ganesh S, The Counterinsurgent’s Constitution: Law in the Age of Small Wars (Oxford University Press 2013).

Gomez N, Collapse of Dignity: The Story of a Mining Tragedy and the Fight against Greed and Corruption in Mexico (Ben Bella Books 2013).

Green V, Corruption in the Twenty-First Century: Combating Unethical Practices in Government, Commerce, and Society (Cengage Learning 2013).

Holmes L, Corruption: A Very Short Introduction (Oxford University Press 2015).

Kulick A, Global Public Interest in International Investment Law (Cambridge University Press 2012).

Mashamba C, Alternative Dispute Resolution in Tanzania: Law and Practice (Mkuki na Nyoka 2014).

Moses M, The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2012).

Noussia K, Reinsurance Arbitrations (Springer 2014).

Pielke R, The Edge: The War against Cheating and Corruption in the Cutthroat World of Elite Sports (Roaring Forties Press 2016).

Van H, Sovereign Choices and Sovereign Constraints: Judicial Restraint in Investment Treaty Arbitration (Oxford University Press 2013).

Van S, Fighting Corruption Collectively: How Successful Are Sector-Specific Coordinated Governance Initiatives in Curbing Corruption (Springer 2017).

Vogl F, Waging War on Corruption: Inside the Movement Fighting the Abuse of Power (Springer 2016).


  1. Roger Pielke, The Edge: The War against Cheating and Corruption in the Cutthroat World of Elite Sports (Roaring Forties Press 2016) 14.
  2. Clement Mashamba, Alternative Dispute Resolution in Tanzania: Law and Practice (Mkuki na Nyoka 2014) 28.
  3. Ibid 33.
  4. Ibid 54.
  5. Vincent Green, Corruption in the Twenty-First Century: Combating Unethical Practices in Government, Commerce, and Society (Cengage Learning 2013) 22.
  6. Ibid 23.
  7. Ibid 35.
  8. Sitaraman Ganesh, The Counterinsurgent’s Constitution: Law in the Age of Small Wars (Oxford University Press 2013) 45.
  9. Ibid 34.
  10. Napoleon Gomez, Collapse of Dignity: The Story of a Mining Tragedy and the Fight against Greed and Corruption in Mexico (Ben Bella Books 2013) 61.
  11. Ibid 23.
  12. Kyriaki Noussia, Reinsurance Arbitrations (Springer 2014) 42.
  13. Ibid 44.
  14. Margaret Moses, The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2012) 71.
  15. Ibid 12.
  16. Ibid 16.
  17. Andreas Kulick, Global Public Interest in International Investment Law (Cambridge University Press 2012) 13.
  18. Ibid 67.
  19. Harten Van, Sovereign Choices and Sovereign Constraints: Judicial Restraint in Investment Treaty Arbitration (Oxford University Press 2013) 84.
  20. Ibid 70.
  21. Vogl Frank, Waging War on Corruption: Inside the Movement Fighting the Abuse of Power (Springer 2016) 52.
  22. Leslie Holmes, Corruption: A Very Short Introduction (Oxford University Press 2015) 18.
  23. Schoor Van, Fighting Corruption Collectively: How Successful Are Sector-Specific Coordinated Governance Initiatives in Curbing Corruption (Springer 2017) 90.
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"Corruption in Arbitration in the United Arab Emirates." IvyPanda, 17 Nov. 2020, ivypanda.com/essays/corruption-in-arbitration-in-the-united-arab-emirates/.

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