Circumstantial Evidence, Adverse Inferences, and Findings of Corruption: Metal-Tech v. The Republic of Uzbekistan

Abstract

In an October 2013 award, the ICSID tribunal in Metal-Tech v. Uzbekistan determined that it lacked jurisdiction over the dispute between the parties on account of Metal-Tech’s violations of Uzbek anti-bribery laws. The tribunal held that the existence of bribery in connection with the establishment of Metal-Tech’s investment in Uzbekistan in the late 1990s deprived it of jurisdiction under the applicable bilateral investment treaty (BIT), which requires investments to be implemented in accordance with the laws of the host State. This case represents a rare example of an ICSID tribunal declining to hear a dispute on account of findings of corruption. While allegations of corruption have arisen in many other ICSID cases, the World Duty Free v. Republic of Kenya case represents the only other instance in which findings of corruption by an ICSID tribunal have resulted in the tribunal’s dismissal of the claims. The tribunal’s decision in Metal-Tech v. Uzbekistan is also notable for its especially thorough examination of circumstantial evidence, on which it relied heavily in concluding that bribery had taken place.