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Exposure of Bribery During Arbitration

October 3, 2019

Our client, a French company, was assisting a multi-billion dollar Chinese firm in penetrating the French market.

After a few years, the Chinese company decided to terminate the contract, claiming that our client violated a material clause, leading to a series of lawsuits between the two parties, whereby the Chinese company sought damages of over €500M.

During arbitration, our client suspected that the arbitrator’s ruling was one-sided and therefore, hired our firm to find evidentiary support.

Our team conducted thorough social media research which ultimately revealed a social relationship between the CEO of the Chinese company and the arbitrator. 

Human Intelligence

Following these findings, one of our undercover agents contacted the CEO’s cousin (his previous business partner) posing as a friendly, clever and attractive young woman.

Very quickly, our agent became close to the cousin and gained his trust.

In one of their meetings, the cousin bragged to her about how his cousin (the Chinese CEO) managed to bribe an arbitrator thanks to his close friendship with him.

Our agent saw an opportunity to move the operation forward and asked the cousin if he could help her dad in a case he was involved in, by going to the same arbitrator. The cousin agreed and set up the meeting.

During the meeting between our agent and the arbitrator, the arbitrator stated that if needed, he can guarantee a favorable outcome to a given party.

All meetings were recorded and later used as evidence in court, resulting in a drastic change in the balance of power in the case.

Our client swiftly filed several lawsuits against the Chinese company, the CEO and the arbitrator, resulting in a fast compromise in his favor.

Lesson Learned 

Trust your instincts. If in doubt, conduct a thorough background check on everyone involved in the matter and look for any conflict of interest.

Conduct due-diligence checks on the arbitrator prior deliberations or even conduct due-diligence checks on the pool of arbitrators provided by the system.

Go as far as to looking into the arbitrator himself, his office and review his previous cases and ruling records. This can be accomplished  thoroughly through a third party with the right tools. 

If you are interested in services such as these, peruse our due-diligence services or simply contact us for a consultation.