World Duty Free v Kenya (ICSID Case No. ARB/00/7)

The case

The ICSID Secretary-General registered the request for arbitration on 7 July 2000 ¹. The tribunal was constituted on 29 November 2000 ¹. Kenya first appointed James Crawford. He resigned and V.V. Veeder took his place, and the tribunal was reconstituted on 2 February 2001 ^1,3.

The claimant appointed Andrew Rogers and the co-arbitrators appointed Gilbert Guillaume as President ¹. Jan Paulsson and Freshfields Bruckhaus Deringer acted for Kenya and Geoffrey Robertson and Morgan Lewis and Bockius acted for the claimant, as listed by italaw ².

The claimant said it would seek compensation in the vicinity of US$500 million (award, para. 78) ³.

The US$2 million payment

The dispute arose from a 1989 agreement with Kenya ³. Mr Ali, for the claimant, gave evidence that he was advised the appropriate donation, given the estimated value of the investment, was US$2 million (award, para. 130) ³. He said he was told it was payment for doing business with the Government of Kenya (para. 130) ³.

Kenya did not deny Mr Ali's payments to President Moi (para. 132) ³. The bribery finding that followed was made in Kenya's favour ^3,4.

What the tribunal decided on bribery

The tribunal held that the payments must be regarded as a bribe made in order to obtain the conclusion of the 1989 agreement (para. 136) ³. It found they could not be considered a personal donation for public purposes (para. 136) ³.

The tribunal reviewed national laws and earlier awards. It said bribery and corruption are sanctioned by criminal law in most, if not all, countries (para. 142) ³. It quoted ICC Case No. 1110, which called corruption an international evil (para. 148) ³.

As summarised by Lise Johnson in IISD Investment Treaty News, the tribunal held that the claimant had no right to pursue or recover under any of its pleaded claims (para. 179) ⁴. It found that Kenya learned of the bribe during the arbitration and could and legitimately did avoid the contract (paras. 182 to 185) ⁴. It found no basis for attributing the former president's illegal acts to Kenya ⁴.

Positions of the parties

• World Duty Free: Mr Ali described the US$2 million as a donation he was advised to make, and said he was told it was payment for doing business with the government ³.
• Kenya: did not deny the payments to President Moi (para. 132), and the tribunal ruled in its favour ^3,4.

Status

The ICSID case page lists the award of 4 October 2006 and no later annulment, rectification or revision proceeding ¹. italaw records the outcome as in favour of the respondent ². The award is reported at 46 ILM 339 ².