Arbitrators’ suspicion of money laundering: choices against principles
| Date | 19 October 2023 |
| Pages | 459-471 |
| DOI | https://doi.org/10.1108/JMLC-07-2023-0116 |
| Published date | 19 October 2023 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Jaffar Yakkop Alkhayer,Chander Mohan Gupta |
Arbitrators’suspicion of money
laundering: choices
against principles
Jaffar Yakkop Alkhayer and Chander Mohan Gupta
Faculty of Legal Sciences, Shoolini University, Solan, India
Abstract
Purpose –This paper aims to examine the options available to arbitrators when they suspect money
laundering during arbitrationproceedings, considering their compatibility with fundamentalprinciples and
conceptsof arbitration.
Design/methodology/approach –Using a doctrinal analysis approach, the paper draws on legal
principles, antimoneylaundering regulations and relevant literatureto explore the topic. It considers relevant
international treaties, standards set by the financial action task force on money laundering, cases and
argumentsfrom legal analysts and experts.
Findings –The paper identifies three options for arbitrators: disregarding suspicions, initiating an
investigation or terminating the proceedings. Disregarding suspicions is deemed inappropriate, as it may
facilitate the concealment of financial crimes. Initiating an investigation is seen as a preferable option,
aligning with the arbitrator’s role and the publicinterest in nullifying contracts linked to criminal conduct.
Terminating the proceedingsis not recommended, as it contradicts the principle of naturaljustice. The paper
emphasizes the importanceof reasonable grounds for suspicions, notifyingthe parties, and allowing them to
addressthe concerns.
Originality/value –This paper contributes to the existing literature by comprehensively analyzing the
compatibility of theseoptions with arbitration principles and concepts. It underscoresthe need for clear laws
and directivesto guide arbitrators in addressing financial crimeswithin the arbitration process, maintaininga
balance betweenparty autonomy and preventing the misuse of arbitrationfor illicit activities.
Keywords Money laundering, Arbitration, Arbitrators’choices
Paper type Research paper
1. Introduction
Arbitration and criminal law are often perceived as distinct realms when it comes to resolving
civil disputes. While arbitrators lack the authority to impose criminal penalties, and only
national courts possess such power, the expansion of arbitration has brought financial offenses
like theft, extortion, tax evasion, corruption and money laundering into the purview of civil
cases heard by arbitrators, especially in the context of international trade (Teichmann et al.,
2023). The combination of arbitration and financial crimes provokes a multitude of
sophisticated legal matters, including but not limited to the relevant criminal law, standards of
evidence, the burden of proof, judicial review and enforcement mechanisms (Cingula et al.,
2018). Arbitrators encounter difficult situations when confronted with contracts marred by
financial crimes. Simultaneously, they bear the responsibility of delivering a binding
arbitration decision that resolves the dispute between the involved parties. In their roles as
arbitrators, lawyers and members of society, they are obligated to implement legal precautions
to combat and avert financial criminal activities (Teichmann et al., 2023;Çelik, 2023;
Glucksmann and Morbach, 2020). National laws and international treaties which determi ned
the scope and nature of money laundering established it as a criminal offense, although it
Money
laundering
459
Journalof Money Laundering
Control
Vol.27 No. 3, 2024
pp. 459-471
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2023-0116
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
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