SPOTLIGHT #19: NEUTRALISING CORRUPTION IN ARBITRATION: LESSONS FROM THE AVERDA GABON CASE
At Lead up, we are committed to providing our clients with the most innovative conflict resolution solutions, tailored to their specific sectoral contexts. To do so, we must stay alert to recent developments in our clients’ industries and analyse these changes according to their needs. Each month, in the “Lead up Spotlight,” we will share with you – our colleagues, clients, and potential partners – our analysis of a recent development related to conflict resolution in a sector that matters to us and to our clients.
This month’s “Lead up Spotlight” focuses on the Paris Court of Appeal’s ruling (division 5, chamber 16, no. 23/16145), which relates to a dispute involving Averda Gabon.
Background: The Averda Gabon Dispute
The dispute arose from a series of contracts signed between 2015 and 2019 under which Averda, a cleaning company founded in Lebanon and now headquartered in Dubai, was engaged to provide waste management and street cleaning services in Gabon. In 2019, Averda suspended its services citing unpaid invoices, and Gabon responded by terminating the contracts. The State later alleged serious misconduct, including false invoicing worth over US$18 million and bribery of a public official, allegations Averda denied.
In 2020, Averda initiated an ICC arbitration, seated in Paris, against the Gabonese federal government, its State-owned waste management company, Clean Africa, and two other municipalities. In August 2023, the arbitral tribunal issued its award: while corruption during performance was proven, there was no evidence that the contracts were procured through corruption. To prevent Averda from benefiting from irregular practices, the arbitral tribunal applied a 35% reduction to unpaid invoices, a figure aligned with Gabon’s own expert recommendations, while preserving compensation for legitimate services. The final award stood at approximately US$34.4 million, plus costs and interest.
The Annulment Challenge
The Gabonese Republic, joined by the two municipalities and Clean Africa, sought annulment before the Paris Court of Appeal under Article 1520(5) of the French Code of Civil Procedure, arguing that enforcement would breach international public policy.
On 28 October 2025, the Court dismissed the challenge. It held that:
– The arbitral tribunal correctly identified and quantified corruption.
– The 35% deduction applied to the invoiced services neutralised any corrupt advantage.
– Corruption during execution, unlike corruption at procurement, does not automatically invalidate a contract or award.
– The Court awarded Averda €100,000 in legal costs under Article 700 of the French Code of Civil Procedure.
French Courts’ Approach to Corruption in Arbitration
This decision reflects key principles of French arbitration law. First, under the French Code of Civil Procedure, annulment of arbitral awards is strictly limited to cases where the tribunal wrongly accepted or declined jurisdiction, was improperly constituted, failed to comply with its mandate, breached due process, or where recognition or enforcement of the award would violate international public policy. This means that courts do not review the merits of an award. Second, French jurisprudence distinguishes between corruption at the procurement stage, which can invalidate both the contract and the award (as in Sorelec v. Libya and Webcor v. Gabon), and corruption during performance, which may be remedied without annulment (as in the case discussed in this Spotlight). Third, arbitral tribunals apply the “neutralisation” principle, adjusting awards to remove any illicit gains while preserving enforceability. Finally, French courts exercise judicial deference, respecting arbitral findings unless they clearly breach public policy.
Why This Matters
For businesses operating in high-risk jurisdictions, this ruling highlights three critical points. Maintaining robust compliance throughout contract execution is vital to reduce exposure to corruption claims. It also makes clear that French courts tend to favour proportional remedies, such as adjusting awards, rather than annulling contracts outright when corruption emerges during performance. In addition, the decision strengthens confidence in arbitration as a dependable mechanism for resolving disputes, even in complex cases involving allegations of corruption.