Definitional requirements of “investment” are a prerequisite needed to be satisfied in order to invoke the jurisdiction of an investment tribunal. For these purposes, the term ‘investment’ is defined by the contracting states under their respective bilateral investment treaties (BIT). The primary requirement for an investment to be legal is that it shall be in consonance with the laws of the host State. The investor is vested with the right to be treated fair and equitably (FET) as required under substantive protections guaranteed under BITs as well as minimum standard treatment under customary international law. Ambiguity arises in cases where the investment has been acquired through corrupt practices. More often than not, the State officials are involved in the fraudulent transactions. However, it is the investor that has to bear the consequences of entering into such an arrangement. The paper has been divided into three parts that address the issue of corruption defence and the applicability of doctrine of estoppel in arbitral proceedings. Firstly, the paper aims to address the attitude of the arbitral tribunals in cases involving the corruption defence. Secondly, the paper looks into the applicability of the doctrine of estoppel in investment arbitration. Lastly, the paper aims to look into the appropriate course of action that could be adopted in such cases.