Dueling Interpretations of a Translated Chinese Document

How a Contract Dispute Between Exes Led to a Minority Shareholder Suit in Texas

We’re blogged about Chinese contract translation services and the various issues that often come up when dealing with the documentary evidence translated from Simplified Chinese to English. Today we are discussing a case that was recently decided by the Texas Court of Appeals. The case, Heironimus v. Tian, illustrates the legal issues and implications of foreign contract translation. In this blog post, we will analyze how the court handled the dispute over the Chinese to English translation and meaning of the contract written in Simplified Chinese, and what lessons attorneys can learn from this case for avoiding legal problems when translating foreign language contracts.

The plaintiff, Wei Shao Heironimus (“Heironimus”), claimed she was the minority shareholder and sued the defendant, Xiaosha Tian (“Tian”), who was her former husband and the majority shareholder of Mid-American Supply (“Mid-American”), for diverting profits from one of the company’s subsidiaries to another entity which he controlled. The lawsuit was brought based on Heironimus’ derivative standing as a shareholder of Mid-American.

Tian argued that the Heironimus had no standing to sue because she had assigned all of her shares to him as a debt repayment. The trial court granted Tian’s request and dismissed the case for lack of standing. Heironimus appealed, arguing that the trial court erred by not allowing her Chinese to English translator to testify regarding the disputed terms of the contract at issue in the case. The Court of Appeals agreed to hear the case.

Four Chinese Translators, Two Different Interpretations

The Chinese contract in question is a Loan Agreement written in Simplified Chinese that the parties signed in 2014. According to Tian, the contract allowed Heironimus to borrow 30 million Chinese Yuan (about $4.8 million) from him to start her own business and gave her the option to treat the money as either a loan or as a purchase price for all of her shares in Mid-American.

Tian claimed that when the Heironimus failed to repay the loan by the deadline, he became the sole owner of Mid-American. Heironimus argued that the terms of the contract only assigned 35% of her shares to Tian, and that she remained a shareholder. The parties presented conflicting Chinese to English translations and translator’s affidavits to support their respective positions.

First, Tian provided a declaration and properly certified Simplified Chinese to English expert translation to support his interpretation of the contract.  In response, Heironimus produced multiple Chinese translators to support her position. The first was Qi Cheng, whose translator’s declaration was accompanied by the original contract written in Simplified Chinese and an English translation. The declaration stated that a correct interpretation of the contract was that it only transferred a portion of the shares.

The second was the declaration of Xiaolin Zhou, a Chinese-American attorney and Harvard law school graduate, who stated that he had read the Loan Agreement and the certified English translation and concluded that Heironimous remained a shareholder.

Chinese Translation Expert Unavailable to Testify, Substitute Expert Excluded

As the jurisdictional hearing approached, Heironimus discovered that Qi Cheng, the original Chinese to English translation expert whose declaration she had presented, and who she had designated as an expert on the issue of the underlying Chinese contract, was unavailable to testify at the Zoom hearing. Instead, she filed a supplemental brief that designated as her expert Daniella Peng, who worked for the same translation company as Cheng.

The trial judge refused to hear testimony from Peng, stating that the testimony wasn’t relevant because she wanted to hear testimony directly from Cheng. Although Heironimous offered to have Peng provide her own Chinese to English translation, the court declined, and later dismissed the case on jurisdictional grounds.

Dueling Chinese to English Translations Raise Triable Issues of Fact

The appellate court reversed the dismissal and held that Peng’s testimony should have been permitted because it was relevant to determining whether Heironimus retained any interest in the company and had standing to sue. They explained that the testimony could have created a factual issue on the correct translation and interpretation of the Chinese contract, which was essential to resolving the jurisdictional challenge. Specifically, the existence of multiple competing Chinese to English translations suggested that the Chinese contract was ambiguous and could be interpreted in different ways.

The court also noted that there was evidence that Heironimus continued to receive dividends and tax documents from the company after signing the contract—which is consistent with her argument that she remained a shareholder. Because of this, the appellate court concluded that the trial judge should not have dismissed the suit but should have allowed Heironimus to present her case to a jury.

Foreign Contract Translation Issues

In this blog post, we have analyzed how a translated Chinese contract led to a legal dispute in Texas, and how the court handled the issues of relevance, admissibility, and fact-finding in this case. We have been reminded that foreign contract translation is not always a simple or straightforward task, and that it can have significant legal consequences for the parties involved. We have also learned that it is important to hire qualified translators, verify translations, consider legal and cultural context, and avoid ambiguity and vagueness when drafting the original contracts and when translating foreign language contracts. And that, even if a judge tries to insist on testimony from specific (perhaps unavailable) translators, a party can legitimately request to have a substitute witness who is also a professional translator/ interpreter give similar testimony instead.

By following these tips and best practices, attorneys can avoid legal problems and ensure that their clients’ foreign contracts and their translations are enforceable.

Case discussed: Heironimus v. Tian, No. 05-21-00174-CV (Tex. App. Aug. 1, 2022)

Get in touch with the legal translation, deposition interpreting and Apostille service All Language Alliance, Inc. to obtain certified translations of legal documents written in Simplified Chinese and in Traditional Chinese, and certified translation of international contracts; to hire court-certified Mandarin interpreters and court-certified Cantonese interpreters for depositions via Zoom, and for on-site depositions; to retain deposition interpreters fluent in rare Chinese dialects and regional languages.

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