Which Language Governs in International Contract Disputes?

Language Translation Can Introduce Ambiguity in Legal Contexts

Language translation inherently involves ambiguity. Some languages have only one word to express concepts expressed by multiple words in another language. To make matters even more complicated, many languages lack words for certain concepts altogether.  In the literary world, this ambiguity gives translators the freedom to create beautiful works of art. In the world of legal contracts, however, where the precise meaning of a particular word can determine the outcome of a case, the ambiguity created by the various language translations of a contract can cause problems. One way to deal proactively with such issues is to include a prevailing language clause.

Prevailing Language Clauses Specify Which Language of a Contract Governs

In today’s world of international business, it’s common for companies to translate their contracts into many different languages. They do this both for the convenience of their business partners and customers and to increase the likelihood that their contracts will be enforced in court. As noted above, however, multiple translations can introduce ambiguity into the interpretation of the contract.

Companies deal with this ambiguity by including a prevailing or governing language clause in their contracts. A prevailing language clause is simply a provision of the contract that specifies that if a dispute about interpreting the contract ever arises from the fact that it exists in multiple languages, the contract in the specified language will govern the interpretation for all translations. As the case below shows, including such a clause can influence the outcome of contract disputes.

Florida Company Exploits Ambiguity of English Translation to Defeat Motion to Dismiss

In Marine Pro Dock Systems v. Polietilen Mamulleri San. Tic. Ltd. Stl, a Florida company sued a Turkish company in the U.S. District Court for the Southern District of Florida for breach of contract. Specifically, the Florida company claimed that the Turkish company engaged a third-party distributor in violation of the parties’ Exclusive Distributor Contract. The Turkish company moved to dismiss the complaint arguing, among other things, that the Southern District of Florida was an improper venue for the lawsuit because the contract included a forum selection clause designating the Turkish court system as the exclusive forum for lawsuits related to the contract.

The Florida company based its response to this motion on the English translation of the forum selection clause, which specified that “[i]n the event of disputes in the execution of this Agreement, Turkish Law shall be applied and Izmir Commercial Courts shall be entitled.” The Florida company interpreted the word “execution” in the forum selection clause to refer solely to the signing of the agreement. This interpretation is supported by Black’s Law Dictionary, which includes among the definitions of execute “to make (a legal document) valid by signing.”

Based on this narrow definition of execution, the Florida company argued that the forum selection clause applied only to disputes related to the signing of the contract. The company was therefore free to file its lawsuit regarding breach of the contract wherever it wanted, including in U.S. federal court in Florida.

Prevailing Language Clause Specifies that Turkish Contract Governs

In response, the Turkish company pointed out that the meaning of execution is ambiguous. Indeed, Black’s Law Dictionary also includes “to perform or complete (a contract or duty)” among the definitions of execute. The Turkish company argued that the full context of the contract made it obvious that this second definition of execution was the correct interpretation of the contract. It also questioned why parties to a contract would bother to negotiate a forum selection clause that applied to some disputes arising from the contract but not all.

But the Turkish company didn’t limit itself to arguments based on the English version of the contract. The company noted that there were both English and Turkish translations of the contract. Moreover, the contract contained a prevailing language clause that required that “[i]n the event of any difference in the Agreements which are signed both in Turkish and English, [caused by] the language, the text which was issued in Turkish shall prevail.”

This mattered because the Turkish word translated as execution in the English contract is not as ambiguous as its English counterpart. The Turkish company explained to the court that Turkish word was uygulamasinda, which translates to “in practice” in English. Its root word is uygulama, which translates to “implement” in English. These Turkish to English translations clearly indicate that the word execution in the English translation applies to disputes involving the performance or implementation of the contract, not merely the process of signing it. Thus, the Turkish company argued, the forum selection clause of the contract applied in full to the Florida company’s lawsuit alleging breach of contract.

The court in Marine Pro Dock Systems wound up dismissing the complaint for diversity jurisdiction reasons. But the case illustrates the importance of including a prevailing language clause in a contract that exists in multiple translations. When paired with an expert translation done by an experienced translator, prevailing language clauses can significantly reduce the ambiguity of language translation—thereby decreasing the likelihood of costly legal fights.

Get in to touch with All Language Alliance, Inc. to obtain legal translation of contracts from and into Turkish, Romanian, French, German, Spanish, Simplified Chinese, Mongolian, Traditional Chinese, Russian, Italian, Portuguese, Dutch, and other foreign languages.

Defendant’s motion to dismiss in Marine Pro Dock Systems, LLC v. Polietilen Mamulleri San. Tic. Ltd. Stl, Case No. 2:18-cv-14006, was filed in the United States District Court for the Southern District of Florida on March 28, 2018.

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