Lost in Legal Translation: Legal Culture and Language as Risk Factors in International Arbitration and Litigation

As cross-border contracts and treaties multiply, international dispute resolution faces a critical but often overlooked risk: linguistic ambiguity and conceptual misalignment. International disputes typically involve parties, counsel, and adjudicators from diverse linguistic and legal backgrounds, making language itself a source of misunderstanding. Similarly, ‘legal culture’ (the assumptions, practices, and interpretive habits ingrained in different legal systems) further shapes how participants behave, perceive, and understand the contracts, treaties, and proceedings. Misunderstandings of translated legal terms during negotiation and drafting pose systemic risks to fairness, enforceability, and, in some cases, parties’ access to justice. Even when parties share the same language, underlying legal-cultural and language differences can lead to divergent interpretations of key terms.

This post examines how language and legal culture intersect in international disputes by highlighting cases where translations and cultural assumptions influenced outcomes and proposing practical guidance for drafters, counsel, and arbitrators. Rather than focusing on the impact and importance of the procedural language or translations during a proceeding, this post emphasizes drafting and the meaning of the text being translated. As international disputes increasingly span languages and legal traditions, effective communication and mutual understanding are essential for the fairness and efficiency of dispute resolution. Preventative measures at the contract formation stage can reduce the likelihood that ambiguities later jeopardize parties’ rights and obligations.

Language and Legal Culture: The Foundations of a Misunderstanding

The complexity of language lies with the fact that a word’s meaning does not exist in a vacuum – it derives meaning from cultural and legal context. In this sense, a “perfect” translation is a myth. Even speakers of the same language can understand a word differently and moving between different languages, cultures, and legal systems multiplies misinterpretation risks.

Each legal system develops its own terminology, often tied to unique doctrines or institutions. Where concepts lack precise equivalents in other languages, translations require more than literal renderings. An accurate legal translation must convey the sense of the term in what the parties agree is the target legal jurisdiction – a challenge that, admittedly, may prove near impossible. In this sense, the goal is not a literal translation, but one that conveys legal meaning without masking divergent legal concepts.

Legal culture encompasses the various background assumptions, methods, and value systems that lawyers and neutrals internalize from their home jurisdiction’s training and experience. In international disputes, practitioners from different jurisdictions often interpret identical words or facts differently. The sharpest divergence is often between common-law and civil-law attorneys. These two traditions approach procedure and interpretation in distinct ways, which can create mutual incomprehension if not reconciled.

The cases summarized below underscore the broader risk that, when parties and neutrals have different legal languages or legal cultures, they may interpret the same words in divergent ways or infer legal obligations the other party never intended.

Notable Cases

An illustration of translation risk comes from the Elettronica Sicula (“ELSI”) case before the ICJ. The United States alleged that Italy had effected a “taking” under the U.S.-Italy Friendship, Commerce and Navigation Treaty, while Italy pointed to the Italian version of the text, which used the term “espropriati,” more accurately translating to “expropriated.” While a taking defines as “any host governmental action that negatively affects the economic value of the foreign investment,” and is broader than formal expropriation, an expropriation generally refers to a host State’s actions interfering with tangible or intangible property rights or interests. Although the ICJ resolved the case on other grounds, the dispute illustrates how parties can believe they agree to the same protections or standards, but, in fact, do not.

Translation differences can even determine whether arbitration is available. In Kılıç İnşaat İthalat İhracat Sanayi v Ticaret A.Ş. v. Turkmenistan (“Kılıç”), the ICSID tribunal examined Article VII.2 of the Turkey-Turkmenistan BIT, provided in both English and Russian. Due to a translation difference, the English text could be interpreted as making recourse to the local courts optional whereas the literal, English translation of the Russian text made it a precondition to arbitration. The Kılıç tribunal applied Articles 31 through 33 of the Vienna Convention on the Law of Treaties (“Vienna Convention”) and concluded that the Russian version’s requirement was mandatory. Thus, the tribunal lacked jurisdiction.

In 2015, the ICSID tribunal in Muhammet Çap Sehil Inşaat Endustri ve Ticaret Ltd. Sti. v. Turkmenistan (“Sehil”), was tasked with determining whether the same Article VII.2 of the BIT established a mandatory or permissive local courts step prior to arbitration with a one-year limit for the local courts to render a final decision. The tribunal determined that the interpretation of Article VII.2 was a matter of jurisdiction and, applying the Vienna Convention to address the ambiguity of the provision, noted that “[t]he lack of clarity in the text is probably due to the fact that…Turkey relied on the English text it had produced and Turkmenistan signed the Russian version – which had been translated from the English version.” Seeking to minimize the risk of a denial of justice scenario or protracted litigation, the tribunal concluded that Article VII.2 should be read as optional after the cooling-off period. The tribunal acknowledged that its reading differed from that of the Kılıç tribunal but declined to express views on the decision, deferring instead to the evidence and arguments put before it.

Finally, in 2016, a separate ICSID tribunal in Içkale İnşaat Limited Şirketi v. Turkmenistan interpreted the same provision as establishing a procedural obligation related to admissibility rather than jurisdiction. The parties disagreed regarding the interpretation of Article VII.2 of the BIT, as in Kılıç, with the claimant arguing investors could choose between local courts and arbitration, while Turkmenistan maintained that submission to local courts was mandatory unless the courts failed to provide a final decision within a year. After analyzing the English and Russian texts, which had differing lists of authentic texts, the tribunal concluded first that the Russian text was an authentic version, then attempted to reconcile differences between the Russian and English texts concluding that, “the meaning that best reconciles the two texts is that only the English and Russian version of the [BIT] are considered authentic.” The tribunal was then tasked with determining which text’s local remedies provision would control and ultimately concluded that Article VII.2 established a one-year admissibility limitation rather than jurisdictional requirement during which the investor must pursue local remedies.

These examples underscore how a drafting error can result in inconsistent and consequential decisions once a dispute arises.

Recommendations for Drafters and Counsel

The above cases show that linguistic and cultural mismatches in drafting can have far-reaching consequences. Several practical measures can mitigate these risks:

• Draft clearly and define key terms. Vagueness is the enemy of effective translation. Use definitions and explanatory clauses to specify what terms mean. Where a text is drafted with built-in ambiguities in one language, such ambiguity is necessarily reflected in any subsequent translation and can lead to jurisdictional disputes and inconsistent rulings.

• Designate a controlling language. For multilingual agreements, include a clause designating which language version prevails in case of discrepancy. Supremacy clauses provide clear starting points for interpretation and prevent disputes over which language version should control. When no such clause exists, parties necessarily hand the task to the tribunal to reconcile texts using contract and treaty interpretation guidelines to varying results.

• Engage bilingual and comparative lawyers early. Involve lawyers fluent in the relevant languages and familiar with the relevant legal systems. Cross-cultural collaboration is crucial. Involving such practitioners from the counterparty’s jurisdiction can surface potential pitfalls.

• Avoid “the trap of hidden meaning” and test translations. During drafting, test translations with practitioners from the target jurisdiction to ensure that the language conveys the intended meaning.

• Provide explanatory annexes when needed. For complex terms or provisions, include interpretive annexes that explain how particular terms should be understood.

Recommendations for Arbitrators

In the absence of the precautions outlined above, tribunals face the complex task of determining which version of an agreement or related document should prevail. The following considerations may guide arbitrators in addressing these linguistic challenges:

• Determine the authenticity of all versions when no supremacy clause exists. Even though many parties now include such clauses, tribunals must assess whether each version of an agreement or related document was intended to be equally authentic.

• Refer to Articles 31–33 of the Vienna Convention when applicable, as they provide interpretive principles useful for multilingual treaty interpretation.

• Seek to reconcile authentic texts where possible, considering whether diverging interpretations can be harmonized to produce a consistent meaning rather than conflicting outcomes.

Conclusion

Overall, differences in language and legal culture may go overlooked or merely underappreciated, but present critical risk factors in international disputes. Legal meaning is shaped by cultural context as well as language and, accordingly, dispute resolution practices and procedures must account for linguistic ambiguity, conceptual divergence, and other drafting asymmetries. Parties should take care to treat language choices and multi-lingual drafting with the same care and precision as other aspects of the agreements.