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Legal dominance and the language of international arbitration

Economist

A thought-provoking piece published a few months ago in the Economist, entitled ‘Exorbitant privilege’, discusses how most international deals are subject to Common Law, namely English and American Law, even when parties come from countries that belong to other legal families; and how most arbitration proceedings take place in English, even when this is not the language of the parties. Naturally, this type of ‘legal dominance’ brings enormous economic advantages for England and the United States. According to this article this situation may change in the future.  There is a special mention to the case of Brazil, one of the emerging economies, who has been effectively promoting its own law. Foreign firms active in Brazil increasingly agree to apply Brazilian law and to rely on local arbitration as an alternative to local courts.

Most of the successful arbitration hubs in the world are located in countries that have English as an official language and belong to the Common Law family. Frequently they are also appealing to foreign parties coming from Civil Law jurisdictions but using English as the language of arbitration proceedings. As a matter of fact, English became a common language for many citizens and businesses throughout the world. The pervasiveness of English has helped to ease communication and to soften cultural barriers because it is currently the universal language of international business. English language has also become the lingua franca of international arbitration. The language used in the arbitration proceedings naturally influences and even dictates the law to be applied, particularly in questions of procedure. The history and development of several arbitration centres suggests that the strong tradition of the Common Law legal system and fluency in the English language have been among their strongest assets.

Law is a kind of language on its own. The legal idiom is a technical language, in the sense that it is for experts only – that is, jurists. Legal language operates as a functional variant of natural language, with its own domain of use and particular linguistic rules. This language is used in specific social roles like pleading and claiming. Legal language is based on ordinary language; however, it is used for special purposes, leading to the existence of legal jargon. In the work of comparative lawyers, language is essential to the process of acquiring knowledge of foreign law. Consequently, law and language are cultural phenomena that must be studied taking into account time and context. The language used is arbitration proceedings is also a legal language, highly sophisticated and specific. It is not sufficient to have a basic knowledge to understand this technical idiom. One needs to manage a specialised vocabulary so as to be able to understand the arguments of the other party, of arbitrators, and witnesses, and express oneself without serious communication issues. The party who is using his or her own native language has an advantage over those who have learned it as a second tongue. Speaking and writing another language sufficiently well for the purpose of arbitration proceedings is very demanding. Not surprisingly, language-related problems have been explicitly raised in an increasing number of disputes in both arbitral and judicial contexts.

Take the example of trade between China and Portuguese-speaking countries. Since most Chinese and Lusophone disputants, arbitrators, and lawyers cannot be said to be truly fluent in English, using this language would not minimise the language barrier, and could even widen the linguistic and cultural gap between the parties. The selection of a ‘neutral’ language as an official business language would be an illogical, unworkable approach. It would require practitioners in the involved countries to carry on commercial activities and draft contracts in a language other than their native tongues. Thus, this approach re-initiates the difficulties posed by the original language diversity problem. It is preferable for the parties, their counsels, and the arbitrators to express themselves using their own language (Chinese or Portuguese) and resort to translation, than to force all parties to use English. On the other hand, China and Portuguese-speaking countries belong to the Civil Law legal family. Using English in arbitration proceedings would submit them to legal English, a technical language to which they are most likely not used to, as their experience with the Common Law tradition is probably little, if not inexistent. Jargon or industry-specific terminology may be so specific that it is almost an entirely different language to itself such as ‘legalese’ in English. In this ‘language’, concepts such as ‘due process’, ‘duty of care’, and ‘consideration’ have specific meanings that result from decades of case law. If this is ignored in translation or if the translator is not aware of such subtleties, legal problems may arise. Using English would submit all participants in the arbitration proceedings to a sort of double translation – both linguistic and legal. Not only would they be using a foreign language, they would also be using a foreign legal language.

 

Image: Satoshi Kambayashi / The Economist


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