Spanish-English Terminology: International Commercial Contracts in the Americas
Spanish-English Terminology:
International Commercial Contracts in the Americas
Last month, the D.C. Chapter of the Inter-American Bar Association (IABA) and the Department of International Law (DIL) of the Secretariat for Legal Affairs of the OAS hosted an event to promote the Guide on the Law Applicable to International Commercial Contracts in the Americas.
The Guide was approved in February 2019 by the Inter-American Juridical Committee (CJI) of the OAS in 2015, “given ongoing disparities among the laws of countries of the region in the law applicable to international commercial contracts.”
The Inter-American Convention on the Law Applicable to International Contracts (the Mexico Convention, formally adopted in 1994) has only been ratified by two countries: Mexico and Venezuela. The CJI ultimately concluded that, rather than revising the Convention or promoting additional ratifications, “it would be much more effective for States of the Americas to adopt or revise domestic laws for consistency with guidelines endorsed by the OAS, based on international rules and best practices recognized by the HCCH [Hague Conference on Private International Law] and other relevant international bodies.”
Accordingly, the Guide is not a guide to the Mexico Convention per se, but it does reference it—and the Hague Principles—heavily throughout.
Of special interest to translators, the Guide also contains a fair number of references to terminology and specific points at issue in the translation of the Mexico Convention from Spanish to English. Article 30 of the Mexico Convention states that the English, French, Portuguese and Spanish texts are “equally authentic,” but language discrepancies between the official texts of the Mexico Convention were “seriously criticized, particularly by English-speaking jurists at the time of its adoption.” This was listed as one of several reasons for the Convention’s low ratification rate. In order to clarify meaning and improve consistency, the Guide includes an Appendix (B) with a table comparing and “reconciling” the official Spanish, English, and French texts of the Mexico Convention, with “suggested readings” of problematic spots.
Another suggested reason for the low ratification rate was that “perhaps the Mexico Convention made a somewhat forced attempt at synthesis between civil and common law, which did not lead to a satisfactory outcome.” Without question, the translation of any document for use in both civil and common law jurisdictions—whether a private contract or a multilingual convention—can be a conceptual and terminological minefield for both lawyers and translators.
Much has been written specifically about the problem with using English as the international language of commercial contracts. Because English is the language of the common law, issues of comprehension and interpretation can arise when the contract is governed by the law of a civil law jurisdiction.[1] It has been argued therefore that legal English is inappropriate in international commercial contracts because, when those contracts use the same language and structure that common law lawyers use in domestic contracts, their terms “are not always understood or interpreted by their users, or the courts of their users, in the same way.”[2]
To address this challenge and facilitate the understanding of different terms and their meanings across different legal systems, the use of “neutral language” has been promoted by institutions including, most notably, the International Institute for the Unification of Private Law (UNIDROIT). The drafting style of UNIDROIT’s Principles of International Commercial Contracts (Rome, 1994) “resembles that of civilian codes rather than that of Anglo-American statutes. The language is concise and straightforward so as to facilitate comprehension also by non-lawyers and deliberately avoids terminology peculiar to any given legal system, thereby creating a legal lingua franca to be used and uniformly understood throughout the world.”[3] The working group that prepared the Principles “made use of terms commonly used on international contract practice, however, where necessary, they created entirely new concepts with corresponding new terminology.”[4]
The OAS Guide on the Law Applicable to International Commercial Contracts in the Americas acknowledges that “for contracting parties subject to different legal systems or who speak different languages, the UNIDROIT Principles can serve as guidelines for drafting their contracts and as a neutral body of law (akin to a ‘lingua franca’). This may be done in different ways. For instance, the UNIDROIT Principles may serve as a terminological source. In civil law systems, the terms debtor and creditor are used, whereas in common law, the terms obligor and obligee are preferred with the terms debtor and creditor used only when monetary payments are involved. To bridge this gap, the UNIDROIT Principles use the terms obligor and oblige ‘to better identify the party performing and the party receiving performance of obligations...irrespective of whether the obligation is nonmonetary or monetary.’” [para. 76]
Below are some relevant excerpts from the Guide that discuss terminology in reference to the language of the Mexico Convention. I have also compiled a short glossary of terms at the end.
Ley / derecho applicable
“The expression ‘derecho aplicable’ is used in the Spanish version of the Mexico Convention, rather than ‘ley applicable’, which would be the literal translation of the English expression ‘applicable law.’ In English, ‘law’ is a broader term than the Spanish ‘ley’ in that, in addition to legislation, it also includes judicial precedent, custom and other manifestations. When the HCCH Secretariat discussed this topic and offered an unofficial translation of the Hague Principles, it concluded that the term ‘ley aplicable’ was more widespread in Spain, while in most other Spanish-speaking countries ‘derecho aplicable’ is more commonly used.” [fn. 77]
Establishment
“For corporate entities, the Mexico Convention uses the word ‘establishment’ but fails to make clear whether this refers to the main establishment. The English translation of Article 1[5] has been criticized because here the term ‘establishment’ was used as a direct translation of the Spanish ‘establecimiento’ instead of ‘principal place of business’, which is the concept generally known in English-speaking legal systems and which was used in Article 12.” [para. 121]
“The challenge of finding an appropriate term arises out of differences between legal traditions. The debate has been ongoing for some time in different forums and during the drafting of various international instruments. In some legal systems, the place where a business is incorporated may be chosen for specific reasons such as, for example, tax-planning purposes. Under such circumstances, although the place of incorporation could be considered the business establishment, it may not necessarily correspond to the principal place of business.” [para. 122]
Objective Ties/ Closest Connections
“The Mexico Convention states that a contract is considered international ‘if the contract has objective ties with more than one State Party’ (Article 1, paragraph 2). This was a direct translation of the Spanish term ‘contactos objetivos’ and here again there are language problems; as has been suggested, the expression ‘closer/closest connection’ should have been used to remain consistent with the English terminology of other international instruments (for example, the Rome Convention). Objective ties exist when a contract is concluded (signed) in one jurisdiction and performed in another or when the goods are located in different jurisdictions.” [para. 125]
Customs, Usages and Practices
“Comparative law also uses other terms to refer to non-State law, such as customs, usages and practices, principles and lex mercatoria. These terms are far from being homogeneous.” [para. 167]
“The term ‘customs’ is generally reserved these days for use in public international law so as to avoid confusion with the legal term of art–‘customary international law’, although in the Mexico Convention, ‘customs’ was included in a series along with and alternate to ‘usage’ (Article 10). In many legal systems of Latin America, following the French, Italian and Spanish approach, a distinction is made between customs (with normative force and the source of rights to fill in gaps where the law is silent) and usages (which serve to interpret or clarify the will of the parties, with normative force only in some cases). The difference in this nomenclature is that it is not necessary to prove the normative force of usages, as is required for customs.” [para. 168]
Performance and Consequences of Breach
Under Article 14(c) of the Mexico Convention, the scope of the applicable law extends to “the performance of the obligations established by the contract and the consequences of nonperformance of the contract, including assessment of injury to the extent that this may determine payment of compensation.”[6] [para. 463] The Hague Principles refer to “performance and the consequences of non-performance, including the assessment of damages.” [para. 464] “In the Mexico Convention, translation from the Spanish term ‘daño’ into English would be better read as ‘loss’ or ‘damage’ rather than ‘injury’ in the given context.” [para. 465]
Satisfaction of Contractual Obligations
“In the Mexico Convention, translation from the Spanish term ‘extinción’ was incorrectly translated into English as ‘performed’ (which in Spanish would be ‘cumplido’), when the correct word would be ‘satisfied.’ The preparatory reports on the inter-American instrument contain the observation that the Commission approved clause [14](d) ‘providing that obligations, in the English version, should be ‘satisfied’ rather than ‘performed.’” [para. 468][7]
Footnote 224 to paragraph 468 notes that, in English, “’satisfied’ is broader than ‘performed’ and can include payment obligations under the contract while the latter term can be limited to refer to obligations other than payment.”
Registration of Contracts
“The Mexico Convention provides that ‘The law of the State where international contracts are to be registered or published shall govern all matters concerning publicity in respect of same’ (Article 16).[8] It should be noted that translation of the Spanish term ‘la publicidad’ into English would be better read as ‘filing’ or ‘notice’ rather than ‘publicity’, which in English has a very different meaning.” [para. 473]
Prevalence of Other International Agreements
“The Mexico Convention states in Article 6 as follows: ‘The provisions of this Convention shall not be applicable to contracts which have autonomous regulations in international conventional law in force among the States Parties to this Convention.’[9] During the course of translation from Spanish into English, the intended meaning has been lost. It may be better read as follows: ‘The rules of this Convention shall not be applicable to contracts specifically governed by other international conventions in force among the States Parties to this Convention.’ Rome I contains a somewhat similar provision in Article 23. It stipulates that, with certain exceptions, ‘[Rome I] shall not prejudice the application of provisions of Community law which, in relation to particular matters, lay down conflict of laws rules relating to contractual obligations.’” [para. 536]
“The Mexico Convention also addresses the relationship between it and other international agreements on the same subject. It states that: ‘This Convention shall not affect the application of other international conventions to which a State Party to this Convention is or becomes a party, insofar as they are pertinent, or those concluded within the context of integration movements’ (Article 20).[10] Once again, during the course of translation from the Spanish text into the English, some words were omitted and the intended meaning was lost. The provisions may be better read as follows: ‘This Convention shall not affect the application of other international conventions containing rules on this same subject to which a State Party to this Convention is or becomes a party, if they are concluded within the framework of integration processes.’ Rome I contains a similar provision in Article 25(1).” [para. 537]
[1] See, e.g., Northcott, Jill. 2013. “Legal English.” In: The Handbook of English for Specific Purposes. (Brian Paltridge and Sue Starfield eds.), 213-226.
[2] Legal English – How It Developed and Why It Is Not Appropriate for International Commercial Contracts, Barbara J. Beveridge (2000), available at: http://www.tradulex.com/articles/Beveridge.pdf
[3] Michael Joachim Bonell, The law governing international commercial contracts and the actual role of the Unidroit Principles, Uniform Law Review, Volume 23, Issue 1, March 2018, Pages 15–41, available at: https://doi.org/10.1093/ulr/uny001
[4] Beveridge, p. 12
[5] “Se entenderá que un contrato es internacional si las partes del mismo tienen su residencia habitual o su establecimiento en Estados Partes diferentes, o si el contrato tiene contactos objetivos con más de un Estado Parte.”
[6] Article 14(c): “la ejecución de las obligaciones que establece y las consecuencias del incumplimiento del contrato, comprendiendo la evaluación del daño en la medida que pueda determinar el pago de una indemnización compensatoria;”
[7] Article 14(d): “los diversos modos de extinción delas obligaciones, incluso la prescripción y caducidad de las acciones;” Note, however, that the DIL “recommended reading” of 14(d) in Appendix B is “the various ways in which the obligations can be extinguished, including prescription and lapsing of actions;” (underlining added).
[8] “El derecho del Estado donde deban inscribirse o publicarse los contratos internacionales regulará todas las materias concernientes a la publicidad de aquéllos.”
[9] “Las normas de esta Convención no se aplicarán a aquellos contratos que tengan una regulación autónoma en el derecho convencional internacional vigente entre los Estados Partes de esta Convención.”
[10] “Esta Convención no afectará la aplicación de otros convenios internacionales que contengan normas sobre el mismo objeto en los que un Estado Parte de esta Convención es o llegue a ser parte, cuando se celebren dentro del marco de los procesos de integración.”
The full text of the Guide is available in Spanish at: http://www.oas.org/es/sla/ddi/docs/Guia_Derecho_Aplicable_Contratos_Comerciales_Internacionales_Americas_2019.pdf
and in English at: http://www.oas.org/en/sla/iajc/docs/Guide_Law_Applicable_to_International_Commercial_Contracts_in_the_Americas.pdf
Glossary of Terms
acuerdos de resolución de conflictos = dispute resolution agreements
ámbito de aplicación = scope of application
autonomía conflictual [la elección de las normas que han de regir los conflictos de leyes] = conflictual autonomy [choice of conflict of laws rules]
autonomía de la voluntad = party autonomy
autonomía material [la elección del derecho sustantivo] = material autonomy [choice of substantive law]
capacidad de derecho = de jure capacity [This terminology, which is unknown in some systems, is related to what under other legal regimes is referred to as restrictions or bans on the disposal of property.] [Guide, para. 151]
cesión de créditos = assignment of receivables
cláusula de elección de foro = forum selection clause
cláusulas autolimitativas = self-limiting clauses
conflicto entre formularios, batalla de formularios = battle of forms [re: choice of law]
conexiones objetivas/subjectivas = objective/subjective connections [Guide, para. 351]
contactos objetivos = objective connections [see para. 118 of Guide]; closer/closest connection [see para. 125 of Guide]
conexión más cercana, conexión más estrecha, vínculos más estrechos = closest connection
contrato principal = main contract
contratos regidos por el derecho de las inversiones = foreign investment contracts
declaraciones unilaterales de voluntad = unilateral declarations of intent
derecho del foro = law of the venue (lex fori)
derecho elegido = choice of law
derecho no estatal = non-State law
derecho societario = company law
disposiciones imperativas preeminentes = overriding mandatory provisions
doctrina de los actos propios = promissory estoppel
elección de foro = forum selection, choice of forum
elección del derecho [expresa o tácita] = choice of law [express or tacit]
estipulación a favor de terceros = third party rights
extinción [de un contrato] = termination [of a contract]
extinción de las obligaciones contractuales = satisfaction of contractual obligations
fraccionamiento del derecho = splitting of the law (dépeçage)
fuente supletoria = complementary source
incompatibilidad manifiesta = manifest Incompatibility
integrar lagunas [cuando las partes hayan elegido un derecho o un conjunto de normas que no aborden un asunto particular] = gap-filling [when parties have chosen a law or set of rules that do not address a particular matter]
internacionalidad [de un contrato] = internationality [of a contract]
Interpreter y complementar = interpret and supplement
invalidez de los contratos derivados de la ilegalidad o inmoralidad = invalidity of contracts covering unlawful or immoral subject matter
juzgadores = adjudicators
leyes de aplicación inmediata = laws of immediate application
leyes localizadas = localized rules
lugar de celebración del contrato = place of conclusion of the contract
lugar de ejecución del contrato = place of performance of the contract
método conflictual = conflict of laws method
método de derecho uniforme [la unificación del derecho privado] = uniform law method [unification of private law]
negocio jurídico internacional = international legal transaction
norma de la exclusión = Knock-out Rule
normas conflictualistas = conflict of laws rules
normas internacionalmente imperativas = overriding mandatory rules (Lois de police)
normas obligatorias, reglas obligatorias = mandatory rules
normas supletorias = gap-filling rules
normas vinculantes = “black-letter” rules
normas, costumbres, y principios [del derecho comercial internacional] = rules, customs and principles [of international commercial law]
nulidad = invalidity
obligaciones precontractuales = pre-contractual obligations
obligaciones solidarias = joint and several obligations
orden público = public policy (ordre public)
órgano jurisdiccional = court of law, adjudicatory body
reconocimiento y ejecución de sentencias extranjeras = recognition and enforcement of foreign decisions
reenvío = renvoi
reglas internas espacialmente condicionadas = spatially conditioned internal rules
requisito sobre forma = requirements as to form
residencia habitual o establecimiento = habitual residence or principal place of business [see discussion in paras. 121 & 122 of the Guide re: “establishment” vs. “principal place of business” in this context.]
seguridad jurídica = legal certainty
separabilidad = severability [Cf. dépeçage]
separabilidad de la cláusula arbitral = arbitration severability clause
sistema conflictualista = conflict of laws system
transmisión de obligaciones = transfer of obligations
unificación y armonización = unification and harmonization
usos y prácticas comerciales de general aceptación = generally accepted commercial usage and practices
usos, costumbres o prácticas del comercio = commercial usages, customs, or practices
validez formal de una elección del derecho = formal validity of a choice of law
vínculos más estrechos, conexión más estrecha = closest connection