Engaged in International Trade? Watch Out for Language Barriers!

Those engaged in international trade obviously have to confront language barriers and, as one High Court case showed, it is no good sitting on your hands if you receive documents in a language that you do not understand.

A UK company had contracted with a Russian company to supply materials to be used in the repair of a glass-making furnace in Siberia. The contract was expressed to be made under Russian law and provided that any disputes arising would be referred to an arbitration panel in Moscow. Such a reference was made by the Russian company after the furnace failed, leading to a major leak of molten glass.

The UK company played no part in the Moscow arbitration, which culminated in an award to the Russian company in excess of £900,000 for breach of contract. The Russian company subsequently obtained an order in London opening the way for it to enforce the award in England.

In seeking to set that order aside, the UK company argued that it had not been given proper notice of the arbitration proceedings. Although it had received correspondence and a bundle of documents from the Moscow arbitration panel, they had been mainly written in Russian and their significance had not been understood.

In dismissing the application, however, the Court noted that the documents could easily have been translated and there was no explanation as to why that had not been done. It should have been obvious that an arbitration was being commenced and the fact that the notice of arbitration had been received in England, in a language other than English, did not affect its validity.