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"disputes arising under" versus "disputes arising out of"
Thread poster: Tim Drayton

Tim Drayton  Identity Verified
Cyprus
Local time: 02:21
Turkish to English
+ ...
Mar 26, 2009

I think other legal translators who, like me, have been puzzled by the exact difference between the terms "disputes arising under" and "disputes arising out of" will find the following discussion to be instructive:

http://www.alway-associates.co.uk/legal-update/article.asp?id=133


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Sergei Leshchinsky  Identity Verified
Ukraine
Local time: 02:21
Member (2008)
English to Russian
+ ...
i don't think it is not the same Mar 26, 2009

In my target (RU) we have always translated such passages using both "under and out of" -- I think it is just the Russian language tradition...

The difference in meaning may appear in context, say, "disputes arising under" the contract concern the notions used in the contract itself, whereas "disputes arising out of" the contract might concern the "external entities" as a result of application of the contract in a specific context.


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Charlie Bavington  Identity Verified
Local time: 00:21
French to English
Previous examples Mar 27, 2009

At some level, I can see how "under" could be more limited than "out of", as was previously, but apparently is no longer, the case.

Even if the distinction no longer applies, it still would have been nice if the article had included an example of something that was included within "out of" but not within "under" - better yet if there had been an actual case where the judge had more or less said the case would have been fine if the contract had said "out of" but because it said "under", s/he wasn't prepared to hear it....


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Tim Drayton  Identity Verified
Cyprus
Local time: 02:21
Turkish to English
+ ...
TOPIC STARTER
This distinction may still apply Mar 27, 2009

Charlie Bavington wrote:

At some level, I can see how "under" could be more limited than "out of", as was previously, but apparently is no longer, the case.

Even if the distinction no longer applies, it still would have been nice if the article had included an example of something that was included within "out of" but not within "under" - better yet if there had been an actual case where the judge had more or less said the case would have been fine if the contract had said "out of" but because it said "under", s/he wasn't prepared to hear it....


It is a sweeping generalisation to conclude that this distinction no longer applies. To quote from the passage:

"Although the above position has now been clarified one caveat to keep in mind is that the Court of Appeal was considering an arbitration clause in an international commercial contract. Whether this means that the door is still open for a continuing debate about this matter in respect of domestic commercial contracts, only time will tell."

It may well be that this particular ruling establishes a precedent for international and not domestic contracts; even if it applies to all contracts this is still only within the realm of English law and not all jurisdictions.

I think that this is a distinction that legal translators need to be aware of.


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Charlie Bavington  Identity Verified
Local time: 00:21
French to English
Fair point Mar 28, 2009

All true, I should have made it clear I was talking in terms of the frame of reference of the article.
It was really just a spot of preamble to my main point, which was that examples of situations that would be allowable for "out of" but not "under" would be interesting to see. I love to see professional hair-splitters in action.


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Anne Gillard-Groddeck  Identity Verified
Local time: 01:21
German to English
Look at the key statement Mar 28, 2009

"It is a sweeping generalisation to conclude that this distinction no longer applies. To quote from the passage:

"Although the above position has now been clarified one caveat to keep in mind is that the Court of Appeal was considering an arbitration clause in an international commercial contract. Whether this means that the door is still open for a continuing debate about this matter in respect of domestic commercial contracts, only time will tell."

It may well be that this particular ruling establishes a precedent for international and not domestic contracts; even if it applies to all contracts this is still only within the realm of English law and not all jurisdictions.

I think that this is a distinction that legal translators need to be aware of."



The following passage contains the answer:

"If business men go to the trouble of agreeing that their disputes be heard in the courts of a particular country or by a tribunal of their choice they do not expect (at any rate when they are making the contract in the first place) that time and expense will be taken in lengthy argument about the nature of particular causes of action and whether any particular cause of action comes within the meaning of the particular phrase they have chosen in their arbitration clause. If any business man did want to exclude disputes about the validity of a contract, it would be comparatively simple to say so."


You might like to examine the notion of the "reasonable bystander" to understand the reasoning of the court. Charlie seems to me to be adopting the position of such a "reasonale bystander".

Theoretically, of course, the case can be distinguished for the reasons given, but take a look at this House of Lords judgment:

Premium Nafta Products Limited (20th Defendant) & others v. Fili Shipping Company (14th Claimant) & others [2007] UKHL 40

where Lord Hoffmann states at 12:

"I do not propose to analyse these and other such cases any further because in my opinion the distinctions which they make reflect no credit upon English commercial law. It may be a great disappointment to the judges who explained so carefully the effects of the various linguistic nuances if they could learn that the draftsman of so widely used a standard form as Shelltime 4 obviously regarded the expressions "arising under this charter" in clause 41(b) and "arisen out of this charter" in clause 41(c)(1)(a)(i) as mutually interchangeable. So I applaud the opinion expressed by Longmore LJ in the Court of Appeal (at paragraph 17) that the time has come to draw a line under the authorities to date and make a fresh start. I think that a fresh start is justified by the developments which have occurred in this branch of the law in recent years and in particular by the adoption of the principle of separability by Parliament in section 7 of the 1996 Act. That section was obviously intended to enable the courts to give effect to the reasonable commercial expectations of the parties about the questions which they intended to be decided by arbitration. But section 7 will not achieve its purpose if the courts adopt an approach to construction which is likely in many cases to defeat those expectations. The approach to construction therefore needs to be re-examined.

Note the emphasis on "reasonable commercial expectations". Note the use of the word "reasonable".

Lord Hope of Craighead goes on to call the contentious difference a "fussy distinction".


Finally, note the comment by Adams Drafting:

http://adamsdrafting.com/system/2007/10/24/arising-out-of-and-relating-to/

(I don't know if this is the same Adams who was referred to in another thread on mistranslations, but it might be the case).

The HL judgment can be found at:

http://www.publications.parliament.uk/pa/ld200607/ldjudgmt/jd071017/ship-1.htm

Hoping to have brought this to a reasonable conclusion, I sign off.


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Kristina Kolic  Identity Verified
Croatia
Local time: 01:21
Member (2007)
English to Croatian
+ ...
"arising under" held to be narrow in Arbitration Mar 29, 2009

Here is another example showing that "arising under" has been found to have a narrower meaning than "arising out of":

"Semantics can be dangerous. Clauses which may appear to you to be broad (e.g., "all disputes arising under the contract") have been held by some courts to be "narrow," e.g., to exclude claims that a party was fraudulently induced to enter into the contract. It therefore is recommended that the following clauses or phrases be avoided if a "broad" clause is intended:

Should any dispute arise under this Agreement, the matter in dispute shall be referred to arbitration;

Any and all disputes hereunder shall be subject to binding arbitration:

In the event of any disagreement between the parties hereto as to the
effectuation of this agreement, or performance thereof, * * *.
"

Instead of this narrow clause, the following clauses are recommended in arbitration as "standard or broad clauses":

The American Arbitration Association: "Any controversy or claim arising out of or relating to this contract, or any breach thereof, shall be settled by arbitration in Seattle, Washington in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof."

ICC: "All disputes arising in connection with the present contract shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules."

UNCITRAL: "Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force."

Source: http://files.ali-aba.org/thumbs/datastorage/skoobesruoc/source/CL037_sl037-ch35_thumb.pdf


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