Cantor Fitzgerald & Co v. YES Bank Limited: The Commercial Court Flubs Syntactic Ambiguity

Compared with what was in the fourth edition, chapter 12 (Syntactic Ambiguity) of A Manual of Style for Contract Drafting has changed little. (I added a section on delimiting commas in coordination and a section on multiple instances of syntactic ambiguity in a sentence, but that’s pretty much it.)

That shouldn’t come as a surprise. That chapter and the other sections on ambiguity relate to how the English language works. I’ve had 20 years to work on my analysis, so barring surprises or mistakes, I’ve pretty much said all I have to say. It’s not as if English is going to change. So it’s likely that the only developments will be caselaw. This post offers an instance of that.

In Cantor Fitzgerald & Co v YES Bank Limited [2023] EWHC 745 (Comm), the Commercial Court of the England and Wales High Court dismissed Cantor Fitzgerald’s claim to recover a financing fee in connection with YES Bank’s Further Public Offering in India in July 2020. Here’s the language at issue:

We have been advised by the Company that it contemplates one or more financing(s) through the private placement, offering or other sale of equity instruments in any form, including, without limitation, preferred or common equity, or instruments convertible into preferred or common equity or other related forms of interests or capital of the Company in one or a series of transactions (a “Financing”).

Did the word private modify just placement, as Cantor Fitzgerald argued, or did it also modify offering and other sale of equity instruments? Here’s what the judge, Robert Andrew Bright, had to say:

Where an adjective or determiner is followed by a series of nouns in a list, the conventional understanding is that it modifies all the nouns in that list (unless a discordant adjective or determiner breaks the pattern).

This is not an abstruse rule or pattern known only to specialist grammarians. It is familiar to people in general; or, as it may more appropriately be put in order to illustrate the point: to every Tom, Dick and Harry.

It is certainly widely observed and followed by lawyers. Both in practice and as a tribunal, I have frequently come across the formula “… negligent act or omission” and sometimes “negligent act, error or omission”. I do not think it has ever occurred to me or to anyone else involved that the word “negligent” might arguably be said only to modify “act”.

Accordingly, as a matter of the ordinary meaning of the words, “private” in the first sentence of clause 1 modifies “offering” and “other sale of equity instruments”. It follows that the defined term “Financing” only relates to private placements, private offerings and private sales. It does not extend to an FPO.

But that’s not how syntactic ambiguity works.

It might be unclear whether a modifier that precedes two or more nouns modifies all the nouns or only the first. Here’s an example from MSCD: Acme may sell in the Stores only children’s apparel, accessories, and footwear. What does children’s modify? Just apparel, or also accessories and footwear?

In referring to a “conventional understanding,” the judge is mistaken. For one thing, the examples he cites are worthless. The phrase every Tom, Dick, or Harry is an idiom—no one would ever inquire whether the phrase refers to every Tom but just a specific Dick and specific Harry. And negligent act or omission is a legalistic phrase that has become encrusted with a set meaning.

Instead, the way it works is that the preceding modifier modifies everything unless it doesn’t. In other words, unless someone is willing to argue that it doesn’t. When that happens, each of the alternative meanings is a possible meaning, unless the context suggests otherwise. The amount of digging required to establish whether the context favors one of the meanings can vary. At the simple end of the spectrum, if the language at issue is Her favorite foods are chocolate cookies, avocado, and goulash, presumably we can quickly conclude that the more natural meaning is that chocolate modifies just cookies.

In his opinion, the judge acknowledged the role of context:

This is necessarily a provisional view, because it is also necessary to consider the first sentence of clause 1 in the context of the contract as a whole and against the background of the overall context, including the factual matrix and broader considerations of business common sense. I do this under the series of headings that follow.

He would have done well to have dispensed with his ill-informed preamble and started there. I haven’t considered what the context suggests in this case—I was just interested in what was of general relevance.

This opinion is how discussion of ambiguity generally works. Because courts regard ambiguity as a matter that courts are equipped to resolve unaided, they feel entitled to make stuff up, as opposed to, say, considering that linguistics expertise would be relevant.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

5 thoughts on “Cantor Fitzgerald & Co v. YES Bank Limited: The Commercial Court Flubs Syntactic Ambiguity”

  1. “Private placement” is a term of art and in my view “private” in this context was never intended to modify anything.

  2. Very clear, thanks! As a side comment, the term “syntactic ambiguity” might be replaced by “amphibology” or “amphiboly” so as to remove the modifier and avoid any ambiguity when the term must be put in a list.

  3. I agree with your analysis. But permit the legal realistic in me to question what to do with it. I am a US barred lawyer, and, for what it is worth, former law clerk to a “textualist” judge. The problem is that judges have been told repeatedly by textualist proponents that a finding of ambiguity should be a last resort. In other words, that the meaning of a contract can almost always be deduced from the text. So it goes, they adopt a construction based on that philosophy.

    Judges decide cases, not litigants. Should lawyers therefore adopt the every Tom, Dick, and Harry line of reasoning, regardless of how the English language actually works?


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