Automatic evaluation of Machine Translation (MT) is typically approached by measuring similarity between the candidate MT and a human reference translation. An important limitation of existing evaluation systems is that they are unable to distinguish candidate-reference differences that arise due to acceptable linguistic variation from the differences induced by MT errors... In this paper we present a new metric, UPF-Cobalt, that addresses this issue by taking into consideration the syntactic contexts of candidate and reference words. The metric applies a penalty when the words are similar but the contexts in which they occur are not equivalent. In this way, Machine Translations (MTs) that are different from the human translation but still essentially correct are distinguished from those that share high number of words with the reference but alter the meaning of the sentence due to translation errors. The results show that the method proposed is indeed beneficial for automatic MT evaluation. We report experiments based on two different evaluation tasks with various types of manual quality assessment. The metric significantly outperforms state-of-the-art evaluation systems in varying evaluation settings. (read more)