Jetpack proofread produces error

I have updated Jetpack to version 3 and proofreading module now produces an error:
GENERAL
500
At: http://www.testbed.biz/wp-admin/admin-ajax.php?action=proxy_atd&_wpnonce=8d69e0d6b1&url=/checkDocument

I have disabled all the plugins except Jetpack and also switched to Twenty Fourteen theme and the problem persists.

Even before this, proofreader would highlight words or phrases but clicking on it would not produce the suggestion/action list.

Cemal