Arbitration “Can”, Arbitration Can’t!
Anant Ratnaparkhi, Practicing Advocate, Indore (M.P.), India.
ABSTRACT
Recently the Hon’ble Supreme Court of India (“Supreme Court”) has considered and interpreted the use of word “can” in an arbitration clause. In law, words like “can”, “may” are considered to be permissive while “shall” mandatorily binds the parties. The Courts have time and again held that the intention of the parties to refer a dispute to arbitration must be clearly spelt out.
The judgement in Nagreeka Indcon Products Private Limited vs. Cargocare Logistics (India) Private Limited, is one such judgement, where the Supreme Court has recently held that the intention to arbitrate must be clear and not merely a possibility. However, the arbitration clause in the judgement of Nagreeka Indcon Products Private Limited vs. Cargocare Logistics (India) Private Limited has an alternative interpretation. The arbitration clause in Nagreeka Indcon Products Private Limited vs. Cargocare Logistics (India) Private Limited makes arbitration mandatory only leaving the option of place of arbitration with the parties. Even when the arbitration clause fails to provide for clear procedure for appointment of arbitrator/(s), the appointment can be done in terms of the Arbitration and Conciliation Act 1996.
