21. Does clause 5 amount to an arbitration clause as defined in
Section 2(b) read with Section 7? I may here state that in most
arbitration clauses, the words normally used are that
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“disputes shall be referred to arbitration”. But in the case before me,
the words used are “may be referred”.
22. It is contended for the petitioner that the word “may” in clause 5
has to be construed as “shall”. According to the petitioner’s counsel,
that is the true intention of the parties. The question then is as to
what is the intention of the parties. The parties, in my view, used the
words “may” not without reason. If one looks at the fact that clause 4
precedes clause 5, one can see that under clause 4 parties desired
that in case of disputes, the civil courts at Bombay are to be
approached by way of a suit. Then follows clause 5 with the words “it
is also agreed” that the dispute “may” be referred to arbitration
implying that parties need not necessarily go to the civil court by way
of suit but can also go before an arbitrator. Thus, clause 5 is merely
an enabling provision as contended by the respondents. I may also
state that in cases where there is a sole arbitration clause couched in
mandatory language, it is not preceded by a clause like clause 4 which
discloses a general intention of the parties to go before a civil court by
way of suit. Thus, reading clause 4 and clause 5 together, I am of the
view that it is not the intention of the parties that arbitration is to be
the sole remedy. It appears that the parties agreed that they can “also”
go to arbitration in case the aggrieved party does not wish to go to a
civil court by way of a suit. But in that event, obviously, fresh consent
to go to arbitration is necessary. Further, in the present case, the
same clause 5, so far as the venue of arbitration is concerned, uses
the word “shall”. The parties, in my view, must be deemed to have
used the words “may” and “shall” at different places, after due
deliberation.