The use of 'may' in arbitration agreements indicates optionality rather than obligation, requiring mutual consent for arbitration to be valid.

ORDER :

SUBODH ABHYANKAR, J.

1] This Arbitration Case has been filed by the applicant under Section 11 (6) of the Arbitration and Conciliation Act, 1996, for appointment of Arbitrator.

2] In brief, the facts of the case are that the petitioner-a company registered under the Companies Act,1956 entered into an Agreement dated 30th of June, 2017 (Annexure P/1), for supply of solar generated electricity to the non-applicant Ms. Ashok Fine Spun (A unit of Mahima Fibres Pvt. Ltd.).

3] Admittedly, a dispute has been arisen between the parties in respect of the outstanding amount of Rs.5,22,84,012/- which is due to the non-applicant, and according to the applicant, despite repeated requests, the amount has not been paid by the non-applicant, and lately, a legal notice dated 09.8.2023 (Annexure P/13) was also served on the non-applicant for appointing Arbitrators as per clause 14.7 of the Agreement which refers to the dispute resolution.

4] A reply to the notice has also been sent by the non-applicant traversing all the contentions, and thus, the present application has come to be filed for appointment of an Arbitrator, as per clause 4.7 of the Agreement.

5] A reply to the present application has also been filed by the non-applicant, denying that there was an arbitration agreement what is contended by Shri Dheeraj Singh Panwar, learned counsel appearing on behalf of the non-applicant is that in the aforesaid dispute resolution clause, the arbitration was optional, and since the non-applicant has already refused to settle the dispute through Arbitration, there is no question of appointing any Arbitrator.

6] Counsel has submitted that the arbitration clause provides that the Party may refer the dispute for resolution to a panel of three Arbitrators, and thus, a choice is given to the parties either to refer the matter to the Arbitration or to decide otherwise. Thus, it is submitted that no case for appointment of an Arbitrator is made out, and the application is liable to be dismissed.

7] In support of his submissions that the arbitration clause is not mandatory, Shri Panwar has also relied upon the decision rendered by the Bombay High Court in the case of GTL Infrastructure Ltd. vs Vodafone Idea Ltd.(VIL), passed in Commercial Arbitration Application No.52 of 2022, reported (2023) 1 HCC (Bom) 1 wherein, the Court has discussed in detail the various judgments of the Hon'ble Supreme Court governing the field and has come to a conclusion that the use of word "may" in an agreement cannot be treated as "shall" for referring the parties to the Arbitration, as the parties have mutually agreed that they may refer the dispute to the Arbitration.

8] Shri Panwar has also relied upon the decision rendered by the Supreme Court in the case of Wellington Associates Ltd. vs. Kirit Mehta reported as (2000) 4 SCC 272 , which judgment has also been relied upon by the Bombay High Court in the case of GTL Infrastructure Ltd. (supra).

8] In rebuttal, Shri Raghvendra Singh Raghuvanshi, learned counsel appearing on behalf of the applicant has submitted that the aforesaid judgment is distinguishable as in the present case, the Arbitration clause clearly provides that it is only the time to resolve the dispute on their own that can be extended by mutual agreement and not the reference to the Arbitration.

9] Heard the learned counsel for the parties and also perused the record.

10] From the record, it is apparent that the Agreement dated 30.06.2017 contains a dispute resolution clause 14.7, which reads as under:-

14.7 DISPUTE RESOLUTION

"If any dispute, difference or claim arises between the Parties hereto in connection with this Agreement or the validity, interpretation, implementation or breach of this Agreement or anything done or omitted to be done pursuant to this Agreement, the parties shall make a good faith effort in the first instance to resolve the same through negotiation. If the dispute is not resolved through negotiation within (3) days after commencement of di