‘May’ means ‘must’ in arbitration clause

Anzen Ltd and Others v Hermes One Ltd (British Virgin Islands) [2016] 1 Lloyd’s Rep 349, [2016] UKPC 1, 18 January 2016

The Privy Council had to determine whether proceedings started in the BVI court should be stayed in favour of arbitration, in light of a clause providing that in the event of an unresolved dispute, “any party may submit the dispute to binding arbitration”. Three possible analyses were put forward: (i) the clause was exclusive, so that any dispute between the parties had to be submitted to arbitration; (ii) the clause was purely permissive, so that a party could either litigate or arbitrate, but the other could then submit the dispute to arbitration and that would then require the dispute to be arbitrated rather than litigated; or (iii) where litigation had been commenced by one party, that party could be required to submit the dispute to arbitration by either a request or by an application for a stay.