An arbitration clause using “may” does not mandate arbitration or bar a civil suit.

The plaintiff filed a suit for specific performance concerning a registered Agreement of Sale dated 11 February 2020.

Defendant No. 1 applied under Section 8 of the Arbitration and Conciliation Act, 1996, relying on Clause 10 of the agreement, which provided that disputes “may” be referred to arbitration.

The trial court dismissed the application, holding that it was filed after the written-statement deadline had expired and the written statement had been taken as not filed.

Defendant No. 1 challenged that order in this revision petition.

Section 8(1) of the Arbitration and Conciliation Act, 1996 requires a party seeking reference to arbitration to apply no later than the date of submitting its first statement on the substance of the dispute.

The Court also considered the wording of Clause 10: a clause stating that parties “may” refer a dispute to arbitration does not compel them to do so.

The Court referred to M/s. Bhagyalakshmi Homes LLP v. Smt. Sulekha Verma and Others, Commercial Appeal No. 618/2025, and P. Tarachand v. Seshamal M. Jain and Others, 2019 SCC OnLine Kar 2768, in connection with the timing and waiver principles under Section 8.

It also noted Prasanna V. Ghotage v. Bharat Earth Movers Limited, W.P. Nos. 1187/2020 and 1133/2020, concerning belated invocation of arbitration and the conduct of a party.

The Court found that Clause 10 was permissive because it used the word “may”; it therefore did not make arbitration a compulsory prerequisite to filing the suit.

Independently, the Section 8 application was filed beyond the 90-day period relied on by the trial court, after the written statement had been taken as not filed.

The Court held that the application was therefore untimely under Section 8 and that the trial court was justified in dismissing it.

It dismissed the civil revision petition, upheld the trial court’s dismissal of the Section 8 application, and ordered that any pending interlocutory applications stand closed.