Arbitration clause, further consent necessary.

Wellington Associates Ltd. v. Kirit Mehta, (2000) 4 SCC 272, the Supreme Court dealing with interpretation of an arbitration clause has held that an 'arbitration agreement' "… postulate an agreement which necessarily or rather mandatorily requires the appointment of an arbitrator/arbitrators. [It] does not cover a case where the parties agree that they "may " go to a suit or that they 'may' also go to arbitration".  

P. Gopal Das v. Kota Straw Board, AIR 1971 Raj 258, it was held by the Rajasthan High Court that the use of the word 'may' indicated that a fresh consent of both parties for arbitration was necessary, and may not constitute a binding arbitration clause. 

Jindal Exports Limited v. Fuerst Day Lawson Ltd, MANU/DE/3204/2009 decided on December 11, 2009, the Delhi High Court has held that "mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as "parties can, if they so desire, refer their disputes to arbitration" or "in the event of any dispute, the parties may also agree to refer the same to arbitration" or "if any disputes arise between the parties, they should consider settlement by arbitration" in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future." However, please note that each arbitration clause is unique and therefore, it is not necessary that the use of the word 'may' would necessarily be construed as a non-binding arbitration clause.