In Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. (2026 INSC 384, decided 17 April 2026, Justices Sanjay Karol and N.K. Singh), an application to appoint an arbitrator under Section 11 had been dismissed by the Bombay High Court. The clause provided that disputes "can be settled by arbitration."
The Supreme Court upheld that approach. It held that the word "can" denotes possibility, not compulsion — it describes arbitration as an available option, not a binding obligation. The word "shall", by contrast, signals obligation. Doubt is resolved in favour of arbitration only where the parties actually intended to arbitrate.
Why it matters: many older contracts use loose language such as "may", "can" or "could be referred to arbitration." After this ruling, such clauses are at real risk of being treated as no arbitration agreement at all, leaving the parties to ordinary civil litigation.
The practical takeaway: review your standard contracts now. If you intend disputes to go to arbitration, the clause should say that disputes "shall be referred to and finally resolved by arbitration", together with the seat, the number of arbitrators and the institution or appointment mechanism.
This note summarises the reported judgment for general information and is not legal advice on any specific matter.