In Interconnected Agreements, Use Of Word 'May' Does Not Defeat Clear Intention To Arbitrate In Main Agreement: Telangana High Court

The Telangana High Court has clarified the interpretation of arbitration clauses in interconnected agreements. The court ruled that if the main agreement between parties contains a clear and mandatory arbitration clause (using the word "shall"), this intention to arbitrate will prevail even if an ancillary or related agreement uses a permissive word like "may" in its dispute resolution clause. The court held that the agreements must be read together to understand the true commercial intent of the parties. When the main contract clearly establishes arbitration as the chosen method for dispute resolution, a less definitive clause in a secondary document cannot be used to defeat that clear intention. This ruling ensures that the primary dispute resolution mechanism agreed upon by the parties is given effect, preventing one party from avoiding arbitration by relying on ambiguous wording in a related agreement.