Permissive arbitration clause held non-binding where it showed only a future possibility, not a present obligation to arbitrate.

A dispute resolution clause stating that disputes "can be settled by arbitration" was held not to create a binding arbitration agreement. Read in context, the word "can" denoted a mere possibility and not a present, enforceable obligation to arbitrate; the clause therefore lacked the clear determination required for arbitration. Because submission to arbitration remained contingent on further agreement, the clause did not satisfy the essentials of an arbitration agreement and could not mandate reference of disputes to arbitration. The refusal to appoint an arbitrator was accordingly sustained.

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Issues: Whether a dispute resolution clause stating that disputes "can be settled by arbitration" constitutes a binding arbitration agreement, or whether it only indicates a future possibility requiring further consent.

Analysis: The operative words of the clause were read in their contractual context. The use of "can" was held to denote possibility rather than obligation, and the clause did not evince a clear, present and enforceable agreement to arbitrate. Applying the settled requirements of an arbitration agreement, the clause had to disclose a determination to submit disputes to arbitration and not merely a hope or tentative arrangement to do so in future. Since the language left arbitration contingent on further agreement, the clause did not satisfy the essentials of a binding arbitration agreement.

Conclusion: The clause was not a binding arbitration agreement and did not mandate reference of disputes to arbitration.

Final Conclusion: The appeal failed and the refusal to appoint an arbitrator was sustained.

Ratio Decidendi: A dispute resolution clause that merely permits disputes to be settled by arbitration, without evincing a clear obligation to arbitrate, is only an agreement to consider arbitration in future and not an enforceable arbitration agreement.

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