May It Please The Court: Does "May" In An Arbitration Clause Convey Choice About Proceeding To Arbitration?

The difference between the mandatory "shall" and the permissive "may" in a contract is, perhaps typically, straightforward. One mandates action; the other allows, but does not require, it. This analysis can be more complex in the context of an arbitration agreement: can a party to the agreement force a stay of litigation based on a clause that states the parties may submit the dispute to arbitration? The Privy Council in Anzen Limited v. Hermes One Limited faced essentially this question, and, in part based on Ontario Court of Appeal jurisprudence, held that the answer is yes.

Background

The facts in Anzen may be briefly stated. The parties were shareholders in a business incorporated in the British Virgin Islands, Everbread Holdings Ltd., for the purpose of developing airline fare search software. They entered into a shareholders' agreement that contained an arbitration clause. The portion of clause 19.5, the arbitration clause, read: "If a dispute arises out of