Many dispute resolution clauses say that a dispute "must" be referred to mediation or arbitration as opposed to court, however, a clause which says that a dispute "may" be referred to mediation or arbitration was considered by the Privy Council in Anzen Ltd v Hermes One Ltd [2016] UKPC 1.

The Privy Council ruled that there is a clear difference between "must" and "may".  If a contract says that "any party may submit a dispute to binding arbitration" then that party has a right, but not an obligation, to arbitrate - the party can instead choose to bring court proceedings.  However, if one party does bring court proceedings and the other wants to stop the proceedings and require the other party to bring an arbitration instead, according to the Privy Council, it is not too late to force that party to take a different route. 

The Privy Council ruled that both parties have an option to require arbitration and can do so before or after proceedings have commenced.  It found that the clause contemplated a consensual approach, and a mutual agreement to arbitrate fitted that approach.  The position being that a clause which entitles either party to elect arbitration (but provides for litigation otherwise) is a valid arbitration agreement once that option is exercised, by starting arbitration.  However, where Anzen goes further is that it confirms that merely invoking arbitration (without actually commencing it) can be enough to make the arbitration agreement binding.  We take from Anzen that the scope for disputes and about disputes clauses can be significantly reduced if the clause, instead of using permissive language such as "may", uses clear and mandatory wording, such as "must".

See Court decision here.