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The use of "may" in an arbitration provision does not create a post-dispute right in either party to resist arbitration, but instead creates a right in either party to insist on arbitration, according to a federal district court in Florida.
In Conax Florida Corp. v. Astrium Ltd., No. 8:07-CV-76-T-TGW, 2007 WL 2083582 (M.D. Fla., July 18, 2007), Conax and Astrium entered into a contract for the production of satellite equipment, which contained an arbitration provision stating that any claim "arising out of" or "relating to" the contract "may be finally settled by arbitration."
A dispute arose over the scope of damages stemming from the production of defective parts. In accordance with the agreement, the parties first attempted mediation, which failed. Conax then filed suit against Astrium for a declaratory judgment on the scope of its liability. Astrium then filed a motion to stay proceedings and compel arbitration.
The Court looked to the language of the arbitration provision, and held that the use of "may" was not to be interpreted as preserving a party's right to avoid arbitration. Instead, the Court held that the use of "may" created "in either party the right to insist on arbitration," noting that this interpretation was consistent with the holdings of other courts, including the United States Supreme Court.
While the Court acknowledged that using "may" arguably created some ambiguity in the provision, any ambiguity was resolved by the strong presumption that ambiguities are to be construed in favor of arbitration. The Court was also persuaded by the fact that a permissive interpretation of the provision would have rendered the provision illusory, because the parties could agree to arbitration at any time post-dispute whether such a provision was included in or excluded from the contract. Accordingly, the Court granted Astrium's motion to compel arbitration.
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