The Grammar Of Justice: Does ‘Can’ Mean ‘Must’ In The World Of Arbitration?

In the intricate dance of international commerce, a single word can be the difference between a swift resolution and a decade-long courtroom drama. In the landmark judgment of Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. (2026), the Supreme Court of India was forced to play the role of a linguist.

The question was deceptively simple: When a contract says parties “can” settle disputes via arbitration, is it a binding mandate or merely a polite suggestion?

The Anatomy of a Dispute: From Aluminium Foils to Legal Foils

The case began with a straightforward commercial transaction. Nagreeka Indcon, a manufacturer of aluminium containers, contracted Cargocare Logistics to transport goods to the USA.

When a dispute arose over a “bill of lading” and a missing payment of approximately USD 28,000, Nagreeka pointed to Clause 25 of their agreement to demand arbitration. The clause read:

“The contract evaluated hereby or contained herein shall be governed by and construed according to Indian Laws. Any difference of opinion or dispute thereunder can be settled by arbitration in India or a place mutually agreed with each party appointing an arbitrator.”

While Nagreeka viewed this as a clear green light for an arbitral tribunal, Cargocare saw it as a yellow light — an option that required mutual consent at the time of the dispute.

The High Court agreed with Cargocare, leading the manufacturer to appeal to the highest court in the land.

The Linguistic Litmus Test: Capacity vs. Mandate

Justice Sanjay Karol’s judgment serves as a masterclass in Legal Linguistics. The Court delved into the etymology and dictionary definitions of the word “can,” contrasting it with the heavyweights of legal drafting: “shall” and “may.”

The Court noted that while “shall” signals a mandate, “can” merely flags a potentiality. By using “can,” the parties acknowledged that arbitration was an available route, but they did not close the door on other avenues, such as Civil Courts.

The Doctrine of Party Autonomy

A fundamental pillar of Alternate Dispute Resolution (ADR) is Party Autonomy. The Court emphasized that arbitration is a creature of contract; it exists only because parties voluntarily surrender their right to go to a public court.

The Court invoked the Latin maxim Ex praecedentibus et consequentibus optima fit interpretatio — the best interpretation is made from the context.

Justice Karol reasoned that if the Court forced a party into arbitration based on a vague “can,” it would be “imputing an obligation” that was never intended. To be valid, an arbitration agreement must disclose a determination and obligation, not just a “tentative arrangement to explore” the idea.

The Seven-Point Checklist: What Makes an Arbitration Clause Binding?

The judgment reiterated the essential attributes of a valid arbitration agreement, drawing from the classic K.K. Modi and Jagdish Chander precedents:

1. Binding Nature: The decision must be final.
2. Consent-Based: Jurisdiction must derive from the parties’ clear agreement.
3. Substantive Rights: The tribunal must determine actual legal rights.
4. Impartiality: The process must be judicial and fair.
5. Enforceability: The intent to refer must be enforceable by law.
6. Formulated Dispute: The agreement should cover existing or future disputes.
7. Obligation (The “Golden Rule”): The language must show a “must,” not a “maybe.”

The Final Verdict: A Lesson for Drafters

The Supreme Court dismissed the appeal, holding that Clause 25 was not a binding arbitration agreement. Because the clause only indicated a “future possibility” of arbitration, it required a fresh agreement between the parties once the dispute actually arose.

Since Cargocare refused to agree, the “can” remained a mere possibility that never became a reality.

The Takeaway for the Legal Community

For law students and practitioners, this case is a stark reminder of the “Doctrine of Precision.” In the world of 2026 commerce:

• If you want a mandate, use “Shall.”
• If you want a choice, use “May.”
• If you use “Can,” you are merely inviting a future argument about whether you actually meant anything at all.

This judgment reinforces that the Supreme Court will not rescue a party from “shabby drafting.” Justice, in this instance, was found in the literal dictionary, proving that sometimes, the most powerful tool in a lawyer’s arsenal is a firm grasp of basic grammar.

For more details, write to us at: contact@indialaw.in

Reference

[2026 INSC 384] NAGREEKA INDCON PRODUCTS PVT. LTD. Vs. CARGOCARE LOGISTICS (INDIA) PVT. LTD.