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Though Sri Lanka’s ease of doing business index is very low, the country has been promoted as a venue for arbitrations in the region and globally by the International Alternative Dispute Resolution Centre (IADRC) in Sri Lanka.
IADRC, Director, Shehara Varia on Thursday on the sidelines of a post- symposium meeting held at the World Trade Centre in Colombo told the Business Times, “Most commercial parties need a neutral venue to have their arbitrations. We are promoting Sri Lanka as a venue for arbitration in order to increase the contract enforcement index of Sri Lanka as the country’s ease of doing business index is very low. As an institution we wanted to increase the enforcement index and thus took the initiative to form the regional collective.”
Read more: Sri Lanka promoted as a global venue for commercial arbitration
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From left: Bangladesh International Arbitration Centre’s Saqueb Mahabub, International ADR Centre Sri Lanka Director General Dhara Wijayatilake, Pakistan Musaliha International Centre for Arbitration and Dispute Resolution Sarha Rasheed and International ADR Centre Sri Lanka Director Shehara Varia
The International ADR Centre, Sri Lanka (IADRC) held its annual ‘Regional Alternative Dispute Resolution Symposium 2024’ from 13 to 15 May.
The Symposium was organised in collaboration with the Commercial Law Development Program (CLDP) of the Department of Commerce, USA.
The Symposium was attended by members of the legal community and law students of Sri Lanka as well as experts from regional ADR Centres in Bangladesh, Hong Kong, Maldives, Malaysia, Mumbai, Nepal, Pakistan, Singapore and Thailand.
The resource persons included judges of the Supreme Court of Sri Lanka, representatives from the law firms of White & Case, Norton Rose Fulbright, Quinn Emanuel Urquhart & Sullivan and The Chambers, Washington DC.
Read more: IADRC holds ’’Regional Alternative Dispute Resolution Symposium 2024’’
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Sri Lanka has enacted the Recognition and Enforcement of International Settlement Agreements Resulting from Mediation Act, No. 5 of 2024, and will now proceed to deposit the instrument of ratification with the UN Secretary-General. In terms of Article 14.2 of the UNCITRAL Singapore Convention, the Convention will apply in respect of Sri Lanka six months after the date of depositing the instrument of ratification. This will be the same date that the Minister of Justice will, in terms of section 1(2) of the Act, certify by Order published in the Gazette as the date with effect from which the provisions of the Convention shall enter into force in respect of Sri Lanka.
The Act can be accessed at http://documents.gov.lk/files/act/2024/1/05-2024_E.pdf
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On January 10, 2024 the Sri Lankan Parliament passed the Recognition and Enforcement of international Settlement Agreements Resulting from Mediation Bill.
The Act seeks to give effect to the United Nations Convention on International Settlement Agreements resulting from Mediation known as the Singapore Convention on Mediation; to make Provisions for the Recognition and Enforcement of International Settlement Agreements; and to provide for matters connected therewith or incidental thereto.
Sri Lanka is now poised to ratify the Convention. In terms of the Convention, it will enter into force in respect of a State six months after ratification.
The Bill can be accessed at http://documents.gov.lk/files/bill/2023/10/389-2023_E.pdf
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Singapore International Mediation Centre (SIMC) in collaboration withThe International ADR Center, Sri Lanka organised a session on "Commercial Mediation - the Singapore Experience" on 7 December 2023, in Colombo.
SIMC’s CEO Wee Meng Chuan spoke about the development of mediation in Singapore, the Singapore Convention, the importance of clauses, and the mediating of complex commercial cross-border disputes. The session was moderated by Dhara Wijayatilake, Secretary General and Director of IADRC, Sri Lanka. The session was attended attended by senior lawyers, corporates, and professionals from Sri Lanka.
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The Enforcement of International Settlement Agreements Resulting from Mediation Bill was published in the Gazette of October 16, 2023. It is expected that Justice Minister Hon. Dr. Wijeyadasa Rajapakshe, P.C will present the Bill in Parliament soon and will hopefully receive the support of all political parties irrespective of party politics, to enact a statute that will be of benefit to Sri Lanka.
The Bill establishes a domestic regime to enforce international commercial settlement agreements that have resulted from mediation. The provisions are based on the principles of the UN Convention on International Settlement Agreements Resulting from Mediation adopted by the UN General Assembly in December 2018, and which came into operation on September 12, 2020. Sri Lanka signed the Convention when it opened for signature in Singapore on August 7, 2019. As at October, 2023, fifty-six (56) States including five of the six largest economies of the world, USA, China, Japan, India and UK, as well as South Korea which is one of the largest economies in Asia, have signed the Convention. Twelve (12) States have ratified the Convention, Singapore being one of the first and Japan being the most recent (October 1, 2023). Sri Lanka is poised to ratify the Convention after the enactment of the law. Known also as the Singapore Convention on Mediation, it is to international commercial mediated settlement agreements what the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) is to foreign arbitral awards.
Why was a Convention needed?
As at 2014, standards for the use of mediation for commercial dispute resolution were contained in the UNCITRAL Rules (1980) and a Model Law (2002). While these documents provided for procedural matters that could be adopted universally, they did not provide for cross border enforcement. The UNCITRAL Model Law of 2002 stated that “If the parties conclude an agreement settling a dispute, that settlement agreement is binding and enforceable” and left it to each State to include provision as to the method of enforcing the settlement agreement. The result was that, a party seeking to enforce the settlement agreement was required to pursue a civil action in a foreign court and be subjected to the laws of that country. This was a serious problem given the ensuing absence of uniformity to govern the enforcement process and the applicability thereby of different legal systems. This was identified as an impediment to the greater use of mediation because it was burdensome and time consuming. It was to address this concern that UNCITRAL commenced its work to simultaneously formulate the text for a Convention as well as a new Model Law, both of which were adopted in 2018.
International trade and business was booming aided also by technological advancements that facilitated cross border transactions. The contract enforcement regime for cross border trade and business needed to have meaningful options for better dispute resolution. The popularity of Mediation was growing due to its intrinsic features that recognized party autonomy, voluntariness to submit to and stay in the process, confidentiality, a wider array of options that served business interests as opposed to a right vs wrong approach. The process also offered the potential to be cost effective and to produce a faster resolution acceptable to all disputants. In the world of trade and business these were significant benefits. Many International Organisations had adopted their own Rules to govern the process and provide mediation services.
The Singapore Convention on Mediation seeks to facilitate international trade and commerce by providing a uniform framework for enforcement of mediated settlement agreements across borders. In its preamble the Convention noted that Mediation is increasingly used in domestic and international practice as an alternative to litigation and also considered that the use of mediation results in significant benefits such as reducing the instances where a dispute results in the termination of a commercial relationship and also that the use of mediation produces savings in the administration of justice by States.
When Singapore celebrated the Singapore Convention Week in August 2023, the Singapore International Mediation Center (SIMC) organized its signature event – MNCs for Mediation – From Disputes to Deal-Making” stating that “A good corporate governance framework should include redress to deal with disputes in a timely, cost-effective manner. Mediation lends itself well to this purpose as a management tool and demonstrates a strategic commitment to ESG (Environmental, Social and Governance) that extends beyond one’s products and services.” Forty two (42) MNCs and industry Associations from ten countries signed the Declaration of Intent to support Mediation. SIMC hailed the response stating that the business community has demonstrated that mediation is an appropriate and viable option for resolving commercial disputes.
The Sri Lankan Bill is faithful to the provisions in the Singapore Convention and incorporates the following key principles of the Convention –
- the Act will apply to Settlement Agreements that have been concluded by parties to resolve a commercial dispute, are in writing, are international in nature at the time of conclusion, and are the result of a mediated settlement.
- There is no definition of the term “commercial” as in the Convention. During its deliberations, UNCITRAL’s Working Group II agreed that a definition of the term “commercial” was not required in the Convention. The Model Law of 2002 and the new Model Law of 2018 contain the following, identical explanation in a footnote to Article 1(1):
‘The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.’
- A settlement agreement is “international” where at least two parties have their places of business in different States, or the State in which the parties have their places of business is different from either the State in which a substantial part of the obligations under the settlement agreement is performed or the State with which the subject matter of the settlement agreement is most closely connected. The term “place of business” is defined.
- The Bill sets out categories of disputes that are excluded from its scope in an exhaustive list. These are, settlement agreements in respect of disputes where one party to the transaction has been a consumer for personal, family or household purposes and disputes relating to family, inheritance, or employment law, and settlement agreements that have been concluded or recorded as a judgment of a court, in the course of judicial proceedings and are enforceable as a judgment of a court; or are enforceable as an arbitral award. The justification is that such judgments of court and arbitral awards have a defined enforcement procedure already.
- The Bill makes provision for a party to the settlement agreement to make an application to the High Court to seek relief , ie. to have the agreement entered as a decree of court. It’s also recognizes the admissibility of a settlement agreement where a matter that has been settled is included in litigation.
- The Bill provides for limited grounds on which an objection can be made to the grant of a decree. These are based on incapacity of a party, issues relating to the settlement agreement and issues resulting from a breach of applicable standards by the mediator. The court may also refuse to grant a decree if granting relief would be against the public policy of Sri Lanka or the subject matter of the dispute is not capable of settlement by mediation under the laws of Sri Lanka.
- Importantly, the Bill recognizes that every international settlement agreement shall be valid and enforceable unless a decree of the High Court has been refused and states that obligations assumed by parties under such an agreement shall be honoured as in any other contractual agreement.
The Singapore Convention deals only with how mediated settlement agreements can be enforced and not with any aspect of the mediation process. It must be emphasized that the Convention and hence the Bill does not apply to compel the use of mediation or to adjudicate on the terms of the settlement. Since the grounds for objecting to a settlement agreement are specified, the jurisdiction of the court is limited to awarding a decree or refusing one. The court does not assume jurisdiction to judge the validity or the correctness of the terms of the settlement.
Sri Lanka’s aspiration to emerge as an attractive destination for investment requires a concerted strategy to implement a broad based business environment. The efficacy of the contract enforcement regime needs to be addressed seriously. This is a challenge given that Sri Lanka’s performance in the past has been an issue. Dispute resolution must be efficient and effective. Litigation is woefully slow and costly. The culture around arbitration needs to improve. Investors will look to a comprehensive ecosystem that offers better dispute resolution options. Sri Lanka needs to work its way through some of the disadvantages that prevailed previously and which slotted the country in the lower positions of the Ease of Doing Business rankings.
A comprehensive ecosystem requires excellent ADR services, infrastructure facilities of a high standard to fulfill international expectations and Governmental policy commitment to support such efforts. Sri Lanka now offers commercial mediation services through the International ADR Center which also offers arbitration. The Center is a private entity and has world class facilities for the conduct of commercial arbitrations and mediations with access to experienced Arbitrators and Mediators from overseas as well, and conducts programs to create awareness regarding commercial mediation. The enactment of this Bill will showcase Sri Lanka as a country that is committed to creating a conducive environment for international trade and business.
Mediation for domestic dispute resolution
The Singapore Convention Bill will be supplemented by another Bill titled “Mediation (Civil and Commercial Disputes) Bill which is expected to be finalised soon. This Bill seeks to provide for a range of matters to set standards that must be observed throughout the mediation process. These include voluntariness to submit to mediation, party autonomy during the mediation, the non coercive role of the mediator, confidentiality and without prejudice rule. The Bill will also provide for standards of conduct that must be observed by mediators. It needs to be emphasized that the community mediation programme which has been implemented since 1988 and the establishment of Mediation Panels for the resolution of land and financial disputes, which are funded and managed by the State, is distinct from the scope of the envisaged new Bill and will not be affected.
Sri Lanka’s initiatives to promote mediation for commercial dispute resolution are being pursued at a time when other countries in the region, Singapore, Hong Kong, Malaysia, India, Bangladesh, Pakistan and the Maldive Islands have already made much headway in this regard.
Authored by Dhara Wijayatilake, Secretary General & Director IADRC
Further information on mediation services offered by the International ADR Center may be obtained via its website www.iadrc.lk
Correspondence on this subject may be addressed to
The newspaper publication can be accessed at
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The International ADR Center had the pleasure of hosting Mr Toby Landau KC for a thought-provoking discussion on the “Recent Approaches to Witness Evidence in International Dispute Resolution” on the 23rd of October 2023 at the Center premises.
Mr. Landau KC took the audience through the practice of international arbitration and expanded on the global practices currently adopted, which detract from the efficacies that were anticipated of ADR. While offering practical solutions on how to sustain efficiency in the arbitration process, he also stressed on the pressing need for changes in culture and shifts in mindset amongst those who participate in the arbitration process.
Mr. Landau KC discussed the practices adopted by counsel with regard to witness evidence, and emphasized the importance of providing authentic witness statements. Furthermore, he encouraged arbitrators to adopt an active case management style and to tailor evidentiary requirements according to the nature of each case.
He explained the often overlooked consideration of human memory and the role it plays in accurate information recall. He demonstrated the ease by which a witness’s memory of an incident could be influenced and the importance of factoring in such aspects when considering witness evidence.
Mr Landau KC is a Barrister, advocate, and arbitrator, and a member of the Bars of England & Wales, Singapore, New York, the BVI, and Northern Ireland, and is registered in the DIFC. He practises in London as a sole practitioner and in Singapore from Duxton Hill Chambers (Singapore Group Practice).
This discussion was organised with the support from the Justice Sector Project - JURE, funded by the European Union, jointly implemented by UNDP and UNICEF.
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The Symposium was held to create awareness about the value of Mediation as an effective commercial dispute resolution mechanism, and was graced by His Excellency Ranil Wickremesinghe, President of Sri Lanka, Hon. Wijeyadasa Rajapakse, P.C Minister of Justice, Prison Affairs and Constitutional Reforms, Hon. Justice Yasantha Kodagoda, P.C, Judge of the Supreme Court, Hon. Sanjay Rajaratnam, P.C , Attorney General and Hon. Anuruddha Jayaratne, State Minister of Prisons Affairs. The Symposium was attended by a host of legal personalities and members of the corporate sector.
His Excellency highlighted governments commitment to the International ADR Center and expressed support for its continued growth and urged the Ministry of Justice and the Ministry of Investment Promotion to collaborate and support the initiatives of the Center. His Excellency emphasized the need for a cultural shift towards efficient dispute resolution in Sri Lanka. He referred to the reality that we have a reliance on trial courts and stressed the importance of embracing alternative dispute resolution methods. The President stated that one of the challenges we face is to change the old way of using the trial court for every kind of dispute resolution, and that it’s necessary to find ways of adjusting to using alternative dispute resoltuion methods to resolve disputes. He said that there’s a need for a change of culture that enables disputes to be resolved in the shortest possible time.
Hon. Wijeyadasa Rajapakse, P.C Minister of Justice acknowledged the work of the Center spanning over four years, and expressed his appreciation of its achievements and pledged support to the Center. The Minister referred to the success of community mediation Boards citing that statistics show a 70% success rate. The Hon. Minister referred to the need to improve the practice of Arbitration. The Minister also referred to the initiatives taken by the Ministry of Justice to establish Special Mediation Boards to undertake land disputes and financial disputes.
The technical sessions of the Symposium discussed Commercial Mediation under two titles – (1) Being smart in resolving commercial disputes; and (2) The legal regime for commercial mediation. Hon. Justice Yasantha Kodagoda, P.C Judge ofnthe Supreme Court presented empirical evidence from cases decided by the Supreme Court over the immediate past months to demonstrate that opting to litigate is not a smart decision always and that judicial adjudication should be opted for, only if, after careful consideration it’s deemed to be the most appropriate mechanism. The next session discussed the legislation being drafted to complete a vital component required to establish a comprehensive eco system for the use of mediation.
The afternoon session featured the enactment of a Mediation to resolve an intellectual property dispute between two manufacturers. The role play demonstrated the different stages of the mediation process and highlighted the skills and techniques used by the mediator to assist parties to resolve a dispute.
Support for the Symposium was received from The Asia Foundation through the UNDP’s JURE project funded by the European Union.
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The Symposium seeks to create awareness about the value of Mediation as an effective commercial dispute resolution mechanism.,
The Symposium will discuss the growth of Mediation globally, Sri Lanka’s progress to create a comprehensive ecosystem to offer better dispute resolution options to the business and investor community and pending domestic legislation.
One session will feature the enactment of a Mediation to resolve a commercial dispute and will highlight the key features of Mediation and the skills and techniques used by a Mediator to assist parties to resolve disputes.
The Symposium will be addressed by His Excellency Ranil Wickremesinghe, President of Sri Lanka, Hon.Dr. Wijayedasa Rajapakse, P.C., Minister of Justice, Prison Affairs and Constitutional Reforms, Hon. Justice Yasantha Kodagoda, Judge of the Supreme Court, Dr. K. KanagIsvaran, PC., and a host of other eminent persons.
The Sympoisum is being held with support from The Asia Foundation under the UNDPs Support to Justice Sector Project (JURE) funded by the European Union.
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Local entities will have improved access to alternate dispute resolution with the Ceylon Chamber of Commerce (CCC) ICLP International ADR Centre (IADRC) entering into a cooperation agreement with the Hong Kong International Arbitration Centre (HKIAC).
The corporation agreement was inked by HKIAC Deputy Secretary General Eric Ng - Deputy and IADRC Secretary General & Director Dhara Wijayatilake.
The corporation agreement is the first of its kind for the IADRC. However, in the pipeline are three more agreements of similar nature with other international arbitration centres. “We will be collaborating our efforts and sharing experiences and best practices. Arbitration is growing in the region and Sri Lanka will stand to benefit from the partnership,” said Wijayatilake commenting on the partnership.
While the Sri Lanka centre already extends dispute resolution to the business community, the inked agreement would help investors view the island nation as a business-friendly destination, she added.
Sri Lanka will soon be able to offer comprehensive mediation and the drafting of the legislation for the same is underway.
The Singapore convention in this regard is already inked, said Wijayatilake.
Meanwhile, Ng noted that Sri Lanka has the potential to be the arbitration hub for the South Asia region and the cooperation with HKIAC is a step in allowing it to realise its potential.
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The CCC-ICLP International ADR Centre (Guarantee) Limited, a joint venture initiative of the Ceylon Chamber of Commerce (CCC) and the Institute for the Development of Commercial Law and Practice (ICLP) opened its ADR Centre at the World Trade Centre, Colombo.
The International ADR Center at WTC Colombo is currently the only institution in Sri Lanka that provides alternative dispute resolution services that include arbitration, mediation, and negotiation for the resolution of commercial disputes.
“We’re ready to provide world class services at our center at the World Trade Centre, Colombo, an internationally recognised business address that houses the largest business to business network under one roof.
Our selection of the WTC was because of its unique location with proximity to the facilities that users look for.
The centre at WTC is well equipped and offers Arbitration and Mediation services for commercial dispute resolution. We have our own rules and codes of conduct that are modeled on internationally accepted standards and a panel of accredited service providers,” said Dhara Wijayatilake, Secretary General of the Centre.
Uniquely located in the heart of the Central Business District, the twin towers of the World Trade Centre comprise 39 floors each housing 750,000 sqft of prime “A” Grade office space. The WTC Colombo is the exclusive license holder for the global trademarks “World Trade Centre” and “WTC” owned by the World Trade Centre’s Association providing an exceptional platform for business and networking opportunities.
“We are excited to welcome the International ADR Centre to our prestigious list of tenants at the WTC Colombo and provide an opportunity to experience state-of-the-art facilities and services to enhance their business performance,” said Pravir Samarasinghe, Group Director /CEO of Overseas Realty (Ceylon) PLC.
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The Colombo Port City Economic Commission (the "Commission") is proud to announce a significant milestone in its mission to establish the Colombo Port City special economic zone, as a globally competitive business environment. In line with the Colombo Port City Economic Commission Act, the Commission entered into an agreement with the International ADR Centre (IADRC), fulfilling the statutory requirement of establishing an independent International Commercial Dispute Resolution Centre (ICDRC) within the Area of Authority.
Section 62 of the CPCEC Act requires the Commission to facilitate the establishment of an ICDRC for the purpose of resolving disputes between the Commission and Authorised Persons and Residents of the Port City. The IADRC is currently engaged in providing ADR services including training of arbitrators and mediators, has its institutional rules for the conduct of ADR processes, and is a joint venture between the Ceylon Chamber of Commerce (CCC) and the Institute for the Development of Commercial Law and Practice (ICLP). The IADRC will maintain its Colombo Port City office at its Secretariat on the 22nd Floor of the West Tower of the World Trade Center Building, Echelon Square, Colombo 01, until relocated to the Colombo Port City as infrastructure permits.
The Commission, as the Single Window Investment facilitator is confident that these key measures will strengthen investor confidence and position Sri Lanka as a significant contributor to the service export industry within the region.
This partnership was achieved with the support of the Ministry of Justice, Prison Affairs and Constitutional Reforms, Ministry of Finance, Economic Stabilization & National Policies, and the Ministry of Investment Promotion.
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