Features
New mediation law for smarter dispute resolution of civil and commercial disputes – I
The Mediation (Civil and Commercial Disputes) Bill was passed by the Parliament on Thursday, June 11, 2026. Harshana Nanayakkara, Minister of Justice and National Integration, introduced the Bill, and explained its provisions and value for Sri Lanka and global developments in the use of mediation. Encouragingly, it was passed unanimously.
Sri Lanka’s commitment to provide legislative support for the use of mediation is timely and most welcome. Given that the backlog of cases pending before courts is over a staggering 1.1 million, it is clear that Sri Lanka is yet another country that remains challenged to find responses to make dispute resolution more efficient. The impact of laws delays is serious and damaging not only to the disputants personally, but also for businesses and the economic development of the country. The delays in concluding cases impacts the economy adversely, both directly and indirectly, but are often seen only as an access to Justice concern. This is unfortunate. In many jurisdictions across the globe, alternative dispute resolution processes (ADR), such as mediation, have been introduced to alleviate laws delays. While Sri Lanka enacted legislation (1988) to provide for mediation in respect of minor community disputes of a low monetary threshold, the enactment of the new law heralds a commitment to provide for the recognition of a disciplined regime for its use for higher value civil and commercial disputes.
The new law provides for the recognition of mediation as a dispute resolution option that can be voluntarily selected by parties, and for a governance regime to ensure that mediations are conducted in compliance with certain standards which are globally accepted. It provides statutory recognition to the principle that a mediated settlement agreement that has been signed by the disputants, is valid in law. It does not provide for any management control by government or establish entities. In addition to the voluntary reference by parties, a court can also refer a dispute in an action before it, to mediation, at its discretion, after considering all circumstances and if considered appropriate. The voluntary nature of the process is not affected because, while the court can refer the dispute to mediation and the parties must then engage in the mediation, there is no compulsion for the parties to settle against their will.
The law sets out the obligations of Mediators, disputants and the Service Provider. Certain categories of disputes cannot be referred to mediation. These are disputes the settlement of which requires the inclusion of terms that can be given effect to, only on a decree of court, such as the termination of a marriage or a declaration of nullity of marriage or the adoption of a child or the partition of land to obtain rights in rem. A schedule sets out eleven (11) categories of actions that cannot be settled by mediation. However, matters relevant to such disputes may be mediated for the purpose of submitting terms of settlement to court for consideration of incorporation in a judgement, decree or order in compliance with applicable law.
The new law also provides that in a mediation, certain key principles of the process must be complied with. These include the confidentiality and the without prejudice rule in respect of matters discussed at the mediation; the rule that Mediators must be neutral and impartial; the party centric nature of the process that provides primacy to the wishes of the disputants including that it is they that determine the outcome and that a settlement is reached only if all disputants agree to the terms; the noncoercive role of the mediator whose duty is to facilitate and manage the process using mediation specific skills and techniques, but is debarred from imposing a decision. Although a settlement agreement is valid in law, provision is included to obtain a decree of court, based on the terms of the settlement. A mediated settlement agreement can be set aside on an application made to court, on specific limited grounds which are provided for, including that it is offensive to the public policy of the country. If the parties are unable to agree on a settlement, a certificate of non-settlement is issued. The provisions of the law are based on international best practices and principles articulated in the 1988 UN Mediation Convention (the Singapore Convention) and the UNCITRAL model law.
The popularity of mediation has grown for its value in being time efficient, cost effective and party centric. Parties have control over the outcome and have the space to discuss their concerns, fears and interests and need never agree to settle unless fully satisfied that settlement terms address their interests. Disputants are free to walk out of a mediation process at any time, if dissatisfied with the progress. The discussions are confidential and a valuable feature is that the process offers an opportunity to reduce acrimony which is prevalent in most disputes, and to restore fractured relationships which is very important in family and business related disputes. This benefit and the prospects for governments to reduce the cost of the administration of justice, by using mediation, is articulated in the preamble to the 2018 UN Convention on International Settlement Agreements Resulting from Mediation (2018) which states that the use of mediation results in significant benefits.
Pursuant to the interest generated within the country regarding the value of using Mediation for commercial dispute resolution, and heralding what we like to see as the initial steps of a Mediation boom in the country, several positive advancements have taken place –
* Parties have opted to include mediation in the dispute resolution clause in contracts;
* Given that mediating disputes requires very specialised techniques and skills, many professionals, including predominantly Lawyers, have engaged in training programmes offered by international training bodies that offer accreditation;
* Trained Mediators are engaged in an effort to form themselves as a professional Organisation;
* Mediation Advocacy training programmes have been held to train Lawyers on their niche role in the mediation process. That role is distinctly different to that of a court Lawyer who’s obligations are centred on an adversarial approach where the dispute is adjudicated in terms of the law alone. Hence lawyers need training to be useful within a non-adversarial process which is party centric and has a focus on reaching a settlement, based on the interests of disputants.
* Sri Lanka enacted the Recognition and Enforcement of International Mediated Settlement Agreements Act No. 5 of 2024 (the UN Mediation Convention Act) and ratified the Convention becoming the 14th country to do so. Sri Lanka will be seen as an investor friendly country in respect of dispute resolution where mediation is used, since it offers an enforcement regime which is recognised universally.
* The landmark determination of the Supreme Court (SC SD 22 of 2025) in the challenge by the Bar Association to the constitutionality of the Mediation (Civil and Commercial Disputes) Bill, found that none of the provisions of the Bill were unconstitutional and gave a judicial sign off to statutory provisions that seek to ensure that mediation services are provided in this country, in a disciplined manner in compliance with universally accepted standards.
* Perhaps, inspired by the statutory obligation imposed on judges to attempt pretrial settlement of disputes, in terms of the Small Claims Court Act and the Small Claims Court Procedure Act (both of 2022) and the Civil Procedure Code provisions on Pretrial Conference and Pretrial Orders, 125 District Judges were recently trained (with support from the ADB) in Mediation. The training provided a dual benefit – it provided training in skills that are required to settle disputes and equally importantly, provided a comprehensive understanding of how mediation will function when judges themselves refer disputes for settlement by private mediators.
* Trained Mediators are already conducting mediations with success.
* A not-for-profit guarantee company, the International ADR Centre – www.iadrc.lk ) was established in 2018 as a joint venture of the Ceylon Chamber of Commerce and the Institute for the Development of Commercial Law & Practice (ICLP) to promote ADR and is actively engaged in promoting mediation through training, disseminating information and creating awareness among stakeholders, including the business sector. In addition to the International ADR Centre, “Udecide” is a project that promotes training of mediators and other activities that enrich the mediation culture.
* Commercial Mediation has been included in the Masters level programme at the Colombo University;
* The Sri Lanka Law College offers a component on Mediation in the Post Attorney Diploma programme, which commenced recently.
The private sector was actively engaged in the drafting of the Mediation Bill under the leadership of the International ADR Centre, which held many stakeholder consultations to obtain feedback from those that were conversant with the subject. The Centre had previously assisted the government to draft the UN Mediation Convention Act (Act No. 5 of 2024).
Several international Organisations that previously provided for resolution of disputes by arbitration, have provided for institutional rules to provide mediation services. These include WIPO and the ICC. Specifically, in relation to Investor State dispute resolution (ISDR), the International Bar Association (IBA) adopted its Mediation Rules in 2012 and ICSID (of the World Bank group) adopted its Mediation Rules in 2022. UNCITRAL, which is currently working on reforming ISDR, promotes mediation, observing that the use of mediation could reduce the costs of ISDS and also preserve relationships between the investor and the State. UNCITRAL has formulated provisions on and Guidelines for, Mediation for investor state dispute resolution.
(To be continued)
by Dhara Wijayatilake
Attorney-at-Law; Former Secretary to the Ministry of Justice; Director and Secretary General of the International ADR Centre.
Features
Trump’s tariffs, AKD’s gazette and Sri Lanka’s diplomatic slumber
“We are rather respectable in Colombo. We go to bed fairly early, and we remain there till morning. “
According to Sri Lanka’s diplomatic folklore, the late S.W. R. D. Bandaranaike uttered these words while explaining the reasons for Sri Lanka’s abstention on the UN resolution condemning the Soviet invasion of Hungary. Apparently, SWRD’s foreign ministry officials were asleep at home when the diplomatic cable seeking instructions was received from New York. In those days, there were no cell phones, Internet, or even fax or telex machines. The diplomatic cables were sent through post offices. Decoding them was a slow and time-consuming process. Thus, the government could not provide appropriate instructions to our mission in New York in time, and the Sri Lankan delegation abstained on that sensitive UN vote.
Sri Lanka’s Absence from Section 301 Consultations
But then, how does one explain Sri Lanka’s absence from the crucial bilateral consultation held in Washington by the Office of the United States Trade Representative (USTR) during March-April on “Forced Labour” under the Section 301 of the US Trade Act of 1974? Didn’t our foreign and trade ministries send appropriate instructions to Washington in time? Even if the instructions from the foreign ministry were transmitted to our embassy in Washington by pigeon carriers, there was enough time for Sri Lanka to participate in those meetings.
In March, the USTR initiated these 301 investigations on 60 trading partners, and invited all of them for confidential consultations. Out of the 60, 46 participated in these consultations. Sri Lanka was not one of them. Other countries that didn’t participate in these consultations included China, Russia, and Venezuela! In addition to that, the Section 301 Committee conducted a public hearing with interested parties on April 28 and 29. Washington-based diplomats, representatives from few trade ministries as well as representatives from many foreign trade associations and chambers participated in these hearings. Sri Lanka was once again conspicuously absent.
As a result, when the USTR published the proposed forced labour tariffs on June 2nd, Sri Lanka ended up with a 12.5% duty. Pakistani and Indonesian diplomats participated in these consultations and took appropriate follow-up measures, and managed to enter the 10% duty category. As even a threat of a modest tariff hike could disrupt supply chains and reduce competitiveness, particularly in an industry such as garments, I discussed this issue on 15 June and underscored the importance of Sri Lanka’s participation at the next hearing, which was scheduled to be held from July 7th .
Awakening from Diplomatic Slumber and AKD’s Gazette
Fortunately, Sri Lanka finally awoke from weeks of diplomatic slumber, and Ambassador Mahinda Samarasinghe participated in the public hearing on 9 July, and promised, “…. · We have agreed to the text in our negotiations with the USTR on forced labour, …. The gazette as we speak is being printed and I’m getting the gazette tomorrow morning, and the gazette will be shared with USTR as I get it“.
As promised, President Anura Kumara Dissanayake issued a gazette on 10 July banning the imports of goods produced by forced labour. These new regulations are very similar to what Pakistan and Indonesia enacted in April, after their consultations with USTR in March. Why couldn’t we do it in April? Why did we wait till the very last minute?
Challenges ahead
“War is too important to be left to generals alone,” is a famous saying attributed to former French Premier Georges Clemenceau. Similarly, monitoring our main markets is too important to be left to diplomats alone. The United States is the largest single-country market for Sri Lanka. Therefore, Sri Lankan trade chambers and associations should become more proactive in these markets and participate in these events. For example, the chairman of the Pakistani apparel exporters association participated in the April hearings. Similarly, representatives from the Indian Agricultural and Processed Food Products Export Development Authority, the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, and Reliance Industries also participated in July hearings. At an event where each speaker is given only five minutes (strictly enforced), having a number of speakers from a country is an advantage. The presence of industry representatives in these kinds of events also help them understand the market dynamics and the future challenges. This is important, particularly because there will be many more challenges with Trump’s tariffs.
With the gazette issued on 10 July, Sri Lanka has imposed a prohibition on the importation of goods produced with forced labour. Now, the challenge will be to effectively enforce the prohibition. And what are the goods produced with forced labour? The USTR list only focuses on aluminum, cotton, electronics, lithium-ion batteries, rice, and tobacco. However, according to the U.S. Department of Labour, the list is much longer. Hence, this list may change continuously during the next two years and tariffs may fluctuate once again.
So, this is definitely not the time to slumber.
(The writer, a retired public servant, can be reached at senadhiragomi@gmail.com)
by Gomi Senadhira ✍️
Features
Tales of Mystery and Suspense 10 Casino for Sale
After the overwhelming grotesquerie of J K Rowling’s latest Cormoran Strike novel (written, I should have noted, as the others were, under the pseudonym Robert Galbraith), I thought I should return to the world of fun, and also a much shorter description since this thriller moves quickly without the layers of detail that Rowling engages in.
I then move to the second comic thriller by Caryl Brahms and S J Simon. This, their second story to feature Vladimir Stroganoff and Adam Quill, was Casino for Sale, as lunatic a romp as the first, though without the emphasis on the ballet that characterized A Bullet in the Ballet.
This one begins with the impresario Stroganoff buying a casino cheap from Baron Sam de Rabinovich, only to find that it was a rundown place, not the grand casino of La Bazouche, a resort on the Frenc+h Riviera, as he had initially thought. The grand one belonged to Lord Buttonhooke, and Stroganoff could not compete, until he thought of bringing the Ballet Stroganoff to the casino – which of course leads to Buttonhooke deciding to have ballet performances in his Casino too.
Stroganoff invites Quill to visit him, which Quill decides to do since he has left Scotland Yard, having come into a legacy. No one believes this, and he has to face questions as to what he did to have been sacked, with sympathy for having been found out.
The day he arrives in La Bazouche there is a murder, of a vitriolic critic called Citrolo, in Stroganoff’s office. He had been going to write a damning review of the opening night of the ballet and Stroganoff, when he realizes Citrolo cannot be swayed, drugs him and dictates the review himself to the papers. He leaves Citrolo sleeping and finds him shot the next morning, whereupon he decides to muddy the waters and leave a suicide note and lots of other murder weapons. So much overkill, as it were, of course ensures that he is arrested.
But the excitable French detective who makes the arrest follows up his suggestion that Buttonhooke was also involved, and so the two casino owners find themselves in cells next door to each other, with the detective Gustave quite happy to provide creature comforts for a fee.
Quill decides he must investigate, and finds Gustave most cooperative, since he has a laid back attitude to work. So it is Quill that finds a notebook which makes it clear Citrolo is an accomplished blackmailer, and that there are lots of possible murderers, including Stroganoff’s croupier, who was crooked, Rabinovich, who was now working for Buttonhooke, a confidence trickster called Kurt Kukumber, whose prospectus for a dud gold mine was found in the office and Prince Alexis Artishok who was engaged in a deal to buy diamonds from the ballerina Dyra Dyrakova.
Stroganoff had been trying to get Dyrakova to dance for him, but having done so previously she had refused. But then to Stroganoff’s chagrin she agreed to dance for Buttonhooke. The clearly crooked Artishok had told Buttonhooke’s mistress Sadie Souse, who was not very bright, that Dyrakova possessed diamonds she was willing to sell cheap, and Sadie was determined to have them.
Quill meanwhile finds out that there was a secret passage to Stroganoff’s office, the obvious solution to what had begun as a locked room mystery, and that this was known by almost everyone apart from Stroganoff himself. And then Rabinovich is murdered, just after Gustave had released his two original suspects, leading him to blame Quill for having insisted on that and thus allowing them to kill again.
Soon afterwards Dyrakova arrives, and the town is full of posters announcing that she will appear in the casinos, elaborate posters for either one, since Stroganoff is determined that she will dance for him, and if she does not come willingly, he has devised a scheme to make her do so unwillingly. So, though Buttonhooke has her taken off to his yacht immediately she arrives at the station, Quill along with Arenskaya gets her into a launch and to Stroganoff’s casino, where she performs to tumultuous applause, not knowing for whom she is dancing.
When Quill asked her about the diamonds, she said she had sold them long ago, and that gave Quill the solution to the mystery. Rabinovich had known about this, and Artishok had killed him to prevent Sadie learning it from him, he had killed Citrolo who had recognized him for an accomplished card sharper, not a Russian prince at all. But before he is arrested, he gets away in a boat, and the police launch that pursues him is on the point of catching him up when it runs out of petrol.
Again, lots of excitement, and entertaining references – Gustave grows marrows – and if not quite as brilliant as its predecessor, Casino was certainly a delightful read.
Features
The challenge of being positive about SAARC
It was a few years back that a former President of Sri Lanka took it on himself to pronounce SAARC ‘dead’. Since then there have been other sections of Sri Lankan opinion that have joined the critics of SAARC and taken the solemn stance that SAARC has indeed died what may be called a natural death.
Their fatalism is understandable. SAARC has failed to meet at heads of government or state level for the past several years to take the SAARC process notably forward. Regional cooperation has more or less been only an appealing idea. No substantive concrete projects have taken off to make the idea a hard reality. ‘Inner paralysis’ seems to be SAARC’s lot. Hence the fatalism in these circles.
However, being one of the worst cash-strapped regions of the world and a teemingly populated one with people virtually left to their devices, what choices do the ‘SAARC Eight’ have other than to try their best to band together and continue with their cooperation efforts, however small they may be?
There is no escaping the mounting debt trap for many of these countries and bankrupt Sri Lanka is a glaring example, but ‘throwing in the towel’ and abandoning themselves entirely to the diktats of the strongest economies and their agencies will prove a ‘living death’ for many countries in the SAARC fold.
The gains may be meagre but giving-up on SAARC cooperation in full would prove self-defeating for the organization and South Asia. Right now, the collective intention ought to be to salvage what the region could from the tenuous cooperative efforts. Moreover, such initiatives could go some distance to generate a degree of goodwill among the Eight and help in sustaining a dialogue process.
Given this backdrop it proved ‘a stich in time’ for the Regional Centre for Strategic Studies (RCSS), Colombo, to recently host the SAARC Secretary General Ambassador Md. Golam Sarwar to a round table discussion on the unifying potential of SAARC and its future possibilities, besides other related issue areas.
Held on June 24th and moderated by RCSS Executive Director and former ambassador Ravinatha Aryasinha, the forum brought together a vibrant, wide ranging audience comprising academicians, diplomats, senior public servants, civil society activists and many others. Following the presentation by Ambassador Golam Sarwar titled, ‘Reigniting SAARC: Achievements, Challenges and the Way Ahead’, a lively Q&A followed.
The above forum could be described as an act of lighting the proverbial ‘candle’ rather than ‘cursing the darkness.’ It surely is a ‘darkness’ that could be seen as daunting considering that the region’s pivotal powers, India and Pakistan, are failing to act in a spirit of accord but are engaged in bitter finger-pointing on a number of questions of vital importance to SAARC.
On the other hand, what is the rest of the region doing to bring the above sides together? It is disappointing that to date the rest of SAARC has failed to launch a major diplomatic drive to bring peace between the feuding regional heavyweights. It needs to act without delay and establish its earnestness and this effort would need to prove SAARC’s staying power in the unfolding months and even years.
In assessing SAARC’s seeming failure local opinion in particular has failed to factor in what could be described as weak leadership. Since Sheikh Mujibur Rahman of Bangladesh, the founding father of SAARC, the region has failed to produce a visionary leader who could advance the SAARC cause with charisma and drive.
Among other reasons, weak leadership accounts considerably for the faltering and stuttering status, as it were, of SAARC. Badly needed are leaders who could go the extra mile, think less of narrow national interests and work diligently towards the collective well being of the region but SAARC’s millions of ordinary people have been made to wait in vain for leaders of such stature. Instead, they have been burdened with politicians who seem to be relishing the apparently moribund state of SAARC.
Looking back, it could be said that it was the dynamic leadership factor that led to the launching of the Non-Aligned Movement and for its sustenance for a few decades. True, it could be seen in some quarters that NAM is no more, but as in the case of SAARC, the former too has been unfortunate to be burdened over the years with politicians who lack the vision and drive to unflaggingly advance the fortunes of the South. NAM and SAARC lack the dynamism and vision of leaders of the stature of Jawaharlal Nehru, for example, to give them the required guidance and intellectual depth.
The reasons are complex for there not being among us currently political leaders with the vision and the steadfast commitment to advance the legitimate interests of the South. However, it could be stated with conviction that the majority of Southern leaders have too easily caved in to the demands of the global North and its financial agencies.
These leaders have failed to see, for instance, that the largely market economy oriented Northern governments would not view with favour a centrist economic model that attaches priority to the interests of the dis-empowered publics of the South. This realization ought to have dawned on the current government in Sri Lanka, for instance, some while ago but it has no choice but to abide by IMF dictates since economic survival at present is unthinkable without the latter’s succour.
Accordingly for SAARC this should be the time for some soul-searching. Priority needs to be attached to ending the feuding between India and Pakistan since at present the material fortunes of the region hinge largely on these regional giants giving peaceful relations among them a try. This is no easy challenge to meet but some daring, visionary diplomacy needs to take hold among the rest of SAARC.
There is some sense in SAARC bringing the peoples of the region together through programs that address their best collective interests. A meeting of minds among SAARC nations could enable SAARC and its agencies to build a region-wide people’s movement for progressive political and economic change that could in turn lead to the region’s political leaders sensitizing themselves more to the neglected needs of their publics.
However, the time is ‘now’ for the initiation of these progressive changes and the voice of SAARC well wishers would need to drown out those of their critics.
-
Features6 days agoPrison riots and politics: NPP’s biggest challenge and Sri Lanka’s biggest opportunity
-
Features3 days agoDirty Money
-
Editorial6 days agoMuch ado about crime: Fish or cut bait
-
Features6 days agoMore on Saudi Arabia: ARAMCO and beyond
-
Sports6 days agoThe banker who rescued Sri Lankan cricket
-
News1 day agoMoney laundering case against Yoshitha, fixed for pre-trial conference
-
Midweek Review3 days agoThe sordid tale of theft and tragedy at Finance Ministry
-
Latest News4 days agoOil prices hit 1-month high as US-Iran attacks dim Strait of Hormuz outlook

