FINANCIAL CHRONICLE – On August 4, a group of twenty prominent corporations in Sri Lanka committed to utilizing commercial mediation as their primary method for resolving disputes, amidst a significant backlog of 1.2 million cases in the judicial system.
This initiative, spearheaded by the International ADR Center (IADRC) at Port City Colombo, aims to facilitate out-of-court resolutions, safeguard corporate assets, and mitigate lengthy legal processes. This pledge comes in the wake of significant legal reforms, including the Mediation in Civil and Commercial Disputes Act No. 13 of 2026, which came into effect on June 30, 2026.
During the event, Dr. K. Kanag-Isvaran PC, Chairman of the IADRC, emphasized that corporate disputes that have been pending for extended periods are better resolved through business-oriented solutions rather than through conventional court proceedings. He stated, “This pledge signifies a commitment to making informed decisions regarding dispute resolution that serves the best interests of the organization, thus preserving corporate value and brand integrity.”
The newly established legal framework grants binding and enforceable recognition to mediated agreements, treating them as legitimate contracts and allowing judges to recommend mediation for appropriate cases.
In contrast to court litigation or arbitration, where a third party imposes a decision, mediation empowers both parties to negotiate their terms, maintain confidentiality, and protect important business relationships from damage.
Dr. Kanag-Isvaran further highlighted that the private sector and legal community in Sri Lanka have developed a robust and agile framework that effectively meets contemporary business demands. “We are not just a service provider; we are leaders in thought within this domain,” he remarked.
Siong Koon Sim, Director of the Singapore International Mediation Centre (SIMC), shared valuable insights from Singapore’s experience, pointing out that many leading multinational corporations have adopted commercial mediation to manage litigation expenses and expedite conflict resolution.
He referenced international statistics indicating that more than 90 percent of commercial mediations are concluded within a single day, achieving a success rate of 65 to 70 percent across various sectors, including supply chain management, construction, and cryptocurrency.
Sim commended the local businesses participating in this initiative, stressing that creating an effective alternative dispute resolution system necessitates collaboration among businesses, legal professionals, and the legal framework. “In arbitration and litigation, there is generally one winner. In mediation, if successful, both parties can emerge as winners,” he stated.
The event was supported by The Asia Foundation, with Port City Colombo serving as the venue partner. Organizers anticipate that the mediation framework will contribute to reducing the costs associated with delayed justice and enhance Sri Lanka’s appeal as a destination for foreign investment. (Colombo/Aug05/2026)
