• The 2023 Colombo Arbitration Week’s Organisation Committee’s Anjalee Ranasinghe and Najma Rizwan shed light on the national status quo in terms of arbitration, its scope, challenges, and future    

Although alternative dispute resolution (ADR) mechanisms remain one of the most effective means of resolving disputes without having to opt for litigation, which, in most cases, costs a significant amount of time and money, Sri Lanka is yet to adequately embrace, promote, and improve ADR mechanisms. While there is a pressing need to raise awareness among the public in this regard, especially to educate more people on the pros and cons of ADR mechanisms, as a country, there are a number of international lessons that the country could learn from. 

According to the Colombo Arbitration Week (CAW) 2023 Organisation Committee’s Head of Administration Anjalee Ranasinghe and Head of Programmes and Partnerships Najma Rizwan, that is why events such as the CAW 2023, which is scheduled to be held from 6 to 13 August to promote the available ADR mechanisms in the country, are important. In the long run, they noted, these efforts should receive the support of more and more stakeholders and the general public.

They made these statements during an interview with The Daily Morning.

Below are the excerpts from the interview conducted with the duo:

What are the different types of ADR options that are available in Sri Lanka?

There are several types of ADR methods in Sri Lanka. But, as the most commonly used methods, we can name arbitration, mediation, and conciliation, and negotiation. When there is a dispute, the most common method that we know of is litigation, where the concerned parties go to court. Arbitration is a very similar process, but it takes place in a private setting. The relevant parties themselves can appoint a panel of judges, whom we call arbitrators. The dispute is taken to a tribunal through the counsels, and then they come to a solution. Mediation is slightly similar to arbitration but is a lot more casual. It is essentially a conversation. In Sri Lanka, it is more prevalent and is known as the “Samatha Mandalaya” (Mediation Board). It is actually very convenient.

How does one decide whether they should seek the assistance of a court or opt for an ADR mechanism?

The only instance where you cannot pursue ADR is if the matter is criminal in nature. Whether to pick an ADR mechanism is 100% up to the parties. The amazing thing about ADR is that the relevant parties can also make decisions. Party autonomy is the key factor in ADR and the parties can choose what they want to do. 

However, a secondary factor is that there are different methods of entering arbitration or mediation. When it comes to a dispute, more often than not, there is a contract in place. In a contract, there is something called a dispute resolution clause. If a dispute arises based on this contract, it may be referred to arbitration or mediation. If you are still unable to resolve your issues through these routes, that is when you can go to court. But, more cases get resolved through mediation or any other ADR mechanism.

In terms of efficiency, ADR mechanisms are sort of what most people would prefer to go for, especially when the matter is a corporate case or a big case. Generally, when you take the case to a court, the ordinary procedure itself takes a long time to come to a decision, get your judgment, and enforce it. But, in the case of arbitration, because a specific tribunal is appointed to decide on the dispute, they will set up a procedural timetable and continue the proceedings as and when they can. So, it is much faster. 

In terms of the cost, it actually depends on a case-by-case basis. Arbitration can be a bit costly. But is still worth it, because time is money. One of the other benefits of going for ADR is that you get privacy, and nobody else would know about your case. All matters will be confidential, and it has all the benefits of a court procedure which can be enjoyed without having to go to court. In addition, in an arbitration setup, you have more control over the situation.

How legally binding are ADR mechanisms?

The judgment given in an ADR mechanism-based case is called an “arbitral award”, and that is generally legally binding and is enforceable in Sri Lanka.

Do you think that there is a lack of awareness in Sri Lanka regarding ADR?

Based on our general understanding, if we are to make an observation, there is a general lack of education around all legal solutions one has access to. Even if it was not about ADR in general, people are not usually aware of all the options that are available to them when it comes to resolving a dispute. However, in terms of ADR specifically, we too have noticed that not everyone is aware of all the nitty-gritty of ADR. 

How do we start an ADR process? 

If you take arbitration, for example, there are two ways it can get started. The first one is if the dispute comes out of a contract, or if the relevant parties have some sort of a contract or an agreement, they can opt for an ADR method. First of all, we will take the matter to mediation methods and try to mediate it. If that fails, we go for arbitration methods. 

If you don’t have a contract and if a dispute arises spontaneously, at that point, the relevant parties can agree to go for an arbitration method. It is basically an agreement where they have a consensus. When it comes to arbitration, there are two methods. They can either go to one of the existing institutions that handle arbitration in Sri Lanka and can submit their dispute there or they themselves can appoint an arbitration board with experts on their matter who will be deciding on their dispute. So, if you have a construction-related dispute, you could choose an arbitrator who has a background in construction, and the same goes for commercial matters. The proceedings go forward from there in the same way that litigation takes place, where counsels appear and present your case, along with witnesses and experts, if necessary.

What sort of role does the Government play in ADR mechanisms?

In terms of institutional arbitration, it is independent of the Government. Where the Government comes into play in ADR is through mechanisms such as the Arbitration Act, No. 11 of 1995. Currently, we are in the process of drafting an amendment to the initial Arbitration Act. In this case, the relevant ministry directly appoints a team to create this new draft, and the drafters who look into these matters, again, are handled by the Government. Then, we need to table it in the Parliament for it to come out as an Act, and we need the Cabinet of Ministers approval and then go to the Supreme Court. These are the elements in which the Government gets involved. They actually enable ADR in the country, because their laws and changes in policies definitely affect the state of ADR in the country. But, from that point onwards, there is less involvement of the State, because that defeats the purpose of going into a private dispute resolution.

What challenges do ADR mechanisms face in Sri Lanka?

One of the key challenges is the interim measures that are imposed, and how some arbitral awards cannot be implemented in Sri Lanka because they challenge the public policy of the country. That is the biggest challenge commented on by experts on the matter. In addition, there is not enough conversation happening on that.

What are the best practices we can get from the international context on ADR?

We can definitely get a lot of input from the international community, which is why we always think of enabling discussions between international experts and our experts. It is a learning process. More attention needs to be paid to the incorporation of automation and technology in our procedures. If you take transcribing, for example, internationally, it is all automated, whereas, in Sri Lanka, it is similar to any court where you have a person actually sitting down and writing. All of these are little things that we can start off.