Leading corporate entities have pledged to use commercial mediation for dispute resolution as Sri Lanka grapples with 1.2 million pending court cases. The initiative follows the June implementation of new mediation legislation.
Twenty major Sri Lankan companies have signed a commitment to prioritize commercial mediation for resolving business disputes, marking a significant shift toward alternative resolution methods. The pledge, formalized on August 4 by participating corporations, aims to address the country's substantial court backlog while protecting business interests and reducing litigation delays.
The initiative, coordinated by the International ADR Center at Port City Colombo, aligns with Sri Lanka's newly enacted Mediation in Civil and Commercial Disputes Act No. 13 of 2026, which became effective on June 30. The legislation provides legal enforceability to mediated settlement agreements and empowers courts to refer appropriate cases to mediation. According to IADRC Chairman Dr K. Kanag-Isvaran, mediation offers businesses a mechanism to resolve conflicts while maintaining confidentiality and preserving commercial relationships—advantages unavailable through traditional litigation or arbitration.
International experience supports the approach. Siong Koon Sim, Director of the Singapore International Mediation Centre, cited global data indicating that over 90 percent of commercial mediations conclude within a single day, with settlement success rates between 65 and 70 percent across sectors including supply chain, construction, and emerging industries. Unlike adversarial proceedings that typically produce a single winner, mediation enables mutually beneficial outcomes when successful.
Organizers view the mediation framework as instrumental in reducing justice delays and enhancing Sri Lanka's appeal to foreign investors. The initiative received support from The Asia Foundation, with Port City Colombo serving as the venue partner.
