Disputes are inevitable in any society, regardless of their size or nature, and often cause significant delays and costs when pursued through litigation. Alternative Dispute Resolution (ADR) offers faster, less formal, and more cost-effective solutions outside of courtrooms. This article critically examines the effectiveness of ADR mechanisms in Sri Lanka and India, two jurisdictions with distinct approaches to dispute resolution.
Mediation
Sri Lanka’s mediation system has roots in village councils of ancient kingdoms, where elders and monks acted as mediators. Modern mediation is governed by the Mediation Boards Act No. 72 of 1998 and the Commercial Mediation Centre of Sri Lanka Act No. 44 of 2000, which promotes settlement of commercial disputes. Courts also encourage mediation through the Court of Appeal (Mediation in Appeals) Rules 1990. Statistics reveal that nearly 250,000 cases are mediated annually, with a 65% settlement rate and high satisfaction among disputants.
India recently enacted the Mediation Act, 2023, marking a turning point in formalizing mediation. Earlier, Section 89(1) of the Civil Procedure Code, 1908 allowed courts to recommend ADR methods. In cases like Salem Advocate Bar Association v. Union of India, the Supreme Court emphasized the importance of mediation. These developments highlight India’s strong commitment to institutionalizing mediation, making it a preferred method for commercial and civil disputes.
Arbitration
Arbitration, where a neutral third party issues a binding decision, is governed in Sri Lanka by the Arbitration Act No. 11 of 1995. Cases such as Mahawaduge Priyanga Lakshitha Prasad Perera v. China National Technical Imports & Export reaffirm courts’ limited role in arbitral processes.
In India, arbitration is primarily governed by the Arbitration and Conciliation Act, 1996, based on the UNCITRAL Model Law. The Supreme Court in Vedanta Ltd v. Shreeji Shipping clarified
that courts cannot re-interpret arbitral awards, strengthening finality of decisions. Despite progress, challenges remain, including delays, high fees, and fragmented legal frameworks.
Challenges and Recommendations
Both countries face issues such as lack of awareness, high costs, and concerns over confidentiality. Sri Lanka, however, lags behind India in global recognition and institutional support. To improve, Sri Lanka should:
• Establish mediation centers for SMEs,
• Train qualified arbitrators,
• Integrate ADR education into academic curricula, and
• Expand awareness, particularly as only 34% of the public is familiar with conciliation.
Conclusion
While both Sri Lanka and India possess legislative frameworks and institutions for ADR, India’s system is more robust, especially in mediation and arbitration. Sri Lanka, though less developed globally, has promising foundations, particularly through its mediation boards and investment treaties. Strengthening awareness, training, and institutional capacity could enable ADR to create more win–win outcomes for disputants in Sri Lanka.
Written By: –
Rukshani Weerasinghe
Faculty of Law,
University of Colombo
Design By: –
Rtr.Hirusha Nimshara
(Junior Blog Team Member 2025-26)
