On February 24, 2024, Sri Lanka became the fourteenth State Party to the United Nations Convention on International Settlement Agreements Resulting from Mediation, referred to as the “Singapore Convention on Mediation.” The Convention will enter into force on August 28, 2024, for Sri Lanka Earlier this year, in January, the Sri Lankan Parliament passed the Recognition and Enforcement of International Settlement Agreements Resulting from Mediation (Act No. 5 of 2024), also known as the “Mediation Act”.
The Singapore Convention on Mediation facilitates international trade and promotes mediation as an alternative and effective method of resolving commercial disputes by providing an effective mechanism for the enforcement of international settlement agreements resulting from mediation. The Convention establishes a framework for enforcement of international settlement agreements resulting from mediation in order to promote the use of mediation as a method of resolving international commercial disputes.
The backdrop of this legislation lies in the broader international landscape, where the United Nations General Assembly adopted the UN Convention on International Settlement Agreements Resulting from Mediation in December 2018.
In total, fifty-six States have signed the Convention since it opened for signature on 7 August 2019. A full list of signatories and parties to the Convention is available on the United Nations Treaty Collection. Further up-to-date information on the Convention and its status, including an overview of the implementing legislation of the Parties to the Convention, the official preparatory documents from the UNCITRAL Working Group II negotiations (Travaux Préparatoires) and other useful resources, may be found here.
The Convention is open for signature, ratification, and accession by States and regional economic integration organizations. For more information please visit the official UNCITRAL website.
The Mediation Act in Sri Lanka mirrors the principles outlined in the Singapore Convention and applies to settlement agreements that are international, in writing, and the result of a mediated settlement to resolve commercial disputes. The Act takes into account the UNCITRAL Model Law’s broad interpretation of “commercial” to cover a wide range of relationships and transactions.
Sri Lanka’s pursuit of these legislative measures aligns with its aspirations to emerge as an attractive destination for international investment. The effectiveness of the contract enforcement regime has been a historical challenge, with litigation being criticized for its sluggish pace and high costs. The new mediation-focused approach seeks to address these issues and establish a comprehensive ecosystem that promotes efficient dispute resolution.
Beyond the legal framework, Sri Lanka recognizes the importance of an excellent Alternative Dispute Resolution (ADR) ecosystem. Countries in the region, such as Singapore and India have invested in mediation with success and witnessed exemplary results, largely owed to the support of the respective governments. Similarly, Ratification of the Singapore Convention and subsequent domestic legislation are expected to further enhance Sri Lanka’s image as a country committed to creating a conducive environment for international business and facilitate domestic commercial activities.
We extend our gratitude to IMI Intern, Samaa Shazuli for their contributions to this article.
