Sri Lanka strengthens business confidence through Commercial Mediation

Sri Lanka has taken a significant step towards strengthening business confidence with the establishment of a modern framework for commercial mediation, creating a structured, efficient and internationally aligned mechanism for businesses to resolve disputes while protecting valuable commercial relationships.

The milestone was marked at the inaugural Corporate Mediation Pledge Ceremony organised by the International Alternative Dispute Resolution Center, Sri Lanka (IADRC) at the Sales Gallery, Port City Colombo, where twenty-five corporates committed to recognising mediation as an option for resolving disputes arising from their business engagements.

The initiative follows the enactment of the Mediation (Civil and Commercial Disputes) Act, No. 13 of 2026, which came into operation on June 30, 2026. The legislation represents an important policy milestone by recognising mediation as a mainstream dispute resolution method for civil and commercial disputes, establishing standards governing the mediation process, defining the responsibilities of mediators and mediation service providers, and providing a framework for the recognition and enforcement of mediated settlement agreements.

For businesses, the introduction of this framework creates a new pathway to resolve commercial disputes in a manner that is confidential, collaborative and focused on achieving practical outcomes. Unlike traditional dispute resolution processes that can often result in prolonged proceedings, mediation enables parties to engage directly, explore mutually acceptable solutions and preserve important commercial relationships that may otherwise be affected by conflict.

As global business environments become increasingly interconnected, the availability of reliable dispute resolution mechanisms has become an important consideration for businesses and investors when evaluating jurisdictions. A strong mediation framework contributes to greater certainty by ensuring that commercial disagreements can be managed through a recognised process that prioritises efficiency, confidentiality and continuity of business relationships.

Beyond strengthening domestic business confidence, Sri Lanka’s evolving mediation ecosystem creates an opportunity for the country to develop as a trusted destination for commercial dispute resolution. With its strategic location at the centre of Indian Ocean trade routes, strengthened legal framework and growing institutional capability, Sri Lanka is positioned to support not only domestic businesses but also cross-border commercial engagements.

The Corporate Mediation Pledge reflects growing recognition among businesses that disputes between commercial partners must be managed efficiently to minimise disruption to operations and protect long-term relationships. Through the pledge, participating companies have committed to considering mediation as part of their corporate dispute resolution approach, recognising that effective dispute management contributes to responsible corporate governance and sustainable business outcomes.

The initiative aligns with a growing global movement towards mediation as a preferred mechanism for commercial dispute resolution. Internationally, businesses and institutions have increasingly adopted mediation due to its ability to provide flexible, confidential and relationship-focused solutions while reducing the costs and delays associated with prolonged disputes.

The Corporate Mediation Pledge Ceremony was supported by The Asia Foundation, with Colombo Port City serving as the venue partner.