Sri Lanka has taken a significant step towards strengthening business confidence with the introduction of a modern commercial mediation framework, providing businesses with a faster, confidential and internationally aligned mechanism to resolve disputes while preserving valuable commercial relationships.
The development was highlighted at the inaugural Corporate Mediation Pledge Ceremony, organised by the International Alternative Dispute Resolution Center, Sri Lanka (IADRC) at the Port City Colombo Sales Gallery. During the event, 25 corporates pledged to consider mediation as an option when resolving disputes arising from their business engagements.
The initiative follows the implementation of the Mediation (Civil and Commercial Disputes) Act, No. 13 of 2026, which came into effect on June 30. The legislation formally recognises mediation as a mainstream mechanism for resolving civil and commercial disputes while establishing standards governing mediation processes, mediator responsibilities and service providers.
The Act also provides for the recognition and enforcement of mediated settlement agreements, strengthening the legal foundation for businesses seeking alternatives to conventional litigation.
The new framework gives companies an alternative to potentially lengthy legal proceedings by encouraging confidential, collaborative and practical dispute resolution. This can help businesses minimise operational disruptions while maintaining long-term commercial relationships.
Industry stakeholders have highlighted the potential of efficient dispute resolution mechanisms to enhance Sri Lanka’s attractiveness as an investment destination. A predictable and effective system for resolving commercial disputes can provide greater certainty and confidence for both local and international businesses operating in the country.
The IADRC, established to promote alternative dispute resolution in Sri Lanka, has developed institutional mediation rules and maintains a panel of trained and accredited mediators.
The organisation also works alongside institutions including CC Sri Lanka, the National Arbitration Center and Udecide to advance mediation services and strengthen the country’s alternative dispute resolution ecosystem.
The introduction of the commercial mediation framework represents an important development in Sri Lanka’s business environment, supporting a more efficient and relationship-focused approach to resolving commercial disputes while contributing to greater confidence among businesses and investors.