“Commercial Mediation Bill”: Problem or solution?

Sri Lanka’s recently gazetted Mediation (Civil and Commercial Disputes) Bill, 2025 aims to institutionalise mediation and reduce court backlog.

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Some critics argue that it will not fully serve its intended purpose.

This is an interview with President's Counsel Harsha Fernando, who, in addition to litigation, has been practicing commercial negotiations and mediation, both locally and overseas, for over 20 years.

Q: The Government has proposed a Commercial Mediation Bill. What are your initial thoughts on it?

A: Mediation is an important tool in the broader continuum of dispute resolution options available, ranging from direct negotiation between parties, to mediation involving a neutral third party, to arbitration and ultimately court-based adjudication. In that context, I believe introducing a legislative framework to support and institutionalise mediation is both timely and necessary. It reflects a progressive step toward strengthening access to justice, reducing court congestion, and offering businesses a cost-effective and efficient mechanism for resolving disputes. Overall, it’s a positive move in the right direction.

Q: What are the differences between mediation, conciliation, and arbitration that a party to a commercial transaction should be aware of?

A: In commercial disputes, parties typically have a range of dispute resolution options, including negotiation, mediation, conciliation, arbitration, and litigation. These fall into two broad categories. Mediation, conciliation, and negotiation are consensual processes where the parties themselves determine the outcome. Arbitration and court proceedings, on the other hand, are adjudicatory processes where a third party imposes a binding decision, often resulting in a win/lose outcome.