Mediation as an effective alternative dispute ressolution process.

By Dhara Wijayatilake1

The value of the adjudicator process as a meaningful method of resolving disputes is under serious challenge. Consecutive Governments through their Ministers of Justice have attempted to introduce reforms to improve the systems. Substantive laws have been looked at and amended, procedural laws have been reformed, the legal culture has been examined, court infrastructure has been improved, increased financial provision has been voted, cadres have been enhanced, additional courts have been established, training has been given but nothing seems to have made an appreciable impact. We still continue to have a laws delays problem which gives policy makers serious cause for concern and which creates within our people a deep seated desire to keep out of courts. The challenge to improve the system then, is a serious one. Sri Lanka however is not alone in facing this challenge. The disenchantment with the adjudicator process is an almost global phenomenon which has inspired a universal search for improved and more meaningful methods.

In attempting to improve the system what is required is not a mere quantity control effort aimed at avoiding a case load explosion. What is required is also an attempt to improve the quality of justice. This would essentially mean an avoidance of the stress of litigation, a reduction of expense, the elimination of delays, greater accessibility, better awareness.

1 Secretary, Ministry of Justice

of what is happening and an appreciation of why it must happen, greater confidence in the system and the process and finally an acceptance of the end result as being just.

In recent times there has been some focus on improving the system by channelling disputes to non-adjudication forums for resolution through alternative methods. The current widespread interest in looking at alternative methods of resolving disputes is because of its perceived potential to overcome some of the iniquities of the traditional (adjudicator) system. In many advanced jurisdictions the Alternative Dispute Resolution (ADR) movement is fast gaining headway as the better way or has already done so. However, even ADR’s greatest proponents will concede that the adjudicator process still has its value for the resolution of certain categories of cases and issues. We have gone full cycle then. It will be recalled that amicable dispute resolution has been very much a part of, not only traditional Sri Lankan culture but also of the Asian culture. In our country it was the western rulers that introduced a formal structured court system which dispensed justice based on adversarial procedures. Today, the autochthonous methods are no longer visible. What we have are institutionalised methods which has been greatly influenced by western developments. In fact, what has happened today is that, non-adversarial dispute resolution methods have been turned into highly professional systems.

In Sri Lanka too, several initiatives have been taken towards institutionalizing ADR processes through the introduction of Conciliation, Mediation and Arbitration. Recent initiatives have focused on the use of Mediation for the resolution of community disputes, employment disputes and commercial disputes. However, there is very little public awareness of the availability of these mechanisms and services and their usage is thus limited. This article seeks to focus on some of these initiatives and the key features of the ADR concepts.

What is ADR?

It is important to focus on what ADR means and what it is that provokes excitement as an efficient alternative. ADR or ‘Alternative Dispute Resolution’ is basically a reference to all the ‘other’ processes that are available for the resolution of disputes other than the adjudicator or litigation process. The basic feature of adjudication/litigation is that it is ‘adversarial” in nature. Alternatives do not necessarily follow the adversarial principles. They are more ‘settlement’ oriented. And it is this feature that makes it valuable as a more acceptable process and it is also this feature that forms the basis for its greatest critics. In the final analysis it is the level of ‘user satisfaction’ that will determine its acceptance as an effective process and not any of the academic analysis based on what should be sought and achieved by those who access the administration of justice processes.

Among the many ADR processes are Arbitration, Mediation, Conciliation and Negotiation to name but a few that are known in this country.

Sri Lanka’s initiatives

Sri Lanka’s most recent initiatives have been in relation to Arbitration and Mediation.

Arbitration has been statutory recognised for some time in this country. The latest enactment on the subject is the Arbitration Act, No. 11 of 1995 which provides for a regime which recognizes party autonomy devoid of court intervention other than in a few and exceptional circumstances. The enactment of the Arbitration Act was a response to the need for expeditious resolution of commercial disputes. Six years later, it is now argued by users that Arbitration has not been successful in eliminating the weaknesses of the adversarial process. It is argued that it has the potential to be as expensive, as time consuming and as disappointing, to the user.

In 1998, the Mediation Boards Act No. 72 of 1998 was passed by Parliament. The Act provides for the legal framework for institutionalizing Mediation Boards, which are empowered to resolve by the process of mediation, all disputes referred to it by disputing parties as well as in certain instances, by courts. A large number of the disputes handled by 1 the Boards relate to community disputes. However, Banks have increasingly been referring issues regarding debts as well.

Mediators are appointed by the five member Mediation Boards Commission chaired by a retired Judge of a Superior Court. They are selected from among members of the community on the basis of proven aptitude. Aptitude is assessed through training courses which impart the skills and techniques of mediation. The training courses are conducted by Trainers in the official cadre of the Ministry of Justice which Ministry is responsible for the implementation of the Act. These Trainers follow periodic refresher courses designed to improve their skills. There is great emphasis placed by the Ministry on the training of Mediator Trainers and Mediators.

Currently, there are 5,868 Mediators functioning in 242 Mediation Boards in the island. The total number of disputes in respect of which mediation has been attempted from the inception (in April 1990) to September, 2001 is 895,532. Of these 545,727 are reported to have been successfully settled. The settlement rate as at September 2001 is 59.1%2. While it cannot be stated with certainty that successful settlements have resulted in weaning these issues away from courts of law it can certainly be said that these settlements have very definitely contributed to the creation of an environment of peace in the community.

2 Source of all statistics relating to Mediation Boards – Mediation Boards Commission.

The Human Rights Commission of Sri Lanka Act, No21 of 1996 provides for the resolution of issues that come before the Commission, through conciliation and mediation. In 1996 when the Bill was being drafted, it was intended that mediation and conciliation be used in the resolution of the types of concerns that would come before the Commission. Although the Commission did commence the training of volunteers with a view to providing mediation services in respect of issues brought before the Commission, this does not appear to have been pursued with any seriousness thereafter.

The Labour legislation of Sri Lanka also provides for the resolution of labour disputes by reference to Arbitration, Conciliation and out of court settlement mechanisms’. There is however an acute need to enhance the efficacy of these mechanisms by focused training of Arbitrators and Conciliators and the simplification of settlement procedures. The Act and Regulations made thereunder specify the scope and ambit of the powers of an Arbitral Tribunal, and the applicable procedure. An important requirement of labour arbitration is that the Award must be one which appears to the Tribunal to be just and equitable.

Mr. Franklyn Amerasinghe, former Secretary General of the Employers Federation of Ceylon had this to say about settlement methods, “It is now accepted that conciliation and compulsory arbitration have not proved effective in the resolution of industrial disputes in Sri Lanka. Conciliation is done by officers who have hardly any knowledge of the process of conciliation or adequate training in the labour law itself and voluntary arbitration is seen as a successful method only as long as the

3 Industrial Disputes Act, No. 43 as amended. 4 “Dispute Settlement – Employers ‘perspective”- Paper presented by Franklyn Amerasinghe at the Tripartite seminar in Dispute Settlement. Labour settlements and Industrial Courts . Colombo, August, 1997. 17

relationship between the Unions, the employer and the workers is underpinned by a sense of mutual trust and confidence4. Compulsory arbitration it is said, is regrettably characterised by excessive legalism and the conceptual distinction between arbitration and adjudication is often blurred in that our arbitral process operates as a confrontational exercise in far too many cases5.

In 1999, concerns that there was a greater need for more stable relationships in the manager/worker environment inspired the initiatives which resulted in the formation of the Employment Mediation Services Centre (EMSC). The Employers Federation of Ceylon gave leadership to a project which was funded by The Asia Foundation. The project which at that time appeared somewhat ambitious given the inherent suspicions in the relationships between employers and workers in disagreement situations, has however had a smooth transition from a mere idea based on a concept to a full blown Association with a mission. The EMSC which was formally established on January 26th, 2001 has 84 members and functions as a private Mediation Centre comprising a membership of Employers, Workers and others. The Center has its own Constitution and functions with its Board of Management which includes an equal number of Employers and Workers6. The bipartisan nature of the Boards composition and the membership of the Association gives an assurance that neither category has an undue advantage. The Center has trained persons who are available to serve as Mediators when disputes are referred to it. There is also a panel of Trainers who

5 “The approach to Labour Adjudication in Sri Lanka” – paper presented by J.F.A. Soza at the Tripartite seminar in Dispute Settlement. Labour settlements and Industrial Courts. Colombo. August. 1997.

6 The EMSC is located at 385/J3. Old Kotte Road, Rajagiriya (Tel. 867966: e-mail

have been trained to impart training to prospective Mediators and also conduct training in the interest based Mediation/Negotiation methods. Many training courses have been conducted by these persons at Enterprise level, on request.

Any employment dispute may be referred to the Center which has formulated its own Rules in terms of which mediation sessions are conducted. Key features of the process are that it assures complete confidentiality and is purely voluntary in nature.

The concept of Mediation has also been institutionalized through the Commercial Mediation Centre of Sri Lanka Act, No. 44 of 2000. The Commercial Mediation Centre of Sri Lanka (CMCSL) established thereunder was launched on September 12th, 2000 and is statutory mandated to promote the wider acceptance of mediation and conciliation for the resolution and settlement of commercial disputes

This ADR initiative was taken at the request of the private sector community which expressed a dire need for a more expeditious and efficient dispute resolution mechanism in relation to commercial matters. Underlying this need which comes six years after the enactment of the Arbitration Act No. 11 of 1995, on which much hope was placed at the time as the most ideal alternative to litigation, one senses now, a desire to veer away not only from courts but also arbitration with an urgency which highlights the need for speedy resolution of disputes. The establishment of this Centre was a response to that need which calls for both efficacy, value and speed. Although the passage of the Law was initiated by government, the intention is that the effort should be ‘owned’

by the private sector. This thinking is reflected in the composition of the Board of Management which comprises representatives of the four Chambers of Commerce7 and one nominee of the Minister of Justice. The CMCSL8 too has 34 trained Mediators accredited to the Centre who are available to function as Mediators in respect of commercial disputes referred to the Centre.


Mediation as we know it today, is a non-litigating process which is managed by a neutral third party intervening called a Mediator. The process is structured systematically and is disciplined. While there are key principles and key elements which define the concept, there are no rigid rules except those which are adopted by the disputing parties. The Mediator manages the structured process in such a way that the disputing parties are empowered through that process to identify the real issues and search for solutions. Finally the disputants take their own decisions regarding the outcome and enforcement is by the will of the parties. There are some distinguishing characteristics of Mediation. Firstly, it is a forward looking process which does not seek to determine guilt, innocence, right or wrong and thereby negates a focus on the past. Rather, it has a future focus and seeks to evolve solutions for future conduct. Secondly, it focusses on commonalities and mutuality as between disputing parties rather than emphasising differences. And finally, in the Interest Based Mediation approach, the process does not at any stage permit the assumption of positions by parties. What is encouraged is the identification of interests and needs.

The Ceylon Chamber of Commerce, the National Chamber of Commerce. Federation of Chambers of Commerce and Industry of Sri Lanka and the Ceylon National Chamber of lndustries.

8 The CMCSL is located at the Ceylon Chamber of Commerce Building, 50 Navam Mawatha, Col. 2 (Tel. 421745

The EMSC and the CMCSL follow the Interest Based Mediation approach. While in a position based approach, parties determine the issues of the conflict, they assume a position, they become emotionally attached to their position and engage in finding evidence to support that stand, all of which adds up to being confrontational or adversarial, in the interest based approach the focus is on identifying interests by taking the parties to the beginning of the conflict, evaluating information as opposed to perceptions, assumptions and conclusions based upon them, and in indulging in a creative search for solutions, together.

Benefits of Mediation

Mediation has the potential not only to resolve disputes but also to avoid them. This, in my view, is the most important benefit that Mediation offers to the maintenance of a stable society and a sound economic environment. Resolution of community, commercial and employment disputes through Mediation enables disputing parties not only to find their own solutions to the problems but also to continue relationships that would have otherwise been scarred and ruined through an adversarial approach. Resorting to Mediation does not have any adverse effects in terms of losing the right to pursue other processes because, if Mediation does fail, parties would still have the right to pursue other processes. The relevant laws recognize that the prescriptive period does not run while parties are engaged in Mediation9. Accessibility to Mediation services is assured and the process is easily initiated. Mediation is inexpensive.

Mediation research indicates that reasons for high satisfaction with Mediation include the facts that the process enables parties to address and deal with issues that they themselves have identified as important

9 Section 17 of the Mediation Boards Act No. 72 of 1998

allows them to present their views fully and gives them a sense of being heard

84% believed that they had saved costs

In summary, it seeks to eliminate all the weaknesses of the adversarial process which cause us to look for alternatives.

10 The Singapore Mediation Centre is a company incorporated under the Companies Act (Cap 50J of Singapore. It is a not-for-profit entity funded in part by the Singapore Government through the Ministry of Law of Singapore.

1 i Results of survey conducted in December 1999 based on 500 responses of users between January 1998 to August 1999. For full report of the study see Boulle and The, 2000.

How do the Commercial Mediation Centre and the Employment Mediation Services Centre function ?

Rules of the Centre :

Both the Commercial Mediation Centre of Sri Lanka (CMCS) and the Employment Mediation Services Centre (EMSC) have formulated Rules in terms of which Mediations are conducted by each Centre. These Rules provide for the procedure to be observed in conducting mediations, the fees to be levied, and the code of conduct for Mediators. The procedure is simple and easy accessibility is assured. Fees are payable according to specified rates and are extremely reasonable.

Accessing the Centre:

An application for Mediation can be initiated by any one party to the dispute or by all the disputing parties. The Application is in a simple format and requires only that the names and contact details of the parties be given along with a brief summary of the subject matter in dispute. If there is no agreement between the parties that Mediation be resorted to, the Center will talk to the reluctant party with a view to obtaining consent to pursue Mediation. Where all the parties agree to pursue Mediation. an Agreement to Mediate is entered into, by which the parties agree to abide by the Rules of the Centre and such other Rules as may be mutually agreed upon by them in the conduct of the Mediation.

Rules applicable to the conduct of Mediations :

The Rules in terms of which Mediations are conducted and to which the parties subscribe prior to the commencement of the mediation process, provide for some basic norms. Confidentiality with regard to what goes on in the Mediation sessions is of the essence. Thus, parties are mandated to maintain complete confidentiality with regard to all matters that are discussed during the Mediation sessions and are prohibited from revealing

such information in litigation, arbitration or other dispute resolution 1 process. This is an important feature of the Mediation process and is perhaps a feature which inspires confidence in the process.

Parties are required to attend the sessions in person and no legal representation is permitted. The sessions are private.

Parties are required to disclose fully and honestly ail matters which are relevant and which will aid the speedy resolution of the dispute. In this manner, the core issues and concerns which form the basis of the dispute can be surfaced and dealt with. Non-disclosure of material facts will only result in either an unsuccessful Mediation or a settlement which will not deal fully with relevant issues. There is then the potential of a further dispute arising at a subsequent time.

The Mediator may at times opt to have sessions with just one party at a time. However a majority of the sessions are those at which both parties will be required to be present together.

Where expert advice on technical aspects of the issues are necessary, the Mediator may, with the concurrence of the parties, call in expert assistance.

The Mediator :

The Rules of the CMCSL provides for the appointment of one Mediator for a dispute. The Rules of the EMSC provide for the appointment of one to three Mediators. The Mediator is essentially a non-partisan third party intervenient. No person who has an interest in the subject matter of the dispute or of its end result can serve as a Mediator. This is an important Rule which is strictly complied with.

Mediators are required to maintain complete confidentiality in respect of all matters coming to their knowledge during the mediation process from any source whatsoever. Mediators cannot be compelled by any of

the parties to divulge such matters to any authority whatsoever. This precludes parties from seeking to make use of Mediators as witnesses to any fact at any other dispute resolution process.

The role of the Mediator is to help parties resolve their concerns by taking them through the process which will focus on the key elements discussed above. The Mediator does not decide for the parties or sit in judgment over the issues that surface. The Mediator is however the master of and controls, the process.


Mediation as an effective alternative will succeed if the new Centres provide services that will be valued. Much depends on the quality of the skill and competence of the persons who will function as Mediators. Given the litigious nature of our people, it will be a while before confidence in alternative methods is established. In particular, the attention of the commercial community and those in management and labour will be focused on the progress made by the Centres.