Ending tsunami legal disputes through mediation
Post - tsunami rebuilding in process
On June 15, the Minister of Justice and Judicial Reforms gazetted the
operation of Mediation (Special Categories) Act No. 21 of 2003 in
relation to tsunami disputes. The Legal Aid Commission had been
advocating the need for a special dispute resolution mechanism to deal
with a myriad disputes, especially with regard to property and equitable
rehabilitation assistance of the half million tsunami displaced persons.
When Mediation (Special Categories Act) No. 21 of 2003 was presented
in Parliament, its constitutional validity was challenged before the
Supreme Court. The petitioners contended that the Special Mediation Act
which could be extended by the Minister to cover social and economic
issues is interfering with the judicial process.
The Supreme Court rejected the contention on the basis 'that Minister
can only prescribe by Gazette Notification, types of disputes to be
referred and the qualification of the Mediators'. The panel of mediators
was not appointed by the Minister but by the Mediation Board Commission
appointed under Mediation Boards Act No. 12 of 1988 by the President.
Three out of five Commissioners should have held judicial office
either in the Supreme Court or in the Court of Appeal. Independence of
the Special Mediation Boards was thus secured.
Ironically, the skill and unblemished reputation of the superior
courts of Sri Lanka for integrity, independence and the commitment to
uphold the principle of Rule of Law is a major reason for the proclivity
of an adversarial litigation culture in Sri Lanka.
Despite the perennial complaints of Laws Delays and unsalutary
professional practices of some lawyers and the recalcitrant attitude of
some judges which underpin the Laws Delays, Sri Lankan litigants, human
or juristic, are submerged in a litigious culture. They wallop at
winning cases even pyrrhic victories at great cost sometime contributing
to social discord.
Sri Lanka is considered to be the second most litigious society in
the contemporary world, a record that we should not be proud of as
litigated victories and defeats can increase violence and even result in
gruesome murders like the reported Hokandara quintuplet killing.
Despite the existence of socio-religious creeds of non-violence
influencing the Sri Lankan psyche, social violence - whether they erupt
due to bitter litigations, elections or ethnic or religious prejudices
appear to define modern Sri Lankan society. We are no longer
peace-loving or peaceful. Even the demonstrations for peace end up in
Historically, the greatest protagonists of mediation as the basis of
non-violent dispute resolution were the founders of great religions.
Moses, The Buddha, Jesus Christ, Prophet Mohamed were all great
mediators. In more recent times Mahathma Gandhi and Dr. Martin Luther
King espoused the doctrine of non-violence as a political philosophy.
Negotiation and mediation was their chosen strategy.
In the modern world, after the great catastrophe of the two World
Wars, the victorious nations set up the United Nations as the superior
mediator of international disputes. The comparative decrease of
international wars during the past fifty-two years was largely due to
the UN mediation efforts.
All mediation by definition should be facilitative where emotional
barriers between parties are addressed by improving the communication
process and identifying a range of mutually beneficial options. In the
profit-driven commercial world, where rational, profitable, and timely
decisions are made, negotiation is the primary method of dispute
The failure of inter-party negotiations, mainly due to subjective
reasons, sequentially calls for provision in commercial agreements
mediation clauses. If mediation fails parties may resort to arbitration
by agreement of all disputants or resort to adversarial litigation as a
Since the late Seventies, a growing trend in the developed countries,
specially in the USA and Scandinavian countries as well as international
agencies mandated to resolve specific sector disputes, such as
intellectual property, is to develop a hybrid process termed "Med-Arb" -
an abbreviation for mediation - Arbitration process.
"Med-Arb" procedure for dispute resolution is triggered when a
commercial agreement provides that in the event of any dispute arising
out of the contract it will be resolved by negotiation with the
assistance of a mediator failing which the matter will proceed to
arbitration. The fundamental requirement is that the use of the 'Med-Arb'
process should be agreed upon before hand.
As an illustration, we can cite the ingredients in the World
Intellectual Property Organisation's "Med-Arb" clause. The first part of
the 'Med-Arb' clause provides for the reference of all disputes arising
from the contract to be submitted to be settled in accordance with WIPO
mediation rules. The place of mediation and the language to be used in
the mediation should be included in the contract.
The second limb of the clause deals with the question what follows if
the dispute is not settled by mediation within the stipulated period of
time. The clause provides that if the dispute is not settled within in
the stipulated period (i.e. 90 days/six months) from the commencement of
mediation, it will be referred to arbitration if either party files a
request for arbitration under the WIPO arbitration rules or in the
alternative if before the expiry of the stipulated time period if any
party fails to participate in the mediation, the other party has the
right to request for arbitration for final adjudication in accordance
with WIPO arbitration rules.
The arbitral tribunal can consist of a sole arbitrator or a panel of
three and the place and the language of arbitration should be
stipulated. The WIPO 'Med-Arb' clause could be suitably modified and
adopted to suit the Sri Lankan Arbitration Law and the several
Many transnational commercial disputants prefer to avoid the delay
and exorbitant expenses, when settling international commercial
disputes. But also at the same time prefer to have a legally-recognised
and a binding and enforceable conclusion to their commercial disputes.
On the other hand the 'Med-Arb' process which combines the two
traditional methods assures a non-adversarial mediation phase in the
resolution of the dispute. In this anticipation of eventual arbitration
if mediation fails, the disputants try to act in a non-adversarial
manner and reasonably, which help to dissolve subjective emotional
However, this prior knowledge that the failure of negotiation will
lead to arbitration would make the parties extremely cautious and may
withhold vital confidential information needed for successful mediation.
The task of the mediator is more difficult than an arbitrator or
judge who is called upon to decide on the dispute on the applicable law.
But the task of a 'Med-Arb' neutral is even more difficult. The prestige
of the 'Med-Arbitrators' should be so high, that often, former judges of
the superior courts of third countries with reputable legal systems are
sought to perform this function.
The mediator in the 'Med-Arb' process could transit to arbitration
mode if the contract so stipulates of if the parties agree. However, the
confidential information received from parties in mediation caucuses
should not be used in making the arbitral award unless the party
concerned continues to rely on the confidential process even during the
This is an extremely sensitive process and it is essential that the
mediator checks with the parties before hand whether the information
confided in him during the mediation caucuses could be used when the
mediator assumes the role of an arbitrator.
In Sri Lanka, like many other developing countries 'Med-Arb' clauses
are rarely incorporated in commercial contracts. The main reason is that
we do not have the necessary institutions or skill training programs to
The Arbitration Act No. 11 of 1995 while modernising the Arbitration
law to keep abreast with international developments had also empowered
in its section 14 that the "Arbitration Tribunal with the agreements of
the parties" use "mediation, conciliation, or any other procedure at any
time during the Arbitral proceedings to encourage settlement." Hence
incorporation of 'Med-Arb' clauses in a commercial contract is legally
feasible and could contribute to fill a void, developing modern legal
norms and practices to meet the challenges of globalised commerce.