In its post-crisis journey towards growth and development, Sri Lanka is being increasingly promoted as a venue for arbitration in the region and globally. Simply put, arbitration is a methodology of resolving disputes under the due process of law based on a contract signed by two parties.

In a recent LMDtv interview, the Chairman of the Board of Governors of the Sri Lanka National Arbitration Centre (SLNAC) Hiran de Alwis said that arbitration “is consensual but binding.”

“It’s also a judicial process but instead of going to courts, parties agree to resolve their disputes by arbitration,” he explained, noting that “they appoint an arbitrator who is bound to award something similar to a court judgement based on the facts and law regarding that particular dispute.”

While the state appoints a court judge, an arbitrator is appointed on the principle of party autonomy. “The parties choose their arbitrator but he or she has to be independent, impartial and competent,” he added.

Arbitration is preferred because it can resolve conflicts in private. The decision arising from an arbitration procedure is fully recognised by the law, which de Alwis says is one reason why having an awareness of the process is paramount.

He explained: “For example, if parties to a contract say they resolve their disputes by arbitration, you cannot go to courts. If you go to courts and the other party doesn’t object, then of course the court process can go on; but invariably, a party will object.”

Over 99 percent of international trade worldwide is governed by arbitration and a sound arbitration mechanism is marketed as a tool for a country’s economic progress along with indices such as ease of doing business.

“Theoretically, Sri Lanka has everything,” he said, in reference to the country’s legal framework – its Arbitration Act and the Arbitration Ordinance before that, which is over 100 years old. He explained that “all the legal mechanisms are there so what we need is a little efficiency in the process to market it.”

“I’m a strong proponent of the concept of promoting Sri Lanka as an arbitration hub in the region,” de Alwis revealed.

One of the drawbacks Sri Lanka has when it comes to putting this concept – which has become a multimillion dollar industry in countries like Singapore and Malaysia – into action is implementation.

“It’s high time our region and Sri Lanka get a piece of the pie,” he averred, mentioning that the country would benefit “not only in a financial sense” but also in terms of business and investment prospects.

He noted: “Faster dispute resolution is good for business and our professionals.” We have top ranking doctors, accountants and so on venturing overseas, and showcasing their talents, de Alwis added: “Even in this field, there are specialists who are qualified arbitrators, and have studied the subject and gained experience.”

“There are retired personnel from the judiciary and lawyers, and also allied professionals like architects and engineers – all of them can be part of the arbitration process so there’s a huge opportunity for professionals,” de Alwis pointed out.

Where there’s trade, there are disputes. “There is nothing wrong in disputes. You must know how to resolve your disputes because you can’t resort to violence,” he said, adding that “there are other mechanisms established worldwide.”

De Alwis declared: “Within the region, we can promote Sri Lanka as an arbitration hub because you want a neutral venue for it.”

“A business in India and Pakistan might have a dispute and may not want to go to the courts of arbitration in either country. We’re well placed and respected within the region as a neutral location. We have the competence of our professionals, the legal knowledge and English language skills,” he maintained.

And he summed up: “With the stability that the country is luckily gaining, I think we have a good opportunity to take this concept forward.”