SRI LANKA Law and Practice Contributed by: Amrit Rajapakse, Law Chambers of Amrit Rajapakse
1. General 1.1 Prevalence of Arbitration International arbitration is a popular method of resolv - ing disputes in Sri Lanka. Where a choice is available, domestic parties gen - erally prefer to resort to litigation over international arbitration. International arbitration is mostly used in Sri Lanka when an arbitration clause is included in the parties’ contract, usually at the request of the foreign party to the contract. 1.2 Key Industries There were no particular industries that experienced significant international arbitration activity in Sri Lanka in recent years. 1.3 Arbitration Institutions The arbitral institutions that are most used for interna - tional arbitration in Sri Lanka are the Sri Lanka Nation - al Arbitration Centre (SLNAC) and the CCC-ICLP International ADR Centre (IADRC). Both institutions administer ad hoc arbitrations and arbitrations under their own rules. They provide hearing room facilities, interpretation and transcription services and secre - tarial services, which make them a popular choice for international arbitrations. A new arbitration institution, the Colombo Internation - al Arbitration Centre (CIAC), was established in Sri Lanka in 2024-25. It is affiliated to the ICC Sri Lanka chapter and applies the ICC Arbitration Rules. 1.4 National Courts The high courts of Colombo, Jaffna and Kandy have been designated by the Minister of Justice to hear matters arising under the Arbitration Act, No 11 of 1995 of Sri Lanka. The courts’ jurisdiction covers both domestic and international arbitrations. The jurisdic - tion of the High Court of Colombo is presently exer - cised by the Commercial High Court. Decisions of a high court in the exercise of its enforce - ment or setting aside jurisdictions may be appealed to the Supreme Court by way of leave to appeal.
2. Governing Legislation 2.1 Governing Law
The Arbitration Act, No 11 of 1995 (the “Act”) is the national legislation governing international arbitration in Sri Lanka. The Act was based on the draft Swedish Arbitration Act of 1994, which was in turn influenced by the UNCITRAL Model Law of 1985. The Act could therefore be said to be indirectly based on the 1985 Model Law. In fact, many of the Act’s provisions are either identical to, or very close re-enactments of, the Model Law. The Act diverges from the Model Law in that the Act applies to both domestic and international arbitration, whereas the Model Law applies only to international commercial arbitration. In addition, Articles 3, 4, 5, 9, 16 (2), 22, 23 (1), 26 and 32 of the 1985 Model Law have no corresponding provision in the Act. 2.2 Changes to National Law The Act has not been amended to date. A draft new Arbitration Act intended to repeal and replace the Arbitration Act 1995 was prepared by a committee of experts appointed by the Minister of Justice and circulated for public comments in 2022. The draft act, which is yet to be enacted, will include features of the UNCITRAL Model Law 2006 and current international best practice. The Act, in common with Article 7 (2) of the 1985 Model Law, requires an arbitration agreement to be in writing for it to be enforceable. In addition, Section 4 of the Act requires that the arbitration agreement should not be in respect of a matter that is either con - trary to public policy or not capable of determination by arbitration. 3.2 Arbitrability The Act does not specify any subject matters that may not be referred to arbitration. While arbitrability is a requirement under Section 4 of the Act (see 3.1 Enforceability ), and lack of arbitrability is a ground for setting aside an award and for refusing recogni - 3. The Arbitration Agreement 3.1 Enforceability
799 CHAMBERS.COM
Powered by FlippingBook