SLIIT BBA (Special) Honours: ADR Methods in Commercial Disputes

This assignment from the Business Law module explores Alternative Dispute Resolution (ADR) methods, crucial for resolving commercial disputes. It begins by highlighting the limitations of traditional litigation, such as delays and high costs, and introduces ADR as a more efficient alternative. The assignment details various ADR methods, including Arbitration, Mediation, Conciliation, and Ombudsmen Schemes, with a specific focus on their application in Sri Lanka. It explains the advantages of ADR, such as privacy, flexibility, and cost-effectiveness, while also acknowledging potential disadvantages. The document outlines the legal framework for ADR in Sri Lanka, including the Arbitration Act and the Mediation Boards Act, and discusses the roles of mediation and conciliation in settling commercial and other disputes. The assignment further examines the Commercial Mediation Center of Sri Lanka and its role in promoting ADR, providing a comprehensive understanding of ADR mechanisms and their benefits in resolving conflicts efficiently.

Business Law Module
Commercial Disputes- Alternative Dispute
Resolution (ADR)
(Lecture 11)
BBA (Special) Honours Degree
Sri Lanka Institute Of Information & Technology (SLIIT)
12-Sep-20 1

Course Outline
 The Legal System and the Legal Environment of Business
 Business Ethics and Corporate Governance
 Laws associated with different Organizational Structures
 Sole Proprietorship & Partnership Business
 Law relating to Companies
 Contract Law – Part A-Definition and Contract Types
 Contract Law-Part B
 Contract for Sale of Goods
 Employment Law-Part A
 Agency and Employment Law-Part B
 Intellectual Property Law Commercial Disputes-Alternative Disputes Resolutions-ADR Introduction to Negligence in Business
12-Sep-20 2

QUESTION
• What are the different methods of Alternate
Dispute Resolution (ADR)?
-Introduction to or explanation of methods of ADR
(2 marks)
-Identification of Conciliation, Mediation,
Arbitration, Ombudsmen Schemes (at least 3
methods –1 method carry 1 mark-total 3 marks)

Alternative Dispute Resolution (ADR)
• Arbitration
• Mediation
• Conciliation
• Ombudsmen Schemes
Alternative Dispute Resolution processes, often
referred to as "ADR" are dispute resolution
processes that are alternatives to litigation and
which provide for the resolution of disputes outside
of courts of law.

Perils of Litigation
• There is a pervading disappointment over the
court system/litigation for several reasons. Long delays in the court system notwithstanding
the saying that ‘Justice delayed is justice denied’. Litigation is also costly especially the fees payable
to lawyers. It is said that the real winners in
litigation are only lawyers who appear for both
sides! The English adversarial method that is followed in
Sri Lanka is also not the best suited to the
commercial world.

• Litigation is a process where opposing parties
to a dispute (the disputants) assume positions
to enforce or defend a legal right in a court of
law presided over by a judge who gives a
verdict on the rights and liabilities of the
disputants.

Introduction to ADR
• Generally businessmen know the perils and
uncertainty of litigation and will do to their best
to avoid resorting to judicial process to resolves
their disputes.
• ADR is settlement oriented.
ADR methods & procedures (arbitration, mediation,
conciliation, ombudsmen schemes) are looked
upon more favorably and also helps facilitate trade
and business.

ADR in Sri Lanka
• In Sri Lanka, the two ADR mechanisms which
are recognized by law are Arbitration and
Mediation.
Arbitration is used largely for the resolution of
commercial disputes and is governed by the
Arbitration Act, No. 11 of 1995. There are
Centers that have been established, which
facilitate the conduct of arbitrations in
compliance with the rules of those centers.

ADR in Sri Lanka..
There is not much public awareness of the
availability of ADR methods in place of litigation.
• Banks have increasingly been referring issues
regarding debts to mediation boards and
ombudsman schemes.
• Commercial disputes have been settled through
arbitration.
• Labour legislation provides for the resolution of
labour disputes by reference to arbitration,
conciliation and out of court settlements.

WHY ADR in commercial disputes?
• Where commercial disputes are concerned,
the faster a dispute is resolved by parties, it is
far better for parties who can continue their
commercial activities without being tied down
to a long and tedious adjudicatory process.
• This is where ADR methods have gained
increasing popularity.

Advantages of ADR
• ADR is a private process, which is an
advantage to those who do not want details of
their dispute to be disclosed in open court as
such disclosure before the public and the
attendant publicity can jeopardize business
interest which are vital in case of commercial
enterprises.

Advantages of ADR..
• In principle ADR methods are flexible and
adaptable and as a result quicker & more
efficient then expensive litigation. Parties are
also free to agree to limit the extent of
disclosure of documents, to submit evidence
in writing, to impose time limits on
submissions and generally to agree to any
other measures to save time and money.