Arbitration: For quicker settlement of disputes | Sunday Observer

Arbitration: For quicker settlement of disputes

Modern businesses need to progress seamlessly to be competitive in the global market and time is a deciding factor on their forward march. As such, arbitration plays an important role in conflict solving where speedy remedies could be obtained, Chief Legal Advisor, Sri Lanka National Arbitration Council, Hiran de Alwis said.

He was speaking at the seminar ‘Importance of SARCO (South Asian Regional Cooperation) as a regional arbitration centre for development of trade and investment and the context of arbitration in Sri Lanka’ held in Colombo recently.

“There is enormous potential to use arbitration as a mechanism to support overcoming business disputes. This potential has not been realised fully,” de Alwis said. Over 80 percent of the cases taken up for arbitration are finalised within a year with the balance taking more time. This is common in the SAARC region. Abitration is conducted in English and if the regional arbitration centre is available then the possibility of using the local language is there.

There is a lot of background to take arbitration forward. However, one of the biggest challenges is the sittingcapacity in local arbitration, he said.

Developing a regional arbitration centre is an advantage as the centres in Singapore and Dubai are used at present which involves enormous cost to the parties. The importance of a regional arbitration centre is highlighted as it will facilitate developing cross broader trade. Arbitration is the most economical mechanism to dissolve disputes within the private sector where speed and efficiency is vital,” he said.

The aggrieved parties themselves can promote this. There is a need to be careful when signing the documents as the clauses are enforceable which could be at a disadvantage to the parties to the contract.

SARCO (South Asian Regional Cooperation) is the catalyst to develop regional trade. The regional arbitration centre is a cost effective method to drive regional trade. As arbitration is vital in international trade, the importance of the regional centre will be to prioritise interventions and institutional mechanisms. There is a need for law firms to specialise in arbitration to keep abreast of global developments.

The free trade agreements give room to make progress. It enables speedy conflict resolution without hampering the progress of the venture.

Secretary General Federation of Chamber of Commerce and Industry, Ajith D. Perera said -

“Investments are needed for a country to develop and it should be a significant percentage of the country’s GDP. Sri Lanka recorded an impressive figure in investments last year with US $ 1.7 billion accounted for mostly by the manufacturing, infrastructure and services industries. This is the highest in the recent past and a major increase in the FDIs.

“We need to promote FTAs as a tool to attract investments and free flow of trade. However, just because two countries sign an FTA, it will not benefit them in the same way, We should be cautious of the strategy, approach, design and perceived benefits when signing an FTA which could improve trade further.”

Potential investors are looking at aspects such as how fast they can start a business, how secure their investments are and how efficient the legal framework is. Therefore, the Ease of Doing Business index needs to be improved as Sri Lanka is ranked at the 111th position at present. We need to do much more to take this index up. The National Export Strategy, Trade Information Portal and the Single Window facility are good moves to make the process more efficient and effective, he said.

It is necessary to structure a proper mechanism to solve disputes and arbitration is an effective way of doing this. There is a need to create awareness among the SME sector regarding arbitration as it is a time and cost saving method of dispute solving, he said.