The Recognition And Enforcement Of International Settlement Agreements Resulting From Mediation Act

• Coming into Force: 31 January 2024
• Year: 2024
• Act Number: 5
• Citation: No. 5 of 2024

AN ACT TO GIVE EFFECT TO THE UNITED NATIONS CONVENTION ON INTERNATIONAL SETTLEMENT AGREEMENTS RESULTING FROM MEDIATION KNOWN AS THE SINGAPORE CONVENTION ON MEDIATION; TO MAKE PROVISIONS FOR THE RECOGNITION AND ENFORCEMENT OF INTERNATIONAL SETTLEMENT AGREEMENTS AND TO PROVIDE FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THERETO.PreambleWHEREAS the Convention on International Settlement Agreements Resulting from Mediation (hereinafter referred to as the "Convention") was adopted by the United Nations General Assembly on the Twentieth day of December Two Thousand and Eighteen, and subsequently came into force on the Twelfth day of September Two Thousand and Twenty:AND WHEREAS having recognised the value of mediation as a method for settling commercial disputes amicably and noting the increase of the use of mediation internationally and nationally, the Government of Sri Lanka signed the Convention on the Seventh day of August Two Thousand and Nineteen:AND WHEREAS establishing a legal framework on international mediation settlements under the Convention would reduce the instances where disputes result in termination of commercial relationships and contribute to the development of harmonious international economic relations:AND WHEREAS it is necessary for the Government of Sri Lanka to enact legislative provisions to give effect to Sri Lanka’s obligations under the Convention:NOW THEREFORE BE it enacted by the Parliament of the Democratic Socialist Republic of Sri Lanka as follows: -

Short title and the date of operation1 (1) This Act may be cited as the Recognition and Enforcement of International Settlement Agreements Resulting from Mediation Act, No. 5 of 2024.(2) The provisions of this Act shall come into operation on such date as the Minister may, by Order published in the Gazette certify as the date on which the Convention enters into force in respect of Sri Lanka.

Application of the Act2 (1) The provisions of this Act shall, subject to the provisions of section 3, apply to a written settlement agreement which is international by nature at the time of its conclusion, and which has resulted from mediation and has been concluded by parties to resolve a commercial dispute (hereinafter referred to as the "international settlement agreement").(2) The application of the provisions of this Act to any international settlement agreement shall be subject to the same extent specified in such reservations as may be declared under Article 8 of the Convention by the Government of Sri Lanka.

Settlements excluded from the scope of this Act3. The provisions of this Act shall not apply to- (a) settlement agreements that have been entered into, to resolve a dispute in relation to - (i) a transaction engaged in by one of the parties who is a consumer, for personal, family or household purposes;(ii) family matters, inheritance, or employment matters; or(b) settlement agreements - (i) that have been concluded or recorded as a judgement of a court, in the course of judicial proceedings and are enforceable as a judgement of a court; or(ii) that are enforceable as an arbitral award.

International settlement agreement4. A settlement agreement shall be international by nature at the time of its conclusion where - (a) at least two of the parties to the settlement agreement have their places of business in different States; or(b) the State in which the parties to the settlement agreement have their places of business is different from either - (i) the State in which a substantial part of the obligations under the settlement agreement is performed; or(ii) the State with which the subject matter of the settlement agreement is most closely connected.

Validity of international settlement agreement5. Every international settlement agreement shall be valid and enforceable unless a decree of the High Court is refused upon application made under section 6, and the obligations assumed thereunder by the parties shall be honoured by the parties as in the case of any other contractual agreement.

Application to the High Court6 (1) A party to an international settlement agreement may make an application to the High Court to have the international settlement agreement entered as a decree of the High Court for the purpose of enforcing such international settlement agreement.(2) Upon receiving an application under subsection (1), if the High Court is satisfied that no grounds have been adduced to adjourn the proceedings or to refuse the...