States the steps in negotiation process. Elaborate the difference and similarity of litigation and arbitration?

Introduction

Negotiating is the process by which two or more parties with different needs and goals work to find a jointly satisfactory solution to an issue. Negotiation is a sequence of actions where two or more parties address the proposals and demands of each other for coming into an agreement. Besides negotiation is a part of the human activity that is connected with solving problems which is oriented towards nonviolent way of solving disputes. Culture is the key structure of negotiation as it influences who are the active negotiators, their strategies, behavior and the negotiating process itself (Zartman W, 2008)[1]. Understanding more about the negotiation process allows us to manage our negotiations with confidence increases the chance that the result will be positive for both parties.

The negotiation process is a complex series of actions that seeks to provide a mutually satisfying outcome to two nonconforming parties.

 Characteristics of Negotiation:

• Negotiation involves two or more parties who need each other’s involvement achieving a desired result. There is a common interest that connects the parties.
• The parties start with different opinions or objectives. These differences prevent agreement. The parties are willing to co-operate and communicate to meet their goals.
• The parties can mutually benefit or avoid harm by influencing each other.
•  The parties realize that any other method will not produce desired result.
• The parties think that negotiation is the best way to resolve their differences (or at least, a possible way)
• They also think that they may be able to influence the party to modify their original position.

 Actually, negotiation process itself involves dealings between people. This interaction might be in person, by telephone, letter etc. because it is personal, emotions and attitudes will always be important.

Eight stages of negotiation process:

This is a unique combination framework that puts together the best of many other approaches to negotiation. It is particularly suitable to more complex, higher-value and slower negotiations. Eight steps for negotiation are given below –

v     Prepare:  Know what we want. Understand them.

v     Open:  Put our case. Hear theirs.

v     Argue:  Support your case. Expose theirs.

v     Explore:  Seek understanding and possibility.

v     Signal:  Indicate readiness to work together.

v     Package: Assemble potential trades.

v     Close: Reach final agreement.

v     Sustain:  Make sure what is agreed happens.[2]

 

Successful Negotiating Tips-

• Show respect and understand the other person’s values and beliefs
• Recognize and define the problem
• Look for different possible solutions
• Be reliable
• Communicate properly[3]

 Goal of Negotiation-

The objective of dialogue should be such that at the end, no matter what the result or result, it is beneficial for all and all draws close out as a winner. In a winning dialogue, there is no ‘I’ or ‘You’; there is only ‘We’. That is the principle motto of a winning dialogue strategy. It is often observed that ‘losers’ will perpetually a go to resist and retaliate in resistance to the ‘winners’. This is where the ‘ego’ moves into and troubles start.

Litigation

 In Bangladesh, the cases go on for years. By the time competitor win, they are already covered higher and out of the market. Litigation is the process of taking a covering through court. The litigation process is extent regular in civil lawsuits. Litigation[4] covers the process of bringing and pursuing a lawsuit, and encompasses the entire process. A lawsuit is a case authorized by law brought by one person or entity against another person for enforcing a right. The participants in these events such as applicant are called litigants while the trial or case is ongoing. Attorneys[5] who represent the litigants in court are referred to as litigators. Although in some instances an attorney is required to litigate; in most matters, parties are allowed to represent themselves should they chose to do so.

However, litigation involves many complex legal issues, which need expertise and knowledge of the law that governs the argument as well as the laws governing the procedures to be followed while litigating a case. Litigation is one way that people and corporate entities resolve disputes. The parties depend on a judge to determine a legal question or matter.

The Role of the Litigation Attorney-

Litigation attorneys, also known as “litigators” or “trial lawyers,” pose plaintiffs and defendants in civil cases and do all stages of the litigation process from analysis, pleadings and innovation to pre-trial, experiment, settlement and appeal.

Below is an overview of the varied projects litigation attorneys begin during the course of litigation.

• Initial Case Investigation
• Trial
• Settlement
• Appeal

Advantages of litigation

Only 2% of divorce cases go to trial. Most divorcing couples do not want to end up in court. An actual trial before a judge is truly the last resort for couples who are so well established in their positions that compromise is impossible. In a trial, each spouse’s attorney argues their client’s position on the disputed issues. Witnesses, including family members or friends, may be called and experts may be brought in by each side to give opinions on childcare arrangements or to value property.[6]

 Some advantages of litigation are given below –

v     It may be the only choice left after all else fails

v     Decisions can be appealed

v     Parties can get their day in court

Disadvantages of litigation

Everything of the world has drawback in spite of its benefit. Therefore, some disadvantages of litigation are given below –

v     Trials are open to the public, as are all pleadings and papers filed with the court.

v     Trials can take a lot of time. If the court has a busy docket, the case can be broken up and tried in bits and pieces on different days.

v     Parties tend to involve their children and try to get them to take sides.

v     It is very expensive, financially and emotionally.

v     Trials lock parties into their positions, believing they are the victim and the other partner the bad character. Often they call friends and family in to back up their side of the story.

v     Co-parenting successfully is difficult after a trial.

v     Parties never forget the bad things their spouse said about them at trial.

Arbitration

“And therefore, as when there is a controversy in an account, the parties must by their own accord, set up for right Reason, the Reason of some Arbitrator…to whose sentence they will both stand, or their controversy must either come to blows, or be undecided, for want of a right Reason constituted by Nature; so is it also in all debates of what kind so ever.”- Thomas Hobbes.[7]

In Bangladesh, the law of arbitration was contained mainly in the Arbitration Act, 1940, there being separate Acts dealing with the enforcement of foreign awards. There were also stray provisions as to arbitration, scattered in special Acts. Three types of arbitration were contemplated by the Arbitration Act of 1940, namely (i) Arbitration in the course of a suit, (ii) Arbitration with the intervention of the court, and (iii) Arbitration otherwise than in the course of a suit and without the intervention of the court in practice; the last category attracts the maximum number of cases.[8]

Once an arbitration agreement is entered into for submitting future differences to arbitration, it is not, necessary to obtain the fresh consent of all the parties for a reference to arbitration at the time when the dispute actually arises.

Bangladesh has recently enacted the Arbitration Act 2001 (the Act). It came into force on 10 April 2001, repealing the Arbitration (Protocol and Convention) Act 1937 and the Arbitration Act 1940. The new Act was again amended in 2004 in certain respects. The Act consolidates the law relating to both domestic and international commercial arbitration. It thus creates a single and unified legal regime for arbitration in Bangladesh. The new Act is principally based on the UNCITRAL Model Law; it is a patchwork quilt as some unique provisions are derived from the Indian Arbitration and Conciliation Act 1996 and some from the English Arbitration Act 1996.

The features of the new act are:

• The preamble specifically mentions that it is “An Act to enact the law relating to international commercial arbitration, recognition and enforcement of foreign arbitral award and other arbitrations.”
• In an international commercial dispute, one of the parties to the dispute must be either a firm registered abroad or a foreign national.
• The dispute in question must arise out of a legal relationship, whether contractual or not, but considered as a commercial dispute under the law in force in Bangladesh.
• The parties are free to determine the number of arbitrators. If the parties fail to fix the number of arbitrators, the tribunal is to consist of three arbitrators.
• The parties may choose an arbitrator or arbitrators of any nationality and the chairperson of the tribunal may be of any nationality if the parties accept that.

Here are some definitions of Arbitration given by some popular organizations and courts:

International Chamber of Commerce (ICC)

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”[9]

London Court of International Arbitration (LCIA)

“Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause.

• The number of arbitrators shall be [one/three].
• The seat or legal place of the arbitration shall be [city and/or country].
• The language to be used in the arbitral proceedings shall be [language].
• The governing law of the contract shall be the substantive law of [jurisdiction].”[10]

International Centre for Settlement of Investment Disputes (ICSID)

 “The [Government]/[name of constituent subdivision or agency] of [name of Contracting State] (hereinafter the ‘Host State’) and [name of investor] (hereinafter the “Investor”) hereby consent to submit to the International Centre for Settlement of Investment Disputes (hereinafter the ’Centre’) any dispute arising out of or relating to this agreement for settlement by [conciliation]/[arbitration]/ [conciliation followed, if the dispute remains unresolved within [time limit] of the communication of the report of the Conciliation Commission to the parties, by arbitration] pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (hereinafter the ’Convention’).”[11]

Advantages of arbitration

There are several advantages for using arbitration. The first advantage is the flexibility afforded to the parties who are in arbitration. The adversaries can choose their own arbitrator. Another advantage to arbitration is that it is a much quicker process than litigation.. Third, arbitration is a private matter .There is an informality to the hearings that allows the parties and the arbitrator to go about the dispute without presenting information to the public sector. This helps businesses especially because they avoid giving away any potential trade secrets or information that may be confidential.

Disadvantages of arbitration

The disadvantage is that a party (especially a consumer) may not feel that their rights are being preserved when they were placed in a position. Otherwise, the agreements may be instituted by a larger, more powerful legal entity that may have more control over the situation. If a large firm includes an arbitration clause in its agreements and there is no provision allowing for the recovery of attorney’s fees, this can amount to a huge burden on a party that does not have the backing of the large firm. Therefore, a party may find itself at a disadvantage when he or she cannot appeal a decision.

Similarity between Arbitration & Litigation

 Litigation in any court is going to be more costly than litigation in any arbitral forum. Because different area which permit liberal pre-trial advance and most arbitrators are reluctant to permit penetrate after exchange of articles and possibly some answers to in writing questions. Depositions, generally the most costly pattern of breakthrough, are disappointed in arbitration. However, counting upon which arbitral forum someone selects and who the arbitrators are someone may find that much of the breakthrough and shift perform that inhere in court situations will be present, albeit to a lesser stage, in the arbitral forum.[12]When the inquiry alterations to pace and effectiveness though the response is less clear.

A referee who declares on attaching with his plan will make the parties to the line on the topic of timing. An arbitrator or assembly of arbitrators, although, is probable to be more accommodating. Therefore, a party who desires to pull out an arbitration advancing will generally have a simpler time managing that. On the other hand, some referees are not as insistent upon sustaining a time agenda and some enclosures have long backlogs. In these examples, it would generally take longer, possibly much longer, to get to test in a court forum than in an arbitral forum. The inquiry of which advancing is more effective counts mostly on who the referee is and who the arbitrators are and how insistent they are upon setting up a agenda and attaching to it.

 Expense: As everyone with understanding with the court procedure recognizes, litigation has become very expensive. The propounding of and replying to interrogatories and written material appeals and the taking of depositions can promptly manufacture up thousands, tens of thousands and even hundreds of thousands of dollars in expenses. This is mostly so where the innovation appeals are argued, as they regularly are.

Speed to Trial: The subject of whether the arbitration forum is over seen to receive the load deduced sooner is more problematic than the charge issue. There is a wide disparity between time from illness to test among the various courts and even on the same court where the practices of the judges of that court vary from one to the other.

Most Efficient Resolution: With award to efficiency, which merges the distributes of charge and the measure of time and action fascinated in achieving resolution, it is more probable in bulk instances that arbitration will be more efficient. As gestured above, it tends to retain down the measure of time and action paid out on various types of research and motion practice. On the other hand, judges sometimes exercise tight calm through the timing and measure of proceedings

in the past them.

Unlike litigation, which can take years, arbitration and mediations broadly articulating can be finished in days or weeks. Arbitration — a legally adhesive bandage process in which the parties hire a neutral arbitrator to perceive rudimentary evidence in the covering and render a judgment that cannot be appealed — has enhanced in popularity in recent years. However, numerous consider the drawbacks to arbitration have enhanced as well.

Difference between Arbitration & Litigation

Public/Private, Formality–-The arbitration process is private, between the two parties and informal, while litigation is a formal process conducted in a public courtroom.

Speed of Process—The arbitration process is quick. Once an arbitrator is selected, the case can be heard immediately. In a civil litigation, on the other hand, a case must wait until the court has time to hear it; this can mean many months, even years, before the case is heard.

Cost of the Process--The costs for the arbitration process are limited to the fee of the arbitrator (depending on the size of the claim, expertise of the arbitrator, and expenses), and attorney fees. Costs for litigation include attorney fees and court costs, which can be very high.

Selection of Arbitrator/Judge––Parties in the arbitration process decide jointly on the arbitrator; in litigation, the judge is appointed and the parties have little or no say in the selection. The parties may have some say in whether a case is heard by a judge or a jury.

Use of Attorneys——-Attorneys may represent the parties in arbitration, but their role is limited; in civil litigation, attorneys spend much time gathering evidence, making motions, and presenting their cases; attorney costs in litigation can be very high.

Evidence allowed—-Arbitration process has a limited evidence process, and the arbitrator controls what evidence is allowed, while litigation requires full disclosure of evidence to both parties. The rules of evidence do not apply in arbitration, so there are no subpoenas, no interrogatories, and no discovery process.

Availability of Appeal——-In binding arbitration, the parties usually have no appeal option, unless an appeal has been included in an arbitration clause. Some arbitration decisions may be reviewed by a judge and may be vacated (removed), if you can prove that the arbitrator was biased. Litigation allows multiple appeals at various levels.[13]

However, difference between arbitration VS litigation is shown through a diagram

Item	Arbitration	Litigation
Private/Public	Private – between the two parties	Public – in a courtroom
Type of Proceeding	Civil – private	Civil and criminal
Evidence allowed	Limited evidentiary process	Rules of evidence allowed
How arbitrator/judge selected	Parties select arbitrator	Court appoints judge – parties have limited input
Formality	Informal	Formal
Appeal available	Usually binding; no appeal possible	Appeal possible
Use of attorneys	At discretion of parties; limited	Extensive use of attorneys
Waiting time for case to be heard	As soon as arbitrator selected; short	Must wait for case to be scheduled; long
Costs	Fee for arbitrator, attorneys	Court costs, attorney fees; costly

 Conclusion

 Litigation is expensive and it starts with one party. But the other party, the defendant, should respond in ordering to the allegation and may claim that it has endured a wrong. Arbitration is alike to litigation, except that it is usually is a shorter method with less advance and less motion.  The parties select the arbitrator or arbitrators, whereas contractual negotiation clauses infrequently. Besides the parties choose the arbitrator or arbitrators, whereas contractual arbitration clauses occasionally permit the arbitration.

 Bibliography

• Charlton, R. (2000), Dispute Resolution Guidebook. Star Printery Pty Ltd, Erskineville NSW.(2nd edition) Ligare Pty Ltd, Riverwood NSW.
• “How to negotiate with other nations and cultures” From www.henkbotha.com, Accessed on 23rd November 2011
• J.-F. Poudret and S. Besson, Comparative Law of International Arbitration (Sweet & Maxwell, 2007).
  • Leigh L. Thompson, The Mind and Heart of the Negotiator 3rd Ed., Prentice Hall 0ct.2005
  • M. Mustill and S. Boyd, Commercial Arbitration 2^nd ed.(Butterworths, 2001).
  • N. Blackaby, C. Partasides, et. al. Redfern and Hunter on International Arbitration (Oxford University Press, 2009).
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