The Book of Real-World Negotiations

11Looking under the Hull: How Uncovering Information Led to a New and Better Agreement

Anonymous contribution

There is often a desire on the part of negotiation parties to renegotiate, particularly when they have locked themselves into a long-term contract and a dramatic shock to the landscape occurs. This renegotiation is often not easy, especially when one side is benefiting from the current arrangement. In this case, not only did such a dramatic remaking of the landscape transpire, but new information came to light about the hidden benefits of the current pact.

How was the company on the poor end of the deal able to turn the tide and renegotiate a different deal? Part of the impetus came from a deeper understanding of the previous agreement and hidden benefits to one party. The other part came from a suspect action by the party benefiting from the arrangement and how that flew in the face of what was acceptable from a cultural point of view.

Background and the Negotiation Challenge

This negotiation took place between two companies. The first negotiating party was a major industrial company from the Middle East North Africa (MENA) region called Iron Works (IW). IW was represented by its CEO, Tyler Makin. The second negotiation party was a shipping company called Seabourn Trading (ST), which was based in northern Europe. ST was represented by its CEO, Jan Erlich. This negotiation occurred in the shadow of arbitration – an arbitration Mr. Makin openly concedes his company ...