INTERNATIONAL COMMERCIAL MEDIATION

I was recently invited to a Conference on International Commercial Mediation, organized in Milan by NCTM.
Here's the case study that I discussed.


INTRODUCTION
Today I would like to talk to you about one of the mediation cases I have recently handled. I will speak in general terms for confidentiality reasons. I will use it as an example to point out one phase of the mediation process which I call the description of reality.
There are many ways to describe what takes place in the mediation process. Generally speaking, attention is focused on the part that is considered the most important; the agreement, the solution, the settlement.
But from my point of view, if you don’t put things straight at the beginning of the mediation process you won’t be able to govern the process and therefore you are never going to reach a good solution.
Of the many ways one can talk about what happens during a mediation session, I prefer this:
1.       description of reality;
2.       exploration of possibilities.


THE CASE
-          The Parties
On one side we have a small family-run business that designs and manufactures plastic components for industrial machines. The personnel of the Italian company includes three brothers, two of their wives, and three employees.
On the other side we have a South American Company dealing with agricultural products, it is not strictly a family company, but the CEO who’s also the owner, acts as a real paterfamilias.
-          The Contract
They signed a contract which provided for the design, production in a third country (in Asia), and the installation of the components by specialized Italian technicians and the training of local personnel for the maintenance of said components.
The contract stipulated that payment be made in installments starting at the signing of the contract and ending at the completion of work.
-          The Story
The design phase began, the parts went into production, and everything proceeded as smooth as silk… until the Italian technicians arrived in South America.
The group of specialized technicians arriving in Argentina included the owner of the Italian company, who is an expert, and one of his brothers, who works with him in the company. The work was almost completed, the machines functioned properly, but when it came time to pay the last two installments of the contract, the South American CEO refused to pay.
He said that since the Italians had not sent different workers, but instead the owner and his family had come to do the work, the amount for specialized workers was not payable because the company and his family had already been paid for the work they had done and that only the use of additional people would have justified, in his opinion, the additional charges.
At this point, after returning to Italy not knowing what to do, the Italian company sought the services of a lawyer, who looked at the contract and threw his hands up into the air. I was told that he said: “Come to an agreement with them or you lose.” I don’t know if that’s true…
This is when the mediator entered the scene.
-          The Problem
What had happened?
Everything had gone smoothly. The design needs had been communicated without problems, they had succeded in having the pieces made and shipped across the world, and then, when they finally met at the end, something went wrong.
The Argentine gentleman felt he had been tricked when he saw the owner of the Italian company and his brother arrive as part of the group of specialized workers, and he thought that the Italians wanted to take advantage of  him at his expense.
From the Italian’s point of view, the fact that he went personally with his family members to manage the job all the way to the end was an element of added value offered by his company, something that demonstrated responsibility and reliability.
But that is not the whole story.
-          The Whole Story
The Italian did not speak Spanish.
The Argentine did not speak Italian.
From the moment he set foot in the Argentine company, the Italian communicated in English—which he spoke perfectly—because he wanted to be sure that everything he said was understood exactly.
The Argentine, who did not speak English, always had to have his secretary with him to act as an interpreter.
From the Italian’s point of view, speaking in a very precise English was a sign of professionalism to ensure that there were no misunderstandings.
However, the Argentine saw it as an inexcusable act of discourtesy. He thought that Italian and Spanish were close enough that with a bit of honest effort the two could have communicated. He thought that the Italian wanted to assert his superiority and was upset that his secretary was always present and that the Italian always ended up speaking to her instead of to him.
For the Italian, the behavior of the Argentine was rude and unbearable. He continued to fume and look bored while the Italian sought to explain everything precisely to his secretary.
Each one was caught in his own reality and unable to communicate with the other because each felt he had been personally offended.
Let’s see how.
-          The Mechanism of Offence
The Argentine’s reality, his point of view, was this:
·         The fact that he speaks English to me means he does not respect me.
·         The fact that he doesn’t respect me means he thinks he’s superior to me.
·         The fact that he thinks he’s superior to me means that he thinks I’m stupid.
·         Hence, the fact that he speaks to me in English means that he thinks I’m stupid. And indeed, he tries to take advantage of me and make me pay more than I owe.
And the circle closes.
On the other side, the reality perceived by the Italian was this:
·         The fact that he doesn’t listen while I explain means he doesn’t respect me.
·         The fact that he doesn’t respect me means that he doesn’t think I’m professional.
·         The fact that to him I am not professional means that he sees me as worthless.
·         The fact that he doesn’t listen means that he sees me as worthless, and indeed, he refuses to pay me what he owes me.
 
And the circle closes for him too.
Each of them was caught in a mechanism of cognitive distortion that made him judge and feel judged. They were so immersed in negative judgments—“I am worthless”, “I am stupid”, and so on—that neither could see that there might be another explanation, neither could get outside of his own personal reality.
-          What to do
At this point, how can a mediator make them see that their convictions about the situation are actually just their individual points of view and that there are other possible explanations?
By asking questions. But they have to be the right ones!
Questions are the most powerful hypnotic instrument in our toolkit because they direct our attention automatically.
Right now we do not have time to examine how and when the correct questions are formulated. I refer you in this regard to the fundamental book on the topic, The Structure of Magic by Bandler and Grinder.
Think how different things would have been if the Argentine had immediately asked, while the Italian was doing his job: “Excuse me, but why do you insist on speaking in English, and why do you address my secretary instead of me?”
Or if the Italian had asked: “Excuse me, but you look upset, is something bothering you?”
If they had been able to ask each other these questions, they probably never would have had to seek the services of a mediator. Put this way, it seems so petty, but actually we all often find ourselves in situations where we fail to ask the right questions that would allow us to direct our attention beyond a feeling of insult that ends up leading to conflict. 
They needed the intervention of a mediator who directed their attention to a part of reality that they had not succeeded in seeing or did not want to see.
An example:
·         The fact that the Italian spoke in English meant that he wanted to be as precise as possible.
·         The fact that he wanted to be as precise as possible meant that this job was very important to him,
·         and indeed, he came personally to handle everything.
Once each party had described his reality and each had heard that of the other, it was not difficult to reach an agreement. This was not a case where it was necessary to work to invent alternative solutions: the reality of the situation was more than sufficient.
-          Real Life
In practical terms, this mediation session took place in a small town near Florence, in the Chianti region, and was conducted partly in Italian and partly in Spanish.
At the beginning I was very worried especially because I was not sure which language I should have used.
In this regard, the conflict helped me because at the beginning the two parties did not want to speak or listen to each other. So I spoke Italian to the Italian and Spanish to the Argentine. When I had to say something to both, at the beginning I said it first in one language and then in the other. Actually, this phase did not last very long because at a certain point the two parties realized they could understand one another very well, each one speaking his own language. This was facilitated by the fact that we were not dealing with technical or complicated issues, but with very simple things: offense, apologies, behavior. And there were no complaints about the product. As far as money is concerned… numbers are universal. So in the end, each one spoke his own language and the agreement was reached with a handshake. Then the lawyers, who were not present during the mediation, drew up the necessary papers.
In conclusion: mediation is a unique arena where, at times, you can get a broader view of reality than anywhere else.
 
 

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