Difference Between Negotiation and Arbitration

Various methods of resolving disputes have been used for centuries to lessen the likelihood of loss for all parties. Using these techniques to settle disputes, war between tribes and kingdoms was frequently avoided.

To reduce losses for all parties involved, these alternative dispute resolution techniques have been used throughout history in a variety of settings and contexts. Although they are both similar dispute resolution procedures, negotiation, and arbitration have some key distinctions that the following article will highlight.

What is Negotiation?

Any direct or indirect contact between parties with conflicting interests to consider possible collaborative actions to control and ultimately settle their issue is referred to as negotiation. A dispute between two or more people can be resolved through negotiation, or it can be used to build the foundation for a future partnership.

Negotiation is often regarded as the foremost method of resolving disputes, which is unsurprising given its prevalence in nearly every aspect of daily life, whether at the national, international, institutional, or individual level.

Every negotiation is distinct from the others; they vary in the topics discussed, the number of parties involved, and the methods employed.

To put it another way, "negotiation" refers to a direct or indirect communication process whereby parties with competing interests discuss and decide on a joint action plan intended to settle their disagreement. By laying the foundation, negotiation can be utilized to address any current issue or to improve relations between two or more parties in the future.

People can resolve their disagreements and conflicts through the process of negotiation. It is a technique for reaching a friendly consensus without getting into a fight. A few scenarios where discussions might be useful are business negotiations, contract-based negotiations, international negotiations, and deadlocks in martial law.

Different Types of Negotiation

1. Team Negotiation

Groups of two organizations looking to merge employ team negotiations as a negotiation technique. The two factions engage in this kind of bargaining. When assembling a negotiating team, a company looks for employees who possess both sophisticated thinking skills and strong bargaining abilities.

2. Multiparty Negotiation

This type of negotiation involves three or more sides, each of whom uses a variety of negotiating techniques to present their positions. A multiparty debate happens when a few roommates determine where to have a get-together and talk about the advantages and disadvantages.

3. Positional Negotiation

This type of negotiation involves stating your position from the outset. You must stay like way during the disagreement. One of the most important types of negotiation is positional negotiation, which involves both parties taking strong positions and holding them tightly. One side can ignore the viewpoints of the other and need help understanding what they are attempting to say. Positional negotiations are not particularly successful.

4. Distributive Negotiation

This type of negotiation occurs when two parties discuss a specific good or subject, like a price. For instance, haggling over the cost of a broken gadget with a vendor or visiting a store. One would prevail, forcing the other to back down and ultimately lose. In the end, your performance will depend on your ability to bargain for a just distribution of resources.

5. Integrative Negotiation

Are you aware of what happens when union representatives for employees meet with management to discuss their demands? This type of negotiation involves a lot of disputes, explanation, arguing, cajoling, and so forth. It covers a variety of subjects. They reach a consensus that persuades both parties. It's a type of negotiation where multiple issues need to be settled. These negotiations are advantageous to both parties. An integrative negotiation method ensures a fair outcome for both parties.

Phases of the Negotiation Procedure

Planning and Preparation: As the negotiating team, you must determine and clarify your goals for the negotiation during this stage. At this point, you should clearly identify and comprehend the terms and circumstances of the deal as well as the cause of the disagreement. What would you like removed?

Definition of Land Rights: Following the completion of planning and concept creation, it is necessary to collaborate with others in order to define land rights and negotiating techniques. At this stage, the other person and you will both agree on the following questions:

• Who is going to call the meeting?
• Shall we invite someone else or do it in person?
• Where is the address going to be held?

Justice and Disclosure: After the initial task is completed, justice and disclosure can start. You and the other party will both elucidate, bolster, and rationalize your initial stance or proposal. This is your chance to share your viewpoint with others and discover more about their perspective and how they feel about it.

Problem-solving and negotiation: This is the foundation of the negotiation procedure and the point at which giving and receiving started. Your third party will accomplish the objectives determined during planning and preparation by utilizing a range of communication techniques.

Closing and Implementation: Following the conclusion of negotiations, protocols for carrying out and overseeing the agreement must be established. They codify everything and put it in a structure that is acceptable to both of them.

What is Arbitration?

An alternative dispute resolution (ADR) method that settles conflicts outside of the legal system is arbitration. One or more people (referred to as the arbitrators) will decide the dispute and issue an "arbitration award."

Unless all parties agree that the arbitration procedure and outcome are non-binding, an arbitration decision or award is enforceable in court and legally binding on both parties. The Indian Arbitration Act was passed by the Legislative Council of India in 1899. The first comprehensive arbitration-related law in India was this act.

However, it was only applicable in presidential towns such as Madras, Bombay, and Calcutta. By defining "submission" as "a written contract to submit future and present disputes to arbitration, regardless of whether an arbitrator is designated therein," this act broadened the scope of arbitration.

By agreement of the parties, a disagreement is presented to a panel of arbitrators who render a legally binding decision on the matter. This process is known as arbitration. Instead of going to court, the parties choose arbitration as a private conflict settlement process.

Arbitration has become a standard procedure for settling legal disputes during the last several decades. The main benefit is that the arbitration's participants can pretty much decide how the processes will be structured and conducted. A private process for resolving disputes is arbitration.

According to the Arbitration operation, an arbitration tribunal must operate impartially and equitably toward the parties, allowing each side a fair chance to present their case and respond to the others. The arbitral tribunal may use procedures that are appropriate for the specific facts of the case, preventing needless expense or delay and offering a just way to settle the disagreement.

Difference Between Negotiation and Arbitration

Conclusion

Two acceptable dispute resolution (ADR) methods that are alternatives to judicial litigation are arbitration and negotiation. Both guarantee secrecy and are quick, inexpensive, and private.

In arbitration, parties communicate through their agents in front of an arbitrator, whereas in negotiation, two parties converse directly and are at odds with one another.

In arbitration, there is no lost ground; in negotiation, there is some give and take. Though they might be less expensive, negotiations frequently result in difficult negotiations between opposing sides.

Typically, the judge and facilitator are both outside parties. While the facilitator allowed the parties to reach their own accord, the arbitrator made the final decision about the disagreement.

After hearing arguments from both parties, the arbitrator in an arbitration determines the dispute's resolution. The decision is known as the award. An award is final and enforceable by law. A memorandum of agreement is the product of negotiations. However, this document needs the legal force of an award.