Guest blogger, Carlo Mosca, is a commercial lawyer specializing in international business. He’s been practicing as a mediator, and a trainer in ADR since the mid ‘90s (www.carlomosca.it). He is currently a member of the board of the ISCT.
On September 15th, 2020 IDI, the International Distribution Institute organized a webinar focused on possible solutions for re-starting distribution and retail/franchising relationships which have suffered difficulties during lock- down, and which are still suffering difficulties in order to adapt to the restrictive measures imposed by the COVID pandemic.
IDI is a small but very active organization which gathers scholars and practitioners active in the field of cross-border distribution business (namely commercial agency, distribution, and franchise contracts).
The idea at the basis of the webinar was to show how an early intervention, facilitating dialogue between the parties involved, may effectively not only prevent the insurgency of disputes in court or in arbitration, but also help the parties to find new ways of reassessing and possibly adjusting their reciprocal contractual obligations, while maintaining sound commercial relations. This is traditionally regarded as a domain where a problem-solver facilitator is perceived to be the most appropriate neutral opposing parties may make recourse to. However, in the webinar, the facilitator was myself. I am a member of the ISCT board and one of the (not many, indeed) commercial mediators working under a transformative framework of intervention.
The case dealt with a query between a manufacturer and its overseas franchisees network. Due to governmental restrictions imposed on franchisees under the Covid rule, many shops had to close for months, and lately – when operations were eventually resumed – to bear a fair amount of cost of visiting customers protective measures. In particular, franchisees would find themselves in a situation where they had to renegotiate payment conditions with a principal; find a way to have the minimum quotas reset, and possibly return a large inventory of unsold goods. On the other hand, the principal too was experiencing hard times, on account of thin incomes, and the difficulty to pay its suppliers. A situation like this one could easily lead to a confrontation in court where reasons of force majeure or hardship have to be eventually addressed and settled by an imposed decision.
Why not to try to find an amicably negotiated solution, instead? The point is that this solution is often prevented by the course of things – namely, the inability of the parties involved to avoid escalation of conflict and a block in communication. When this is possible, however, parties may gain a lot and the demo presented at the seminar offered a good example on how things may go.
The facilitation did not diverge from what transformative mediators usually do. Firstly, he tried to characterize the meeting as an opportunity for a constructive conversation. As the conversation was unfolding, he then employed the typical array of interventions utilized by transformative neutrals: deep listening, reflections, summaries, check-ins… the whole of it, offered in a non-directive way. The parties seemed to appreciate in particular the fact that they were in control of the situation, either as for how the conversation had to be conducted, and its possible outcomes as well. This is a feature particularly appreciated in the commercial fields, the parties being accustomed to negotiating, and finding viable solutions on their own.
So, the webinar was an opportunity to see how a transformative approach may well be utilized in a commercial setting. It may, indeed, be a more natural and fit to the parties’ needs than other directive approaches.
written by Carlo Mosca