party parties agree to negotiate, then they do

party to honor its
obligation, or it will be forced to litigate or to pursue alternative dispute
resolution in foreign and unfriendly jurisdiction.

The Principles of
negotiation1

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The fact that
negotiations are flexible and free from extensive formality does not mean that
there is no system to negotiation. There are widely accepted principles of
negotiation which are enumerated as follows:

1.     
Separation of interest from position

2.     
Application of objective criteria

3.     
Readiness to make concessions

4.     
The identification of common grounds

North
Sea Continental Shelf Cases2
are
often cite as an authority for stating that an obligation to negotiate implies
an obligation to reach an agreement. But this is not so. All the court said was
that once the parties agree to negotiate, then they do so in fairness and with
a view to arrive at an agreement. The obligation is to pursue negotiation with
the intention of possibly, not mandatorily, reaching an agreement.3

Negotiation in
commercial or business transactions:

Business people and
corporate counsel often seem not to pay much attention towards their choice of dispute
resolution when negotiating a contract. This means that any disputes which
arise will be reso.ve by the litigation, which is often the worst possible
alternative. Hence, the business people should try to consider carefully the
kinds of dispute which are likely to arise during the course of business and to
choose a method of dispute resolution.

Business negotiations
are deliberations that ensue from different motivating factors and whose agenda
have a common ground. Such a phenomenon brings the conflicting sides together
in the aim of seeking a lasting solution to the conflict. The issue of business
negotiation is a common phenomenon these days especially on the matters of
patents and royalties.

 Mostly the private international disputes are
regarding the matters of trade and commerce. These matters are concerned with
the business transactions between the trading and investment entities from
different countries, private individuals, MNCs and governments. Areas of
disputes in international transactions can be the international sale of goods,
carriage of goods, baking and finance, licensing agreements, construction work
and foreign investments.4
These commercial disputes usually occurs due to the breakdown of commercial
relationship between the parties for

1
Ademola Abass, International Law text, cases, and Materials (Oxford University
Press, 2012), p.437-438

2
National Sea Continental shelf (Federal republic of Germany v. Denmark; Federal
republic of Germany v. Netherlands), ICJ Rep 1969, 3

3
Ademola Abass, International Law text, cases, and Materials (Oxford University
Press, 2012), p.440-441

4 I.
Turley, International Commercial Law Study Guide (Deakin
University, 1997), at p. 180.