Negotiating in Times of Crisis

“Achieving a certain degree of balance amid suddenly disrupted circumstances is the key to any negotiation.”

The word crisis comes from the Greek “krisis,” meaning “to separate” or “to decide.” And indeed, “deciding” is the very essence of any negotiation.

In our language, it is defined as a “sudden change in the development of an event or situation.”

It is precisely during periods of sudden change that decisions require greater speed, sound judgment and flexibility than when change occurs gradually.

Any situation that gives rise to negotiations in times of crisis requires the parties to understand and adapt quickly. Crises, as profound departures from previously known circumstances, invite us to engage in more open and direct dialogue and to develop new, pragmatic and strategic solutions.

In times of crisis, negotiations place a magnifying glass over a crucial third factor: the prevailing circumstances.

The law, in turn, provides mechanisms specifically designed for times of emergency, such as court-supervised reorganization proceedings and APEs (agile and pragmatic out-of-court restructuring agreements). These mechanisms offer a lifeline to distressed debtors facing pressure from multiple creditors, allowing them to suspend the accrual of interest and pursue the continued operation of their business.

The usual rules no longer apply. The parties’ underlying dispute coexists—or competes—with the broader crisis. There is little time for reflection beyond the urgent need to remain afloat, and the desired outcomes must strike a balance between what is possible and what can reasonably be expected.

However, crises must also be understood as “opportunities.” Learning to capitalize on pragmatic decisions at such turning points may be the key to any successful negotiation.