Despite not being exactly clear, the Orlats at the table understood what Khan meant. That negotiation didn't have wares or deals at stake. It simply was Khan offering those clans a way to survive.
To make things worse, the Orlats didn't doubt for a second that Khan would actually kill them all. His dreadful fame preceded him, and his stance couldn't be more self-explanatory. He was ready and willing to slaughter them all if the meeting didn't satisfy him.
However, the Orlats also saw something else in that seemingly hopeless situation. If the stories about the Prince were to be believed, he wouldn't have wasted time or words in negotiations unless he needed that species' help.
Therefore, the situation wasn't hopeless at all. Khan's threats could scare almost everyone, but the Orlats didn't belong in that category. They wielded something Khan saw as worthy of an official pardon, which they could use to turn the negotiations in their favor.
