A brief look at the Space Industry
Until recently, only a few countries had access to outer space. However, since
then, more and more private enterprises have been able to participate in the
"space race," spurred by technological advancements, particularly by reusable
orbital-class rockets and the resulting decrease in launching costs, and we can
now see the development of a sizable commercial space economy.
The Space Foundation's Space Report for 2021 states that after five years of
continuous development, the global space economy reached USD 447 billion in
2020, an increase of 4.4% from 2019. In turn, the satellite sector contributed
74% of these global profits, according to the Satellite Industry Report of 2021,
which was released by the Satellite Industry Association.
Increased activity frequently leads to an increase in disagreements, and the
space economy is unlikely to be an exception. Contrarily, we have already
identified a variety of potential conflict areas, from standard business
disputes to disagreements over investments, detrimental frequency interference,
and even actual crashes.
Commercial conflicts have previously occurred in the space industry as a result
of things like manufacturing flaws, delayed satellite deliveries, satellites
placed in the wrong orbit, and contract cancellations. We may anticipate that
as space activities rise and there are more contracts and business relationships
established, there will be an increase in such issues in the years to come.
International investment protections are reportedly advantageous to space
activities because they typically include long and expensive investments, at
least when it comes to the deployment of gear into space. Space-related
investment disputes may result from this. Devas v. India, Deutsche Telekom v.
India, and Eutelsat v. Mexico are a few examples of prior space-related
Finally, as more and more objects are launched into space, the lower orbits are
gradually becoming congested, which raises the possibility of harmful
interference between satellite systems and, in some cases, even of actual
collisions, necessitating the use of expensive collision avoidance maneuvers.
What has this got to do with international arbitration? A conflict resolution
system is necessary when there are disagreements. Theoretically, national courts
could settle any space-related disputes. Domestic lawsuit, however, might not
always be the best choice. In actuality, since parties from several nations are
sometimes involved, space disputes are frequently multinational.
They are also confidential since they frequently involve dual-use technologies.
Lastly, they are highly technical and call for specialists who are knowledgeable
with the nuances of the space sector. Multinational arbitration is a
particularly well-suited conflict resolution method for the space community,
given the international, highly technical, and frequently secretive character of
The adaptability of arbitration provides a dispute resolution method that can be
tailored to the needs of the space industry. Arbitration permits the parties to
a dispute to select the arbitrator and to modify the procedural rules to the
dispute at hand, allowing for enhanced confidentiality, for example.
Is arbitration available to settle space disputes?
As long as the parties agree to incorporate arbitration provisions into
their contracts, which frequently seems to be the case, or they agree to send
their disagreement to arbitration once it has occurred, commercial space
conflicts can always be settled by arbitration. For instance, the General
Clauses and Conditions for ESA Contracts (ESA/REG/002, amended on 5 July 2019)
of the European Space Agency include a provision for arbitration in Clause 35(2)
that appears to have been embraced by commercial space enterprises.
It's interesting to note that conflicts over detrimental frequency interference
are frequently governed by contracts, as frequencies are coordinated amongst
various satellite systems and the outcomes of this process are outlined in
agreements referred to as coordination agreements.
Consequently, space ventures typically have access to investment arbitration
courts as long as they benefit from the procedural safeguards provided by
bilateral investment treaties, in addition to the substantive protections
granted by those agreements.
Physical collisions and collision avoidance tactics, on the other hand, are less
likely to be addressed by arbitration. As Collisions can occur between parties
who did not previously have a contractual relationship and, as a result, did not
have the option to pre-agree to arbitration. This means that private parties
involved in a space collision would have to resort to domestic litigation or
request diplomatic protection under the dispute resolution provisions of the
1972 Convention on International Liability for Damage Caused by Space Objects
unless they can agree to refer their dispute to arbitration once it has arisen.
Space Arbitration Association
Looking at how rapidly the need for such association for arbitration was rising
in space industry the space arbitration association was formed. Therefore, the
Space Arbitration Association's goal is to foster communication between the
world arbitration and space communities. It will also arrange events on subjects
connected to space arbitration and build a registry of publications and public
documents on space-related arbitration proceedings.
In conclusion, as the space sector expands, so does the possibility of legal
problems. Due to their unique character, space issues call for a dispute
resolution method that may be customized to meet their needs. International
arbitration will likely continue to be the preferred dispute resolution method
for the space sector and, in our opinion, serves this purpose.
What we refer to as "Space Arbitration" are the ensuing international
arbitration processes handling disputes pertaining to the space industry. As a
reader or contributor, we sincerely hope that you will return often to learn
more about space disputes and how they might be settled through international
Written By: Pragati Dwivedi
- Jan Frohloff, '"Arbitration in Space Disputes'", Arbitration
International, Oxford University Press, 2019, Volume 35, Issue 3, pp.
309-329, paras. 2.1 . 1-2. 1.6.
- PCA Case No. 2013-09
- PCA Case No. 2014-10
- ICSID Case No. ARB(AF)/17/2
- Rachael O'Grady, Dispute Resolution in the Commercial Space Age: Are All
Space-Farers Adequately Catered For?, ICC Dispute Resolution Bulletin, Issue
3, 2021, p. 55, quoting "Avanti Wins Arbitration Award Against SpaceX,"
Space News, 20 April 2011;
- 2019's 70th International Astronautical Congress presentation by Elina
Morozova and Yaroslav Vasyanin, Mechanisms for Resolving Disputes Related to
Violations of Coordination Agreements