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Arbitrability Of Space Disputes

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[1] 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.

Space Conflicts
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.[2] 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[3], Deutsche Telekom v. India[4], and Eutelsat v. Mexico[5] are a few examples of prior space-related investment lawsuits.

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.

Space Arbitration
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 space activities.

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.[6]

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.[7]

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 arbitration.

  2. 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.
  3. PCA Case No. 2013-09
  4. PCA Case No. 2014-10
  5. ICSID Case No. ARB(AF)/17/2
  6. 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;
  7. 2019's 70th International Astronautical Congress presentation by Elina Morozova and Yaroslav Vasyanin, Mechanisms for Resolving Disputes Related to Violations of Coordination Agreements
Written By: Pragati Dwivedi

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