Dispute resolution in a vacuum? Arbitration's role in resolving space disputes
The rapid disruption of the space industry and the increasing commercialisation of Earth’s orbit is likely to lead to more disputes, and uncertainty as to how parties should resolve those disputes. Arbitration can play an important role.
Record-breaking 2021 highlights some of the risks facing the space industry
2021 was a record-breaking year in the space industry. It witnessed the most active satellites in orbit (over 4,000); the most successful orbital missions (134); the most space tourist flights (6); the most people in weightless space at the same time (19); the most SpaceX rocket launches (31); and the launch of the world’s most powerful space telescope (James Webb Space Telescope). There were 7,389 individual satellites - active and inactive - in Space at the end of April 2021, which is an increase of 27.97% compared to 2020.
Yet 2021 also saw a number of concerning developments. The dangers of an ever-expanding satellite population and excessive levels of space debris were highlighted when the Chinese Space Station (with three astronauts on board) had to conduct emergency avoidance manoeuvres to avoid a SpaceX satellite. The International Space Station was also forced into emergency avoidance measures to avoid the space debris generated when Russia tested its anti-satellite missile system, destroying a defunct satellite.
Congestion of Earth’s orbit poses a serious risk for future space activities, not only in the form of direct collisions but also the increasing costs of debris avoidance and removal, as well as the consequential disruption to satellite-provided services. Developing workable rules and procedures to determine liability for these costs is a fundamental challenge facing the industry.
The overall landscape for space-related disputes
The defining feature of activities in space today is accessibility. No longer is space the exclusive domain of wealthy state actors. Orbit is increasingly democratic, with almost all countries having an opportunity to be ‘space-faring’. Most importantly, space is increasingly commercialised, with private companies and commercial interests driving many of the developments at a pace not previously seen. SpaceX, for example, owns one third of all active satellites currently in orbit around Earth. This represents a fundamental change in the conduct of space activities and the interests driving them.
Much like the onset of the digital age, the space industry is developing at a faster pace than the supporting legal framework. The international legal regime governing liability for incidents in outer space is directed at States and is out-of-date, with no specific regulation on the rights and obligations of private enterprises. In the face of this legal black hole, it remains to be seen whether, and if so how, States will coordinate to maintain minimum standards across national licensing regimes, particularly as governments race to attract space‑industry investment.
The role of arbitration in space-related disputes
While there are a number of unsettled questions as to how space-related disputes will be resolved, there are three indications that arbitration will play a key role in space-related dispute resolution.
First, space-related disputes are likely to increase significantly simply by virtue of more contracts being entered into as the global space economy grows, and as new space-related industries appear. Given that arbitration provides a confidential forum in which decision makers with relevant expertise can be appointed, many of these contracts provide for disputes to be resolved by international arbitration. A number of arbitral institutions are considering the need to develop specific rules to cater for the anticipated increase in space-related disputes, similar to the Permanent Court of Arbitration’s Rules for Arbitration of Disputes Relating to Outer Space Activities (which celebrated their ten-year anniversary in 2021). Plans among arbitral institutions to attract space disputes will no doubt be accelerated by the UAE’s creation of a dedicated ‘space court’, announced in February 2021.
Secondly, at an investor-State level, the increase in foreign investment in the space industry alongside the development of new regulatory regimes will likely lead to further investment-arbitration disputes related to space activities. There have been signs of this trend already. Earlier in 2021, it was reported that Mexico prevailed in its investment-treaty dispute with Eutelsat, arising out of a dispute over capacity requirements imposed on satellite companies. This may well be a sign of disputes to come.
Thirdly, at a State-to-State level, the international framework governing liability in outer space is set out under the 1967 Outer Space Treaty and the 1972 Liability Convention. This regime permits States to file claims against each other for damage incurred either by themselves or their nationals. The predicted increase in orbital collisions will test whether it is a workable forum to resolve space-related disputes. As noted above, however, the treaties were drafted at a dramatically different stage in space exploration and it is likely that an update is required to accommodate the commercial reality of current activities. The international community has acknowledged as much. In December 2021, the United Nations General Assembly First Committee created a working group to develop norms, rules and principles of responsible behaviour in space, with a view to the negotiation of legally binding instruments. Arbitration will certainly be one of the key options that are being considered.
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