Space law: dispute resolution

Space law: dispute resolution

UK space law: Introduction to our new space law series

This article in our space law series focuses on the resolution of disputes that may arise from space-related activities, setting out the high-level international legal framework and discussing the key principles for "space" and "terrestrial" dispute resolution and appropriate forums.

Firstly, the references to space-related activities in this article include (but are not limited to) the supply, installation, assembly, testing, commissioning, and operation of satellites, launch vehicles, human space flight vehicles, shuttles, as well as the launching, flight, orbit, and recovery. Following the recent growth in the space sector (as outlined in our introduction to this series), the sector has changed from solely state based space activities to a mixture of both state and private enterprises.

Alongside the growth of all these businesses up and down the supply chain, there has been the predictable rise of disputes due to the risks arising from the sector’s notorious complexity. Such disputes can arise due to the innate technical specifications from the science, engineering, or even the industry specific regulations, high value equipment, or commercial agreements between relevant stakeholders (comparable to other industries, like the construction industry) involved in space-related activities. Accordingly, it is important to understand the legislative background and the dispute resolution mechanisms available if issues do arise.

Current legislation

As explored in our previous articles, the regulation of this market has only just taken-off, and the existing legal framework is not just decidedly thin but also archaic, having been drafted and/or brought into force when the initial exploration of space was only taking its initial steps.[1] Accordingly, the treaties were drafted with a focus on state entities being the sole stakeholders for space-related activities, as opposed to the private industries that are now entering the altitudes of space.

Currently, there are only five international treaties, and a handful of non-binding UN General Assembly resolutions that govern the jurisdiction of space, which are:

  1. The Outer Space Treaty (1967);[2]
  2. The Rescue Agreement (1968);[3]
  3. The Liability Convention (1972);[4]
  4. The Registration Convention (1976);[5] and
  5. The Moon Agreement (1984).[6]

The main focus of these treaties was to pre-emptively deal with issues that are starting to arise now, such as: ownership and exploitation of territory and/or resources, weaponisation of space assets, rights of exploration, damage liability caused by space objects (i.e., space debris), safety and rescue protocols, notification and registration of space activities, and the settlement of disputes. While these treaties focus on the requirements for states, they are notably absent on how these principles apply to the private sector. However, two treaties, the Outer Space Treaty (the OST) and the Liability Convention Treaty (the LCT), do address dispute resolution for space-related activities and the principles that are likely to govern how future legislation (nationally and internationally) may be drafted to complement the existing suite of treaties, as explored below.

The Outer Space Treaty (1967)

The OST has a constitutional-like status amongst the legal frameworks for the state parties who are signatories to the treaty. As mentioned, the focus of these treaties was to set out principles for all states to adhere to, and the OST’s twenty-seven articles do just this with Article 1 explicitly stating space exploration is to be for the benefit of all countries and all humankind with the remaining articles covering other issues mentioned above in the third paragraph of this article.

As for disputes, the OST Article 9 provides that state parties shall bear international responsibility for national activities (private sector) where “an activity or experiment planned by its or its nationals in outer space, including the Moon and other celestial bodies, would cause potentially harmful interference with activities of other State Parties”. Where such a potentially harmful interference may arise, it is for the state (on behalf of its ‘nationals’) to “undertake appropriate international consultation” before proceeding, such consultation can be requested by any such state party.

Accordingly, this dispute resolution provision focuses on a collaborative approach between state parties as opposed to a formal forum to resolve such issues. OST Article 3 sets out that space activities are to be “in accordance with international law, including the Charter of the United Nations”, yet the UN Charter[7] only goes as far as to say that “parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.”[8]

Where these collaborative approaches do not succeed, then UN Charter Article 36(3) allows for the dispute to be referred to the International Court of Justice. However, neither of these options are mandatory and only some of the spacefaring nations have accepted compulsory jurisdiction of the International Court of Justice.[9] Therefore, the OST lacks any real means of enforcing a remedy against those parties (state or private) which cause harmful interference to “the activities of other State Parties in the peaceful exploration and use of outer space”.[10]

The Liability Convention Treaty (1972)

The LCT addresses disputes by setting out the positions regarding liability for states launching space objects and the procedures for the settlement of claims for damages. Article 1 defines ‘damage’ as loss of life, personal injury and damage to property. Notably Article 1 does not expressly include other losses such as loss of profits. Article 2 provides that a “launching State shall be absolutely liable to pay compensation for damage caused by its space objects on the surface of the earth or to aircraft”. Article 4 outlines procedures where damage is caused “elsewhere than on the surface of the earth”. This procedure applies where two or more states launch a space object and are held to be jointly and severally liable for any damage caused, see Article 5. However, like the OST, the claim procedure under LCT is again state led, with claims having to be presented “through diplomatic channels” under Article 9. Ultimately, the process is subject to the parties agreeing to the final decision being binding; otherwise, the parties shall consider in good faith the Claim Commissions recommendatory award, as per Article 19.

To date, only Canada's claim against the former Soviet Union for compensation for damages caused by the re-entry and crash in 1978 of the Kosmos 954 satellite has been filed under the LCT.[11] However, the dispute was eventually resolved through diplomatic means and not concluded per the LCT. Again, reliance on international treaties raises questions for private enterprises about the effectiveness of this solution, as it depends on their state pursuing the claim on their behalf.  This process is not optimal, as it may take considerable time to resolve diplomatically, and there may not always be a common interest in doing so. For example, the Otero family claim against NASA for space debris hitting their Florida home in March 2024 is facing difficulties due to the drafting of the LCT as Article 7 excludes damage caused by the launching state to its own nationals.[12]

Other notable agreements

Supplementing the international treaties, there are further agreements between states which capture specific areas of space activities and establish specific forums of dispute resolution, such as arbitration. These are:

The International Telecommunications Satellite Organisation (previously known as INTELSAT)[13] Agreement sets out the requirement for parties to submit all legal disputes for arbitration under Article 18(a).[14]

The Convention establishing the European Telecommunications Satellite Organization "EUTELSAT" (1982) sets out the requirement for parties to submit all legal disputes for arbitration under Article 20(a).[15]

The Convention on the International Maritime Satellite Organization “INMARSAT” (1979) sets out the requirement for parties to submit all legal disputes to either the International Court of Justice or some other procedure for settlement, which may (subject to consent) be arbitration under Article 31(1).[16]

Outer-space dispute resolution

Whilst the major legal treaties mentioned above apportion liability for space collisions and other space-related activities, specifically focusing on states as parties to disputes, what can private enterprises rely upon? Here, legal institutions have been left to fill the vacuum of the "legal" space. For the same reasons that international arbitration is a popular means of dispute resolution for cross-border disputes on Earth[17], arbitration is also a good option for extra-terrestrial disputes.

Indeed, the world’s oldest international arbitral organisation, the Permanent Court of Arbitration (the PCA) deals specifically with this particular area of expertise. Furthermore, the PCA is available to not only states and international organisations, but private parties too. The PCA provides a number of services in addition to arbitration, including mediation, conciliation, and other forms of alternative dispute resolution.[18] As for space, the PCA has approached this directly by amending the 2010 UNCITRAL Arbitration Rules and publishing its Optional Rules for Arbitration of Disputes Relating to Outer Space Activities.[19] These rules  cover all aspects of the arbitral process, such as setting out the procedure for appointment of arbitrators, to the conduct of the arbitral proceedings, and establishing rules in relation to the form, effect and interpretation of the award.

The benefits of the PCA and other arbitral institutions as a means of dispute resolution are plenty. For example, arbitration allows for the handling of strictly confidential material, decisions made by experts with an understanding of the highly technical and sophisticated aspects of the industry and space law itself, and flexibility in procedural timetables (compared to court proceedings). Arbitral awards are final and binding, enabling parties to resolve commercial disputes with a degree of certainty. However, if not honoured voluntarily, then parties can rely upon the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention) to enforce the decisions.

As with many challenges regarding dispute resolution, jurisdiction is a fundamental hurdle. Arbitration as a form of dispute resolution relies upon the parties having an agreement to settle disputes via arbitration. Furthermore, agreement between the parties as to the seat of arbitration and the applicable rules (or at least a mechanism to resolve these issues in the absence of agreement) is necessary to avoid disputes on these issues before they arise.

Terrestrial dispute resolution

Whilst the reliance upon the arbitral institutions may aid those dealing with the likes of space-related activities, such as space debris, collisions, or ownership of resources etc., what should those stakeholders within the Earth-bound supply chain (i.e., those who do not need to consider liability in outer space) rely upon? Here the commercial contracts between the stakeholders should include an agreed dispute resolution mechanism. Accordingly, those involved in space-related activities and the supporting services, should consider what mechanism best suits their particular project and the risks or grounds for dispute. Each form of dispute resolution has its advantages and disadvantages due to the specific scope of activities and services a party may undertake. We have mentioned the benefits of arbitration, but equally, litigation may be an appropriate means to resolve a dispute, particularly in jurisdictions that are experienced in sophisticated and complex litigation such as the UK.[20] The UK also strongly encourages alternative forms of dispute resolution, such as mediation. Indeed, provisions are built into the UK’s civil procedure rules to encourage early settlement.   

Conclusion

As explored above, the legal framework for disputes relating to space-related activities remains tied to the international treaties set up when states were the only parties venturing into the realms above. For private entities now taking on this venture, the importance of robust dispute resolution mechanisms within their commercial contracts cannot be overstated. The unique nature of space activities often involves multiple jurisdictions, making it essential to establish a clear legal and contractual framework that deals with difficult legal issues such as jurisdiction and enforcement in cross-border disputes. Implementing dispute resolution mechanisms within commercial practices and documentation (whether arbitration, litigation or mediation provisions) can provide efficient solutions to disputes before they escalate. Through these efforts, the UK can ensure that space exploration remains legally sound, paving the way for a sustainable future in the final frontier.

 

[8] Article 33 of the United Nations Charter

[13] An intergovernmental organisation that incorporates the principle set forth in Resolution 1721 (XVI) of the General Assembly of the United Nations, which established that communication by means of satellite should be available to the nations of the world as soon as practicable on a global and non-discriminatory basis ABOUT US – ITSO

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