As part of the London International Disputes Week 2024 International Arbitration Day, Kirkland & Ellis hosted a “Panel Session on Space – Arbitration for Low Earth Orbit Disputes and Beyond.” The panel comprised Artem Doudko (Osborne Clarke), Dr. Jan Frohloff (SRP, Germany), Oliver Grazebrook (Viasat), Rachael O’Grady (Mayer Brown), and Dr. Tanja Masson-Zwaan (Leiden University).
Suitability of International Arbitration to Resolve Current Space Disputes
The panel began by discussing the types of disputes currently facing the space industry and the suitability of international arbitration to resolve them.
Drawing on his experience at satellite communications company Viasat, Oliver Grazebrook noted that many space disputes are actually very “Earth-based” and resemble the types of disputes with which commercial arbitration practitioners are already familiar.
Rachael O’Grady outlined several features of these disputes that make arbitration a particularly attractive dispute resolution mechanism. First, even though there are now hundreds of companies operating globally in the space industry, there remain, for example, no more than a handful of launch providers and satellite manufacturers (if that) in each jurisdiction. This has the effect of rendering virtually all space disputes international and, as such, the enforceability of awards an appealing feature. Second, given this concentration of expertise, the space community itself remains small, which means that preserving confidentiality is paramount. Third, the space industry is driven by very fixed time schedules, making the speed by which awards can be rendered highly useful.
However, it was noted that there are some space disputes that are not capable of resolution by arbitration. Examples include disputes relating to the allocation of satellite frequencies (because everyone cannot be using the same frequency) and orbital slots (because satellites cannot be too close to one another). These rights may only be allocated by the International Telecommunication Union (“ITU”) to ITU Member States which, in turn, can assign such rights to private companies. Therefore, if a private company is allocated an orbital slot by a domestic regulator which is subsequently allocated to another company, that dispute would typically be resolved in a domestic judicial review or similar action.
The (Lack of) Need for Specialist Dispute Resolution Mechanisms for Space
Artem Doudko queried whether space disputes require specialist arbitration infrastructures or whether existing infrastructures may be used. The panel agreed that existing infrastructures largely suffice. However, Ms. O’Grady stressed that it is important to distinguish between different types of space disputes because the answer to this question may vary for each of them:
- Commercial arbitrations: there are numerous Earth-based contracts that concern extra-terrestrial activities, which already contain arbitration clauses, domestic governing law, and access to well-trodden arbitral institutions—e.g., the ICC or the LCIA. These institutions update their rules frequently and include expert procedures, making the procedures easily tailored to resolve commercial space disputes. In fact, the specialist space infrastructures that do exist—including the Courts of Space in Dubai and the PCA Optional Rules for Arbitration of Disputes Relating to Outer Space Activities (“PCA Space Rules”)—have generally not been used.
- Investment treaty arbitrations: if space disputes fall within the parameters of ISDS, existing institutional rules, including UNCITRAL, ICSID, and SCC, are likewise sufficient.
- State-to-State arbitrations: to the extent there is a State-to-State dispute relating to space, the International Court of Justice (“ICJ”) is already well-established and alive to the space age. Additionally, diplomatic channels have historically proven effective at resolving space disputes, as evidenced during the 1970s when a Soviet satellite crashed and scattered debris over Canada, resulting in a dispute that was ultimately negotiated and settled diplomatically.
- Private-State disputes arising in public international law, outside the scope of contracts or investment treaties: these are the types of disputes that are not governed by contract, do not fall within the ISDS framework, and are not between States. Instead, such disputes may arise between a private company (or individual) and a State. Although international space law would benefit from updates in various areas, some substantive rights do already exist for private operators—yet there does not currently exist any way of enforcing these rights against State entities (who remain responsible for all national activity in outer space). This category of dispute is therefore not sufficiently served by existing mechanisms (in a similar manner to the scenario that existed for foreign investors pre-ICSID Convention). Ms. O’Grady suggested the need for the creation of an “ICSOD” Convention to address this (International Centre for the Settlement of Outer Space Disputes).
Regarding commercial space disputes, Mr. Doudko queried why the PCA Space Rules are not being used. In Ms. O’Grady’s experience, this is because clients typically prefer to use tried and tested paths for resolving disputes and may not want to risk trying something new. Mr. Grazebrook also noted that many lawyers in space companies, particularly those with no prior arbitration experience, may simply not be aware that the PCA Space Rules exist. Dr. Frohloff suggested that perhaps the greatest contribution of the PCA Space Rules has been to raise awareness in the international space law community that there is such a thing as arbitration capable of resolving space disputes, and vice versa.
What Does the Future Hold for Space Disputes?
Dr. Tanja Masson-Zwaan noted that the series of treaties adopted by the United Nations General Assembly in the 1960s to 1980s remain the controlling international space rules among States. However, these treaties—while still relevant today—do not regulate everything. For example:
- The Outer Space Treaty provides that only States, and not private actors, are internationally liable for damage caused by objects launched from their territory and for activities conducted in space—regardless of whether those activities are conducted by a non-governmental organization. While these rules were created at a time when the primary actors in space were the United States and the Soviet Union, there are now hundreds of companies operating in the space industry. In fact, Elon Musk’s SpaceX currently owns the most satellites actively orbiting the Earth. However, as Ms. O’Grady and Dr. Tanja Masson-Zwaan noted, if a private actor suffers damage caused by a State (or another private actor) in space, there is currently no way for such actor to bring a claim under international space law unless it can convince its own State to act diplomatically on its behalf.
- There are currently no clear international rules regulating the exploitation of natural resources on the moon and other celestial bodies. This regulatory gap could lead to conflict, particularly if such resources prove to be profitable. While States have started to enact national laws dealing with these issues, this could lead to a patchwork of inconsistent rules.
- Finally, despite the advent of large constellations of hundreds of satellites in lower orbit (in the past three years, the number of satellites in orbit has more than trebled), we do not presently know whether there is a limit to such capacity. Relatedly, there is no single calculation used universally by States to identify a risk of satellite collision, no right of way if two satellites are on a collision course, and no rules regarding which satellite must take evasive action to prevent a collision. Dr. Frohloff noted that international space law would benefit from the development of substantive rules regulating space traffic.
The Role of States and State-Controlled Parties in Space Disputes
Finally, the panel discussed how, despite the increase of private actors in space, the involvement of States and State-controlled parties and the impact of geopolitics remains one of the defining characteristics of space disputes. In Dr. Frohloff’s view, the explanation for this is three-fold. First, historically, only nations were going to space. While this has changed, State and State-controlled actors remain important players in the industry. Second, satellites and rockets are dual-use goods insofar as they can serve a commercial purpose but are also powerful strategic military assets. As a result, disputes concerning such apparatus tend to be heavily influenced by domestic politics and geopolitics. Examples include the ABS v. KTSAT arbitration concerning export controls, and Russian space agency Roscosmos’s refusal to launch satellites for satellite operator OneWeb following Russia’s invasion of Ukraine. Third, States still play an indispensable role in facilitating private access to space. As noted above, because the ITU can only assign rights to use frequencies to States, a private operator must go through a domestic regulator to obtain the right to use frequencies in a given orbit or slot. This, in turn, can lead to disputes, as evidenced by the Devas arbitrations.
Regarding the protection of space assets, Dr. Frohloff noted that future investment treaty disputes might grapple with the conflict between the notion of investment in the territory of the host State and Art. II of the Outer Space Treaty, which stipulates that outer space is not subject to national appropriation by claim of sovereignty. One of the (yet untested) concepts is that the allocation of frequency and slot usage rights by ITU Member States to private companies could amount to an investment in the territory of the host State. Another concept provides that the registration of a space object by a State amounts to an investment because launching States maintain jurisdiction and control over such objects under Art. VIII of the Outer Space Treaty.
In conclusion, existing international arbitration mechanisms remain well suited to deal with many space disputes, including those that adhere to conventional commercial, ISDS, or State-to-State frameworks. Likewise, existing international space law instruments continue to be relevant and lay the foundation for the peaceful exploration of space. However, these systems are ill-suited for a new “spacescape” increasingly dominated by private actors. Given the sheer speed at which private actors are occupying (and monopolizing) space, it remains to be seen whether (and how quickly) international arbitration and international law will adapt.
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