By Stephano Salani*

A notable highlight of Arbitration Week was the final panel discussion: Arbitration and Dispute Resolution in the Space Sector. Panellists from Lipman Karas delved into the exciting topic of Australia’s emerging space industry, the unique nature of space sector disputes, and arbitration’s growing role in dispute resolution in this sector. The panel covered an array of issues such as industry developments, the frequency and types of disputes that arise, the range of issues space-related contracts should contemplate, and the role of investment treaty arbitration in resolving disputes. This paper takes a deeper dive into some of the issues that are distinctive to space sector arbitration.

In discussing the issues that concern the space sector, it is helpful to consider the international legal framework within which the space sector functions. The framework is based on the 1967 Outer Space Treaty and includes corresponding agreements such as the 1972 Liability Convention. The Outer Space Treaty is mainly concerned with exploratory activities and promoting the civil and peaceful use of space.[1] As such, the treaty focuses on regulating certain State activities in space and preventing unrestricted competition that could lead to conflict. The Liability Convention elaborates on Article 7 of the Outer Space Treaty, providing that a launching State shall be ‘absolutely liable’ to pay compensation for damage caused by its space objects on the surface of the Earth and for damage due to its faults in space.[2] The Liability Convention also provides for procedures for the settlement of claims for damages.

With both public and private parties now taking part in the space sector, disputes have become more complex. Disputes can include the interplay between public actors, such as space agencies and defence sectors, and private commercial actors. Moreover, to further the complexity, many issues in dispute hinge on geopolitical relations between countries. As such, international treaties have a more direct impact on private matters in space than in many other regimes. Due to the commercialisation of space, many of these relevant treaties are bilateral and multilateral investment treaties.

Currently, investment treaty arbitration is being acknowledged as a mechanism by which commercial space sector issues are likely to be resolved. For an Investor-State Dispute Resolution (ISDR) tribunal to have jurisdiction, there must be both a covered investment under the applicable treaty and a foreign investor that has invested in the territory of the host State. Most bilateral and multilateral investment treaties define investments so broadly that satellites may fall under the definition.[3]

Many factors in space-ventures tie a host State to a satellite, for example any object launched into outer space must be registered on the national registry of a State and satellite operators must obtain licenses from, or sign concession agreements with, the State whose frequency band or orbital position they are using. As a result, operators with satellites on-orbit may be considered to have invested in the territory of the State whose orbital slot or frequency bands they are using or on whose national registry the satellite in question is registered.[4]

The AAW21 panel discussion hosted by Lipman Karras, highlighted the reality that developments in the space sector are not so much related to massive objects as they are to objects that are rather small. Projects like SpaceX’s “Starlink” and “OneWeb”, and other satellite-based telecommunications projects do not use large space-borne objects, but rather a network of multiple small satellites that need to circumnavigate the lower-Earth orbit in a choreographed manner. Planned choreography of these small satellites in the lower-Earth orbit is necessary to ensure that the satellites maintain enough speed to remain in orbit while avoiding hazards such as collisions with other satellites, spacecraft and natural space-borne objects such as meteoroids.

Some of the common types of disputes that have arisen within the space sector include those that occur within the supply chain of the space industry. For example, many disputes relate to the supply of components, preparation for launch and maintenance of key components in space. These issues typically arise from contractual obligations and are often based on an assumption of risk and/or liability of failure. While some issues that arise are issues that regularly plague contractual parties across various industries, such as the supply of materials for the construction of a satellite or a launch vehicle, other issues are specific to space. For example, satellites in orbit are subject to geomagnetic phenomena resulting from solar flares emitted from the sun, anomalies in the Earth’s magnetic field like the South Atlantic Anomaly, and cosmic dust that turns into plasma as it collides with the surface of a satellite.[5] These issues present opportunities for failure and result in an increased risk associated with projects in the space sector. Accordingly, allocation of this risk needs to be determined by the terms of a contract, otherwise the resolution of disputes arising therefrom may prove costly.

Several international conventions have provisions that aid in the resolution of disputes by allocating the liability and responsibility of damages arising from interspace collisions as well as collisions on Earth. Arbitration has been the prevalent dispute resolution process and most arbitration proceedings have been conducted under institutional rules. Notably, the Permanent Court of Arbitration (PCA) recently published optional rules for space disputes. The optional PCA rules include special provisions that account for unique confidentiality and technical complexity concerns that may arise in such disputes.

As provided in the introduction of the PCA’s Optional Rules for Arbitration of Disputes Relating to Outer Space Activities, the rules are based on the 2010 UNCITRAL Arbitration Rules with modifications made to:

“(i) reflect the particular characteristics of disputes having an outer space component involving the use of outer space by States, international organizations and private entities [and]

(ii) reflect the public international law element that pertains to disputes that may involve States and the use of outer space, and international practice appropriate to such disputes…”[6]

The space sector is increasingly relevant in Australians’ day to day lives as well as its commercial interests. Satellites provide crucial communications and data transfer services, and data transfer is gaining an exponentially increasing demand as data-hungry technologies such as the internet of things (IoT) technologies, cellular data, autonomous vehicles, etc. evolve and become more prevalent.

Now that Australia has a space agency, it has opened its doors to further collaborations and commercial endeavors with other countries’ agencies. With this increased activity in the space sector, there will inevitably be an increase in disputes and corresponding development of arbitration and potentially other dispute resolution processes in the space sector.

[1] Resolution Adopted by the General Assembly 2222 (XXI). Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, United Nations Office for Outer Space Affairs <>.

[2] Convention on International Liability for Damage Caused by Space Objects, United Nations Office for Outer Space Affairs <>.

[3] Laura Yvonne Zielinski, “Space Arbitration: Could Investor-State Dispute Settlement Help Mitigate the Creation of Space Debris?” EJIL: Talk! March 19, 2021 <>.

[4] Ibid.

[5] “Hazards of Space: How Satellite Missions Can Go Wrong” Capitol Technology University, September 25, 2018 <>.

[6] Optional Rules for Arbitration of Disputes Relating to Outer Space Activities, Permanent Court of Arbitration <>.


* Stephano Salani

Stephano is a U.S. Patent Attorney with experience in intellectual property (IP) consulting and the procurement of U.S. patents and trademarks. Currently completing a Master of Laws with a focus on collective licensing, litigation/arbitration, and enforcement of international IP portfolios. Stephano is currently completing an internship with the Australian Disputes Centre (ADC) and the Australian Centre of International Commercial Arbitration (ACICA)