Jessie Xie
by Jessie Xie
ADC Intern,
Student – University of Sydney, Bachelor of Commerce (Finance)/LLB
Introduction
Development in outer space has truly taken off, with nations across the globe both metaphorically and physically reaching for the stars. As demonstrated by the recent Artemis II mission around the Moon, the global space industry presents a compelling investment opportunity, with market valuations projected to exceed 1 trillion USD by 2030.[1] Due to the rise of outer space developments, commercial parties and governments race to capitalise on this new frontier, despite a legal and regulatory environment that remains largely underdeveloped for modern commercial realities.[2] As a result of the rapidly growing number of satellites in outer space and the accumulation of space debris, there is an increasing risk of collisions, interference with satellite services, and orbiting objects falling back to Earth. These risks, alongside challenges posed by liability attribution and environmental impacts, highlight the need for long-term legal developments to address these issues.[3]
Existing frameworks for resolving outer space disputes
The foundation of international space law is contained in several UN treaties. Specifically, the 1967 Outer Space Treaty (‘OST’),[4] underpinned the future of space law and fundamentally established outer space as a common direction of development for all humankind.[5] It mandates that all space activities must be conducted in accordance with international law, placing responsibility on States for all their national space activities and the damage they may cause.[6] Despite this, the OST provides little guidance on how resolving disputes or how to establish a cause of action between a State and a private commercial entity.
For instance, Article IX of the OST requires States to engage in consultations where their space activities may cause harmful interference with others.[7] However, the existing framework places no binding obligations on States or private parties to respond to such consultation requests. Ultimately, whilst the OST provides an important basis for the development of space law, it fails to account for the rise of private entities driving the modern age of space exploration and further lacks any formal centralised authority to enforce its rules.
Following the establishment of the OST, in 1972 more than 100 states ratified the Convention on International Liability for Damage Caused by Space Objects (‘Liability Convention’).[8] The Liability Convention outlines liability for damage caused in space, specifically allocating absolute liability to a State for damage caused by its space object on the surface of the Earth or upon other aircrafts, whilst allocating fault-based liability where that damage is caused in outer space[9].
The Liability Convention allowed for the establishment of a Claims Commission, composed of three members tasked to resolve disputes between parties and determine compensation amounts for unsuccessful ADR outcomes.[10] However, the Commission’s decisions are not binding unless the parties have agreed otherwise, and are merely a “final and recommendatory award” which the parties must consider in good faith.[11] In addition, the definition of ‘damage’ is very limited, and there is no formal definition of ‘fault’ in the Liability Convention, which causes discrepancies in its interpretation when resolving international disputes.
These current frameworks work alongside arbitration rules and ADR practices, which have been regarded as highly effective in settling legal issues concerned with outer space. For example, due to the limited application of UN treaties, the Permanent Court of Arbitration (PCA) in 2011 introduced arbitration rules specifically for resolving space disputes.[12] These rules provide a voluntary and binding dispute resolution mechanism to those in the space sector.[13] Following the establishment of the PCA rules, initiatives such as the Dubai International Finance Centre (DIFC) launched their Courts of Space in 2021 and began developing specialised training programs for space-related commercial disputes.[14] Yet, with humanity’s race for space, there are concerns as to whether such ADR frameworks are sufficient to resolve the complex, multi-jurisdictional nature of outer space disputes.
Whether existing ADR frameworks are sufficient for resolving space-related disputes
ADR processes, particularly arbitration, have become an attractive option for resolving outer space disputes. As ADR processes are consent-based and inherently flexible, they easily adapt to novel scenarios, especially cross-border disputes between States and private entities.[15] ADR is therefore an attractive option in the context of space disputes, where unfamiliar situations are unfolding with increasing regularity. Space activities and commercial ventures often operate in pre-determined cycles and regulated launch periods, meaning efficient dispute resolution methods must be prioritised.[16]
In contrast to ADR, typical litigation before national State courts can be complex, slow and resource-intensive.[17] Furthermore, diplomatic channels and traditional dispute resolution methods established from international law often place certain parties at a disadvantage, due to the time required to set up formal and legally binding communications between States. Waiting for months or potentially years for international tribunals to adjudicate a conflict may contribute to escalation of life-threatening situations or severe financial consequences.[18] Thus, the flexibility and speed of ADR allows parties to bypass the cumbersome nature of State dispute resolution processes, allowing required procedures to be conducted quickly and tailored to the situation at hand.
Beyond its procedural flexibility and cost-efficiency, ADR is important for its global recognition and enforcement. International arbitration and negotiations offer the significant benefit of broad enforcement, primarily due to the widely ratified 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (‘New York Convention’)[19]. The New York Convention provides extensive enforceability, which is advantageous for outer space disputes, since many commercial operations revolve around multiple jurisdictions and require legal remedies that transcend national boundaries[20]. Consequently, instead of depending on traditional inter-State dispute resolution mechanisms or time-consuming court procedures, space-related companies and States can rely on investor-State arbitration to settle disputes.
Current ADR frameworks are also suitable for resolving cross-jurisdictional and outer space disputes due to their inherent neutrality. Many ADR-based tribunals and forums allow for disputes to be resolved with greater neutrality than settling the matter in the courts of the home or host State[21]. This is because parties can choose both a neutral seat of arbitration and the arbitrators to represent their interests, ensuring that States are able to resolve conflicts through transparent and non-politicised claims frameworks[22]. Given the increasing likelihood of orbital collisions, ADR – instead of international litigation which is prone to sovereignty issues – allow private companies and nations to swiftly appoint a neutral expert panel to determine a resolution.
Finally, ADR stands as a preferred method of resolving outer space disputes due to its ability to guarantee strict confidentiality. This is because arbitration proceedings remain private, subsequently ensuring confidential and sensitive technical information central to the space industry remains private – unlike court litigation where hearings and judgments become public record.[23] When disputes involve intellectual property or competitive advantages, privacy is essential to protecting core business functions and interests without damaging reputation or commercial relationships[24]. The high-level of confidentiality offered by ADR processes therefore protects the commercially sensitive information of space companies and the financial data of private investors. Arbitration can keep the dispute resolution process internal, which is particularly valuable for commercial parties wishing to maintain confidentiality of their business relationships and operations following the resolution of the dispute[25]. As such, ADR remains a suitable and crucial part of dispute resolution in an era of technological developments and novel conflicts.
Limitations of ADR frameworks in settling outer space disputes
Fundamentally, ADR is a voluntary, consent-based system, which gives rise to situations where parties may not agree to resolving the issue via ADR processes[26]. Given that many incidents in space occur between differing nation states or competing commercial entities, there may be no pre-existing contract requiring both parties to resolve their disputes via ADR. As such, one party may decline to proceed with ADR processes, resulting in the need to employ State-level diplomatic channels or the Liability Convention[27]. For example, if two satellites collided in space, the route for seeking redress may depend significantly upon the relationship between the parties involved, significantly hindering the ability for ADR to adequately address all outer-space disputes. Hence, in the absence of a pre-existing arbitration clause, submission to ADR processes is heavily contingent on the post-dispute agreement and arrangements by both parties.
Moreover, despite neutrality, confidentiality and enforceability being key advantages of ADR processes, additional challenges arise. Firstly, power imbalances may appear where larger nations or multinational corporations seek to dominate the mediator selection processes[28].
Furthermore, enforceability of arbitral awards under the New York Convention is mostly limited to disputes arising ‘out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declarations’[29]. For example, if a space dispute concerns non-commercial activities, such as scientific research or activities undertaken by non-commercial parties, it may not fall within the scope of the New York Convention, hindering the allocation of liability. The lack of uniform interpretation mechanisms thus impedes the ability for the New York Convention to enforce the outcomes of dispute resolutions.
Finally, whilst confidentiality is an essential feature of ADR, some have argued that it may hinder public interest and reduce the ability to adequately address State responsibility[30]. Outer space is not demarcated by specific jurisdictions and is currently considered as a ‘global common’.[31] As such, if two parties resolve a satellite collision through confidential ADR processes, the cause and consequences of such an accident may remain undisclosed to those affected. Such confidentiality raises ethical concerns about leaving the public uninformed about orbital hazards and other related risks. Employing ADR in resolving outer space disputes can prioritise the reputation and profit of private actors over public safety in what remains a public, outer-space environment.
Areas of future development
With these limitations in mind, ADR has considerable ‘space’ to develop and become a more effective method for resolving extraterrestrial disputes. To address issues of consent, all parties can consider incorporating mandatory arbitration clauses or mandating the establishment of specialised tribunals in the event of a space-related dispute.[32] Whilst international arbitration is well-positioned to resolve commercial challenges, to address the novel forms of disputes arising beyond commercial situations and to better enforce the decisions of ADR processes, some have called for the establishment of a centralised international tribunal[33] or arbitration centre dedicated to outer space disputes, building upon rules of the PCA and functionalities of the DIFC in settling commercial matters[34]. Beyond this, although confidentiality is one of ADR’s fundamental features, parties can introduce greater measures of transparency by promoting regulated levels of information sharing and public access to information concerning public safety[35].
Fundamentally, despite ADR currently lacking in areas such as neutrality and enforceability, there is significant room for improvement and potential to evolve into a comprehensive dispute resolution option for outer space disputes.
Conclusion
Ultimately, the rapid development of space-related endeavours involving both States and private actors will require the current ADR framework to adapt towards more effective dispute resolution. Whilst ADR remains to be a functioning and highly beneficial alternative to formal litigation for settling disputes between various parties, the legal community will need to truly ‘reach for the stars’ in developing ADR processes to adapt to the interests of both the parties and broader community as humanity develops this new frontier.
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[1] Natasha Suhadolnik et al, Mining in space: the role of arbitration in the new frontier (Web Page, 10 October 2005) <https://www.corrs.com.au/insights/mining-in-space-the-role-of-arbitration-in-the-new-frontier>.
[2] Suhadolnik et al (n 1).
[3] ESA Space Debris Office (n 2).
[4] Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, 610 UNTS 205 (signed and entered into force 10 October 1967) (‘Outer Space Treaty’).
[5] Moza Alhamed et al, Loopholes and Lacunae in International Space Law (Web Page, 21 October 2022) <https://www.oxjournal.org/loopholes-lacunae-space-law/>.
[6] Oxford University Press, Max Planck Encyclopedias of International Law (online at 3 March 2025) Max Planck Encyclopedia of International Procedural Law, ‘Space Law Disputes’ [11].
[7] Outer Space Treaty (n 5) art IX.
[8] Convention on International Liability for Damage Caused by Space Objects, opened for signature 29 March 1972, 961 UNTS 187 (entered into force 1 September 1972) (‘Liability Convention’).
[9] Trevor Kehrer, ‘Closing the Liability Loophole: The Liability Convention and the Future of Conflict in Space’ (2019) 20(1) Chicago Journal of International Law 178, 180–181.
[10] Liability Convention (n 9) art XV.
[11] Myfanwy Wood, Exploring Disputes in Outer Space – The Final Frontier (Web Page, 1 December 2025) <https://www.ashurst.com/en/insights/exploring-disputes-in-outer-space-the-final-frontier/>.
[12] Leonor D’Albiousse, Space Law and Arbitration: Dispute resolution mechanisms for space-related disputes (Web Page, 28 March 2024) <https://www.clydeco.com/en/insights/2024/03/overview-of-dispute-resolution-mechanisms-for-spac>.
[13] Stephan Hobe, ‘The permanent court of arbitration adopts optional rules for arbitration of disputes relating to outer space activities’ (2012) 61(4) ZLW.
[14] DIFC Courts, Dubai’s Courts of Space Launch International Working Group to explore space-related legal innovations (Web Page) <https://www.difccourts.ae/media-centre/newsroom/dubais-courts-space-launches-international-working-group-explore-space-related-legal-innovations>.
[15] Hanspeter Neuhold, The law of international conflicts: force, intervention and peaceful dispute settlement (Leiden: Brill Nijhoff, 2015) ch 5.
[16] The Honourable Dan A. Narango, Addressing International Conflict in Space Through ADR (Web Page, 19 November 2025) <https://www.adr.org/news-and-insights/adr-and-international-conflict-in-space/>.
[17] Cecilia Vincenzo, Resolving disputes in outer space: the role of international arbitration (Web Page, 6 April 2023) <https://www.dlapiper.com/en/insights/publications/2023/04/resolving-disputes-in-outer-space-the-role-of-international-arbitration>.
[18] Ibid.
[19] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature 10 June 1958, 330 UNTS 3 (entered into force 7 June 1959).
[20] George A Bermann, Recognition and Enforcement of Foreign Arbitral Awards: The Interpretation and Application of the New York Convention by National Courts (Springer International Publishing, 2017) 1–78,
[21] Scott Atkins, Dispute resolution and restructuring in outer space: Using ADR to drive efficiency and better outcomes for creditors (Web Page, September 2022) <https://www.nortonrosefulbright.com/en-au/knowledge/publications/5bf5d3bb/dispute-resolution-and-restructuring-in-outer-space>.
[22] Narango (n 15).
[23] Will Pryor and Robert M. O’Boyle, ‘Public Policy ADR: Confidentiality in Conflict’ (1993) 46(5) SMU Law Review 2207, 2215.
[24] Ibid.
[25] Julia Dreosti, Satellites and Space: using arbitration to resolve disputes in the new frontier (Web Page, 16 May 2023) <https://www.cliffordchance.com/insights/resources/blogs/arbitration-insights/2023/06/satellites-and-space-using-arbitration-to-resolve-disputes-in-the-new-frontier.html>.
[26] Erin Ryan, ‘ADR, the Judiciary, and Justice: Coming to Terms with the Alternatives’ (2000) 113 Harvard Law Review 1851, 1863.
[27] Simon Chapman KC et al, Disputes in space – The Next Frontier? (Web Page, 18 September 2024) <https://www.hsfkramer.com/insights/reports/inside-arbitration-issue-18/disputes-in-space-the-next-frontier>.
[28] Bernard S. Mayer, Beyond Neutrality: Confronting the Crisis in Conflict Resolution (Jossey-Bass, 2004), 312.
[29] Nael G. Bunni, Conditions of Contract for Construction (Blackwell Publishing, 3rd ed, 1999) ch 2.
[30] Mary Anne Noone, ‘ADR, Public Interest Law and Access to Justice: The Need for Vigilance’ (2011) 37(2) Monash University Law Review 373.
[31] Ibid.
[32] Suhadolnik et al (n 1).
[33] Ibid.
[34] Myfanwy Wood (n 11).
[35] Anush Mishra, ‘Shadows Vs. Spotlights: The Battle for Transparency in ADR’ (Research Essay Paper, Goru Gobind Singh Indrapastha University, 19 November 2025).