Dispute resolution in extra-terrestrial realms

Growth in commercial and economic activity often precedes an increase in disputes, and the space industry is likely to be no exception. Let’s consider the risks and challenges facing stakeholders in a significant commercial space economy and discuss the role of international arbitration in resolving outer space disputes.

“… the wise man looks into space and does not regard the small as too little, nor the great as too big, for he knows that there is no limit to dimensions.” Chuang-Tzu

Introduction

Space has always fascinated humankind. Over the centuries our ancestors have gazed at the skies and pondered the vast expanse and all the mysteries it holds, many of which have lived on in mythology and religion.

Half a century since humans set foot on the moon, space has acquired a different role and significance in our society. From data and telecommunications to global positioning and navigation, from agriculture and forestry to weather forecasting and natural disaster detection, our dependence on space-related technologies in our day-to-day lives is enormous and growing still.

Thanks to technological advances such as reusable rockets and the consequent reduction in launch costs, outer space is no longer the exclusive domain of a select few state governments. Today it is the private sector that is driving the global space industry, which, along with all its downstream market and supporting activities, reached US$545bn in 2022^[1] and is predicted to be worth as much as US$1.8trn by 2035.^[2]

Growth in commercial and economic activity often precedes an increase in legal disputes, and the space industry is likely to be no exception. In this article we consider some of the risks and challenges facing stakeholders in a significant commercial space economy and discuss the role of international arbitration in resolving outer space disputes.

The cosmos of complexities in space disputes

Together with all its markets and end customers, the space industry covers a huge array of activities ranging from the manufacture and delivery of complex space systems to launch services, and to a great variety of ground infrastructure and support services.

The high level of complexities in a space systems project generally means that the potential and scope of space disputes will be similarly vast.

Spacecraft manufacture and delivery

Taking constellation projects as an example, these typically consist of hundreds (or even thousands) of satellites, and often require new manufacturing capabilities and the delivery of complex systems and networks. Owing to the dynamic and complex nature of a space systems project and constantly evolving technologies, the space manufacturing industry comprises a large number of system and platform manufacturers and subsystem or component suppliers across the globe – a combination of which would come together to form an industrial consortium on a given project.

As is commonly the case with large-scale projects, it is important to ensure that key terms and conditions appliable to parties within the consortium, throughout its multiple layers, are workable and consistent. In addition, these projects are likely influenced by a patchwork of considerations such as insurance, procurement, export control, regulatory and licensing, and data laws and cybersecurity regulations.

In addition to manufacturing and product delivery, space systems providers increasingly offer integrated solutions such as data processing and distribution. These contracts need to be tailored individually to cater for the specific scope of activities and services both on the ground and in space; they will also need careful drafting to regulate distinct and potentially novel risks and liabilities, all of which may be fertile ground for legal disputes.

Launch services

A successful launch is central to every space project, and the launcher industry has evolved rapidly to meet increasing demand. Thanks to innovations such as vertical launching systems and propulsion technologies, the launcher market is more affordable and accessible than ever, with the result that customers now have the option to source a launcher directly and independently from procurement of the spacecraft itself. This is likely to introduce additional complexities for the customer/purchaser who will itself assume responsibility for ensuring that the relevant items are delivered to the launch service provider in time and in the manner agreed.

Moreover, launch slot availability is a sought-after resource and, in some cases, launch windows require precise alignment with the orbit and trajectory of celestial bodies, which means that even minor delays in the procurement or delivery of hardware can have a major knock-on effect on the overall project.

Launch failures can create further risks. Even if there are dedicated insurance policies in place to cover launch activities, critical events such as explosions and voluntary destruction may give rise to an array of liabilities and potential legal claims for all parties concerned.

Frequency interference, orbital congestion and collision risks

The past few decades have seen unprecedented technological advances in radio communications, resulting in an exponential growth in civilian and military services and applications, from aircraft and maritime navigation to satellite broadcasting and scientific research. As in-orbit satellites, service providers, operators and end users all increase in number, the demand and competition for radio frequencies and geostationary orbital positions has also grown significantly, so much so that the whole industry now faces real risks of harmful interference with radio frequencies,^[3] giving rise to major legal disputes.

Another key factor driving the anticipated increase in space disputes is the congestion of the Earth’s orbit. According to the United Nations Office for Outer Space Affairs (UNOOSA), as of November 2023, 17,000 satellites had been launched into space and 35% of these were launched within the preceding three years. With planned launches of thousands of new satellites by commercial firms, UNOOSA anticipates that there is the potential of 100,000 satellites being in orbit within the next decade.^[4]

The huge rise in the number of satellites will inevitably lead to a congested orbital environment and heightened risks of contact or collision, which pose a major threat to those active satellites in space as well as all those that benefit from space-derived technologies on Earth.

The risk of collision is exacerbated by the mass of space debris. Based on the European Space Agency’s research in December 2023, it is estimated that there are 130 million pieces of debris in orbit between 1mm and 1cm in size, in addition to a further one million objects between 1cm and 10cm and 36,500 objects greater than 10cm^[5].

Needless to say, the growing congestion in orbit is increasingly problematic for satellite operators who not only need to factor debris tracking into their business and financial planning but may also be forced to manoeuvre satellites to avoid collisions, which can be costly. Given the high levels of investment in these projects, satellite operators will be keen to find ways to recover any damage or loss suffered as a result.

Read part 2 here.

Written by Naomi Pryde and Jue Jun Lu, DLA Piper.

Space Comm Scotland

DLA Piper are delighted to be hosting a Space Law Symposium as part of Space Comm Scotland (11 and 12 September) created specifically to address the space law questions that keep lawyers awake at night. It’s free to attend and there will be a mixture of key note addresses, panels and fireside chats. Please direct any questions you might have to the authors and they look forward to seeing you there. 

[1] See The Space Report 2023, by the Space Foundation.

[2] See McKinsey & Company, Space: The $1.8 trillion opportunity for global economic growth, 8th April 2024.

[3] One example of serious harmful interference is that of a 315-million-euro Soil Moisture and Ocean Salinity (SMOS) probe of the European Space Agency that was "bugged by patches of interference from radar, TV and radio transmissions in what should be a protected band", as reported here.

[4] United Nations Office for Outer Space Affairs, Registration of objects launched into outer space, Stakeholder Study, November 2023.

[5] The European Space Agency (ESA), ‘The latest figures related to space debris, provided by ESA’s Space Debris Office at ESOC, Darmstadt, Germany’, as updated on 6th December 2023, available here.