The commercialisation of space is leading to a rise in legal disputes. This blog provides an overview of jurisdictions and forms of dispute resolution.
For a long time, activities in space were based on government initiatives for research purposes and military contexts. These areas of activity continue to play a prominent role. However, there is also an increasing amount of private-sector activity in space. This growing economic activity raises a number of complex legal issues at various levels of national and international law. This is accompanied by a rising number of disputes between the various players at all levels.
Types of legal disputes: space at the interface between law and economy
The space economy operates at the interface between different areas of law and economy. A large number of legal disputes concern satellite projects. These can arise in all phases of a project – from manufacturing and transport into orbit to operation and ultimately decommissioning. A rough distinction can be made between private law and public law disputes.
Commercial and corporate law
- Production: Disputes during the production phase are often of a typical commercial nature. Satellites and other products intended for use in space are usually highly complex technical products. This means the supply chain has to meet very high standards. Disputes can arise during the manufacture and commissioning of a satellite, as demonstrated by the arbitration proceedings in the case Spacecom v. Israel Aerospace Industries. This dispute was triggered by the delayed delivery of a satellite, which was ultimately destroyed when a SpaceX rocket exploded. The arbitration proceedings in the case Ukrkosmos v. Macdonald Dettwiler and Associates Corporation also concerned the production of a satellite – the project was cancelled prematurely as a result of the Russian war of aggression, based on a force majeure clause.
- Launch problems: A critical moment in any space mission is the launch of the rocket required for transport – the launch vehicle. This remains fraught with risk. The arbitration proceedings in the case Avanti Communications v. Space Exploration Technologies arose because SpaceX failed to achieve the contractually agreed number of successful launches of the Falcon 9 launch vehicle.
- Operational disruptions in orbit: Technical problems with satellites can arise, for example, due to collisions with space debris or interference in orbit. Thuraya Satellite Telecommunications v. Boeing Satellite Systems International concerned solar cells that had been installed on satellites launched between 1999 and 2001 and later failed prematurely.
- Sales and leasing: ABS v. KTSAT concerned the sale of a satellite already in orbit. More than two years after its conclusion, the transaction was found to be invalid under national foreign trade law. Avanti Communications v. The Government of Indonesia involved non-payment for the leasing of satellite capacity.
- Insurance disputes: Insurance companies have recently started to develop special policies for space projects – a business area in which proceedings are also expected.
Administrative, international and European law
- Use of frequencies and orbital positions: The allocation of frequencies is governed by international law, primarily by the International Telecommunication Union (ITU, a United Nations organisation) and its Radio Regulations. The case Eutelsat v. Media Broadcast, Deutsche Telekom and Eutelsat v. SES concerned disputes over the allocation of the 28.5° East orbital slot, which the ITU had registered in favour of the Federal Republic of Germany and which had in turn been allocated to Media Broadcast by the German authorities. Eutelsat pursued alleged claims to the use of certain transmission frequencies that Media Broadcast had allocated to SES.
- Investment protection proceedings are arbitration proceedings that deal with claims for compensation by foreign investors in the host state on the basis of investment protection agreements under international law. The publicly known investment protection proceedings relating to space law primarily concerned the allocation, reservation and revocation of orbital positions and transmission frequencies by national regulatory authorities. The revocation of such authorisations for the use of certain frequency bands by Indian authorities following media attention triggered the investment arbitration proceedings Devas v. India and Deutsche Telekom v. India. Eutelsat v. Mexico concerned the mandatory reservation of frequency bands for government purposes that had been imposed on the investor. In the future, space debris might also play a role in investment protection proceedings. For example, it is being discussed whether the full protection and security standard in this context could lead to State protection obligations in view of damage to satellites caused by space debris (Zielinski; Hobe et al.). While the Liability Convention also provides for liability for space objects, it is unclear whether this would also cover space debris, which would be virtually impossible to attribute to a specific State (Hobe et al.).
- Export control and foreign trade law: Technology used in satellites may be subject to export control regulations on dual-use goods. This refers to goods that can be used for both civilian and military purposes and therefore require an export licence from the national authorities (in Germany, the Federal Office for Economic Affairs and Export Control). The transaction in the case ABS v. KTSAT (see above) was also challenged on the basis of export control regulations.
Legal framework for legal disputes: International agreements reach their limits in space
Space-related projects are generally carried out on the basis of comprehensive contracts with a high degree of regulation. In such cases, choice of law clauses are usually included and determining the applicable law does not pose any problems. In the absence of a contractual provision, it may be necessary to rely on the generally applicable rules of law. If the subject of the legal dispute is in orbit, this typically raises the question of the applicable law.
The international legal framework for space activities consists primarily of the Outer Space Treaty of 1967, the Rescue Agreement of 1968, the Liability Convention of 1972, the Registration Convention of 1976 and the Moon Agreement of 1978. Within Europe, there is also the draft EU Space Act of 2025, which is intended to regulate the space economy. Current problems associated with the intensified use of space, including increasing amounts of space debris, have so far been addressed primarily by soft law instruments such as the 2002 Space Debris Mitigation Guidelines and the 2019 LTS Guidelines. Nevertheless, there remains a regulatory deficit – this can be seen, for example, in a number of unresolved issues surrounding space mining.
Dispute resolution: issues of jurisdiction in space activities
Legal disputes may be heard by state courts, particularly in the case of domestic projects for public bodies or issues relating to public procurement law.
However, the high level of interest in non-public proceedings, the international network of project participants and the highly complex technical issues often make alternative dispute resolution (ADR) and dispute resolution before arbitral tribunals the preferred options. If arbitration proceedings are initiated, the space-related nature of a dispute does not usually lead to any serious problems with regard to the jurisdiction of the arbitral tribunal and the applicable law: Space-related disputes fall under the vast majority of definitions of "investor" and "investment" in existing investment protection treaties. For ICSID proceedings, arbitration practice in connection with Article 25 of the ICSID Convention relies on the Salini criteria, which require a contribution of money or assets, a certain duration, an element of risk and a contribution to the economic development of the host state. Investments in satellites often involve significant capital expenditure, high risks and lengthy implementation and will therefore fulfil the Salini criteria in many cases (Hobe et al.).
Where the treaty requires it, there will generally also be a sufficient territorial connection. If the satellite is already in orbit, this connection can be established via the registering State – even if the satellite itself is not located in the territory of any particular State. The Outer Space Treaty assigns exclusive jurisdiction over objects in space to the State in which they are registered. The same applies to orbital positions and frequencies. Difficulties may arise, for example, in the case of rocket launches involving several States (Hobe et al.).
The most significant initiative specifically for arbitration proceedings is the PCA Outer Space Rules adopted in 2011, based on the 2010 UNCITRAL Rules, which are supplemented by lists of experts and arbitrators. In addition to the panels of experts and arbitrators (Articles 10 (4) and 29 (1)), the Outer Space Rules also provide for the requirement of "non-technical documents" (Article 27 (4)), which are intended to explain and summarise scientific and technical issues. They also contain rules on handling confidential information (Article 17 (6)). Nevertheless, no arbitration proceedings based on the Outer Space Rules are known to have been conducted to date.
Special features of space-related legal disputes
Looking at the publicly known legal disputes to date, a number of special features can be identified that are typical for disputes in this industry.
The projects are often technically complex and involve high costs and risks – and therefore also carry a high level of liability. Comprehensive limitations of liability are typical, especially for the period after the launch phase: The reasons for failures and malfunctions during launch or in space are practically impossible to determine because the technology is either destroyed or does not return to Earth. It is therefore common to have provisions stating that both the manufacturer's and the launch service provider's liability ends at an early stage. Depending on the individual provisions, a failed launch or an unsuccessful placement of the satellite into orbit may be excluded from liability as soon as the launch vehicle has lifted off from the launch pad. So-called "cross-waivers" are also common among the parties involved, who exempt each other from liability and also pass on this provision within their affiliated companies (Zielinski/Frohloff). In the launch phase, there is therefore a need for insurance to cover the risk of malfunctions or accidents as extensively as possible.
Disputes are characterised by high amounts in dispute and by the fact that they sometimes revolve around highly technical issues. The situation is further complicated by the financial and organisational involvement of government agencies (such as ESA/NASA). Individual projects are also (geopolitically) sensitive because they sometimes touch on matters of public interest.
Due to the small number of players, who are generally active internationally, there is also an increased interest in non-public proceedings before arbitral tribunals.
Space-related legal disputes are becoming increasingly complex
The increasing commercialisation of outer space is leading to a growing number of complex disputes at the interface between private law, public law and international law. They are characterised by high amounts in dispute, considerable technical complexity and the need for fast and confidential dispute resolution. Against this background, arbitration proceedings and other forms of alternative dispute resolution are proving particularly suitable, even if instruments specifically tailored to space, such as the PCA Outer Space Rules, have hardly been used in practice to date. With the growing density of regulation on space and the increasing economic use of orbit, the importance of specialised dispute resolution mechanisms in space law is likely to keep growing.
