Arbitration: A Pragmatic Mechanism for Resolving Space-Related Disputes
As commercial activity in outer space continues to grow, so too does the potential for legal disputes. These may arise from satellite operations, launch failures, or contractual disagreements involving liability, jurisdiction, or performance obligations. Given the international nature of space operations and the fact that parties are often based in different jurisdictions, national courts may not be the first-choice forum for resolving disputes.
However, arbitration has been used for hundreds of years for resolving international trade disputes outside of state courts and could offer an alternative form of dispute resolution in the growing space economy.
Arbitration provides a confidential, neutral, and adaptable forum with binding decisions that are enforceable in over 170 countries through the New York Convention. While arbitration clauses are typically used by parties with a pre-existing contractual relationship, disputes may also be referred to arbitration after they arise, provided both parties agree.
The blend of state and private actors involved in space infrastructure projects is well-suited to arbitration, offering a private dispute resolution mechanism for contractors, launch providers, and satellite operators that accommodates public and private interests while avoiding the perceived bias of national courts.
Arbitration is already well used in construction, energy and maritime disputes so there are already many experienced decision makers in technical fields that no doubt could use their expertise in supporting space disputes. Where a dispute demands greater technical expertise e.g. aerospace engineering or orbital mechanics, arbitration allows parties to appoint arbitrators with sector-specific expertise, ensuring informed decision-making.
Recognising the growing relevance of arbitration in this field, arbitral institutions which administer arbitrations have begun to develop tailored frameworks. In 2011, the Permanent Court of Arbitration (PCA) issued the Optional Rules for Arbitration of Disputes Relating to Outer Space Activities, which include provisions for waiver of immunity, confidentiality, technical expertise, and procedural flexibility. The PCA also maintains a panel of arbitrators and experts with space law experience.
Similarly, the DIFC Courts of Space initiative - launched in 2021 - supports the global space economy through a specialised legal framework. This growing institutional engagement signals a recognition by the arbitration community of the growing number of disputes that involve space commerce or space related issues. Whether such specialist rules are required or will be used remains to be seen. What is clear is that the existing international arbitration infrastructure and existing experienced arbitrators could provide an alternative forum for resolving space disputes.
