Viva Dadwal, Madeleine Macdonald
Viva Dadwal, Madeleine Macdonald
Viva Dadwal, Madeleine Macdonald
Copyright 2020 Dadwal & Macdonald. Published by Eleven International Publishing, with permission.
IAC-20-E714.58206
Arbitration of Space-Related Disputes: Case Trends and Analysis
Abstract
To advance understanding of how arbitration may contribute to the resolution of space-related disputes, this research
catalogues and analyzes all publicly-reported space-related disputes that to date have been resolved through
international arbitration. More specifically, this compendium of arbitral awards and court decisions will provide
trends and analyses on the: (i) type and subject-matter of space-related disputes submitted to international arbitration,
as organized by industry and topics; (ii) kinds of disputants currently employing international arbitration, as
organized by type and size of actors; (iii) applicable laws used in international arbitration; (iv) preferred seats; and
(v) arbitral institutions administering the dispute. Cataloguing and analyzing space-related disputes that have already
been resolved through international arbitration will offer important insights and understandings on current industry
practices and complement existing research on the use of arbitration clauses by companies providing space-related
products and services. These trends and analyses may be used by scholars, policymakers, and legal practitioners, to
assist in the resolution of any future space-related disputes, and assess the successes and failures of the current
dispute-resolution infrastructure for resolving space-related disputes. To our knowledge, there exist no consolidated
catalogues for publicly-reported space-related disputes that have been resolved through international arbitration.
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treaties provide a machinery for binding dispute project-based agreements, and institutional regimes and
settlement. This lacuna was intentional. Space operating agreements.
activities of the day, although limited, were imaginably
risky and still in the early stages of development. Due to the increase in privatization and
Moreover, until recently, states were generally reluctant commercialization of space activities, commercial
to accept the compulsory jurisdiction of any contracts are one of the richest sources of law giving
international tribunal [3]. In the absence of direct rise to space-related arbitration. Arbitration clauses are
guidance on binding methods of dispute settlement, already prevalent in commercial contracts concluded by
existing methods of dispute resolution in public both state and non-state actors. For example, the
international law are incorporated into space law European Space Agency (ESA) has long used
through general international law and the principles arbitration as its preferred method of dispute resolution
found in the UN Charter (see notably Articles 2(3) and in its model contracts with contractors [5].
33). Consequently, states may avail themselves of, inter Additionally, to protect investments made by a foreign
alia, adjudication and arbitration to resolve inter-state investor from one contracting state in the territory of the
space-related disputes. other contracting state, many of the thousands of
bilateral investment treaties and free-trade agreements
However, non-state actors lack the recourses offered in existence also contain arbitration as a method of
by international law, because they are not considered to dispute resolution [6].
be subjects of it. Domestic litigation of cross-border
space-related disputes often proves unsatisfactory, due This binding method of resolving disputes is also
to loss of confidentiality, uncertainty in the recognition found in very specific instruments for highly limited
and enforcement of judgments across jurisdictions, and areas of space activities. For example, cooperation and
its susceptibility to political pressure and claims of project-based agreements often demonstrate the will to
sovereign immunity on the part of defendant states. use arbitration to resolve disputes. Examples include the
With the growth in the space industry, there have been 1969 United States-Italy Memoranda of Understanding
many renewed efforts to establish more effective between the Università degli Studi di Roma (Aerospace
binding methods of international dispute resolution for Research Centre) and the National Aeronautics and
cross-border space-related disputes [4]. Space Administration (NASA) for Launching Satellites
from the San Marco Range; the 2010 Cooperation
One of the leading contenders in such efforts is Agreement Between the Government of Canada and the
international arbitration. This method of dispute European Space Agency; and the 1972 France - Federal
resolution is frequently used to resolve disputes between Republic of Germany Agreement for the Construction,
parties that are situated in different jurisdictions, or Launch and Utilization of an Experimental
disputes that have a cross-border component. It is a Telecommunications Satellite. Likewise, several
final and binding method of dispute resolution which is institutional regimes and operating agreements also cite
built on the consent of parties and the principle of party optional or compulsory arbitration provisions to settle
autonomy. Due to these characteristics, this method disputes. The most notable of these is the 1998
often escapes the many “one-size-fits-all” disadvantages International Space Station (ISS) Intergovernmental
presented by domestic litigation. For example, Agreement, which permits ISS partners to submit
disputants control the selection of arbitrators, who are “issue[s] not resolved through consultations” to an
often chosen for their expertise and can operate on a “agreed form of dispute resolution such as conciliation,
confidential basis, which leads to higher confidence in mediation, or arbitration” [7]. Other examples include
issued decisions (and thus the enforceability of the the 1992 Constitution and Convention of the
arbitral award). Indeed, the existing infrastructure of International Telecommunication Union; the 1980
international arbitration has been appealing to both state Convention for the Establishment of a European Space
and non-state actors alike. Agency; the 1971 International Telecommunications
Satellite Organization (INTELSAT) and its Operating
Clauses mandating resolution by arbitration are Agreement; and the 1971 Operating Agreement of the
frequently written into contracts and treaties before Intersputnik International Organization of Space
disputes arise, although it is not uncommon for parties Communications (Intersputnik).
to submit existing disputes to arbitration using
submission agreements. With respect to pre-dispute
III. Goals and objectives of study
arbitration agreements, various sources may give rise to
arbitration, including commercial contracts, investment This research seeks to establish the current status of
treaties and free-trade agreements, cooperation and the use of international arbitration in the resolution of
space-related disputes by cataloguing and analyzing all
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Initial results were screened using the above the contractual expectations of parties). Data
working definition. A few examples of topics that were was not collected on the procedural laws
excluded from the survey results are disputes relating to applicable to the dispute.
airspace; telecommunications; and provision of 4) Preferred arbitral seats: Where available,
multimedia and television services. The scope of this analyzing preferred arbitral seats provides
study also excludes disputes resolved through domestic insights with respect to the mandatory
arbitration. procedural rules that apply to the arbitration,
which can impact, inter alia, the validity of the
D. Coding Relevant Results arbitration agreement, jurisdiction of the
tribunal, and recognition and enforcement
All arbitral awards and decisions identified as being efforts.
relevant were coded according to eight data categories.
5) Arbitral institutions administering the dispute:
The coding process was iterative since information
Where available, analyzing which arbitral
about arbitration is often confidential and thus publicly
institutions are most frequently used to
unavailable. Unavailable data points, or inapplicable
administer space-related disputes provides
data points were noted in the dataset.
insights into user experiences, particularly an
institution’s ability to satisfactorily facilitate
The following categories were used, alongside a
dispute resolution (e.g., type of facilities,
brief explanation for why:
quality of service, perceived neutrality), as well
1) Type and subject-matter of space-related as an institution’s reputation.
disputes, organized by industry and topics:
6) Amounts claimed or awarded: Where
Analyzing the type and subject-matter of
available, analyzing the quantum in dispute
dispute may provide information about which
provides insights on compensation for the
types of disputes are most likely to be resolved
alleged harm suffered at the hand of the
through arbitration, and the underlying source
respondent.
of the arbitration agreement.
7) Size of panel/number of arbitrators elected to
2) Disputants currently employing international
tribunal: Where available, analyzing parties’
arbitration, as organized by type of actors:
preferences with respect to the size of arbitral
Analyzing the disputants currently employing
panel may provide insights on perceived size
international arbitration may provide
and complexity of dispute, as well as costs and
information about the types of users who are
length of arbitration.
more likely to prefer arbitration over other
dispute resolution methods, for example as a 8) Year dispute concluded: Where available,
result of their formal or informal dispute disputes were also coded by year of the arbitral
resolution policies and preferences. Building decision was issued, or alternatively the
on a previously developed a schematic for dispute settled between the parties. This was
categorizing space disputes, disputants were done to assess trends over time.
organized according to whether they were
states, commercial entities, or
IV. Results
intergovernmental organizations [10]Error!
Reference source not found.. Although the Out of the total results yielded, only 38 reported
study originally sought to assess the “size” of disputes were considered relevant enough to be
disputing parties to test whether larger, better- analyzed for key trends. This section describes the main
resourced parties employ arbitration more challenges and limitations of the study, as well as the
frequently, this data category was subsequently breakdown of research results by category.
replaced due to difficulties in assessing such
variable, and rise of third-party funding in The low number of results can be attributed to at
arbitration. least three main challenges and limitations. First, as
3) Applicable substantive laws: Where available, expected, the confidential nature of arbitration resulted
analyzing the substantive laws used in in missing data points and unreported awards. These
international arbitration provides insights into limitations reduced the comprehensiveness of the
parties’ preferences as to the ideal law that research undertaken, and affected the reliability of
parties wish to govern substantive claims under results. Going forward, and where possible, these
dispute (e.g., due to a legal jurisdiction’s well- limitations may be overcome by monitoring and
developed jurisprudence, or compatibility with periodically iterating the research conducted. The low
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turnout of decisions and information may also be commercial arrangements and partnerships comprised
supplemented by surveying individuals involved in the six disputes each (17.6% of satellite-related disputes).
space arbitration community, who may have first-hand Finally, a minority of disputes included disputes
knowledge of such space-related disputes. Second, the stemming from onboard technical failure (5 disputes, or
adopted search strategy and databases used likely 14.7% of satellite-related disputes); manufacturing, sale,
contributed to the low yields in relevant arbitral and purchase of satellites (5 disputes, or 14.7% of
decisions. As there exists no universally-accepted satellite-related disputes); and lease of spectrum rights
definition of “space-related disputes,” the corpus used to and orbital slots (4 disputes, or 11.7% of satellite-related
elicit relevant hits may not have adequately captured all disputes).
relevant space-related disputes. The scope of the
adopted working definition affected the total number of
B. Disputants Employing International
relevant disputes ultimately analyzed. Moreover, the
Arbitration
two comprehensive international arbitration databases
employed had certain coverage limitations (e.g., Of the 38 total disputes, disputes between two purely
Westlaw’s coverage for ICC administered disputes commercial parties formed the largest category of
spanned the period 1975-2004 only). Going forward, disputants (19 disputes, or 50% of total). Disputes
and where possible, these limitations may be overcome between commercial and state (or state-related) parties
by generating additional words and terms, which may formed the next largest category of disputes (13
be searched on other international arbitration databases, disputes, or 34.2% of total). Within these 13 disputes
particularly those belonging to arbitral institutions. involving a commercial and state (or state-related)
Third, the relevance of results generated was a party, 8 disputes were commercial arbitration cases, and
subjective inquiry, which may have led to a number of 5 disputes were investor-state arbitration cases. Taking
results being improperly excluded. This was into consideration privatization of intergovernmental
particularly the case given the overlapping scope of organizations, disputes between former
telecommunications law and space law, and attempts to intergovernmental organizations and commercial
differentiate between space operations and space entities, and former intergovernmental organizations
applications. Going forward, development of an and states (or state-related) parties comprised 3 (7.8%)
inclusion/exclusion criteria and/or assistance from a and 2 (5.6%) out of the total 38 disputes, respectively.
second reviewer may be useful in confirming the Finally, only 1 dispute concerned an existing
relevance of results generated. intergovernmental organization and commercial entity
(2.6% of total). Notably, there were no instances of
intra-state disputes, or intra-intergovernmental
A. Type and Subject-matter of Dispute
organization disputes.
Of the 38 total disputes, 32 were commercial
disputes (84.2%), and six were investor-state disputes
(15.7%). Research results yielded no disputes arising C. Applicable laws
from cooperation and project-based agreements, or
A wide variety of laws were applied to the space-
institutional regimes and operating agreements.
related disputes studied. Although data was unavailable
for a majority of disputes (19 disputes, or 50% of total),
Further, out of the 38 total disputes, 34 disputes
were reported as satellite-related disputes (89.4% of English law, Indian law, Spanish law, Swedish law, and
total). Out of the two disputes that were not satellite United Arab Emirates law were all applied to
substantive claims in commercial cases. Other
related disputes (5.2% of total), one related to seizure of
applicable laws included California law, New York law,
assets arising from space-related transactions, and the
and Ontario law. International law applied to investor-
other related to a space-craft launch service partnership
state claims, particularly as negotiated under investment
agreement. The subject-matter of two disputes was
unknown (5.2% of total). treaties and free-trade agreements. This variable did not
apply to two disputes which were discontinued at an
early stage of the proceedings.
Moreover, most satellite-related disputes triggered
multiple subject-areas or topics. Out of the 34 satellite-
related disputes, a majority of disputes related to launch D. Preferred Seats of Arbitration
and delivery of satellites into orbit (10 disputes, or
29.4% of satellite-related disputes); regulatory measures A wide variety of seats were chosen for the space-
and policies (9 disputes, or 26.4%); and lease of satellite related arbitrations studied. Although data was
capacity (8 disputes or 23.5% of satellite-related unavailable for a significant number of disputes (12
disputes). Insurance disputes and disputes relating to disputes, or 31.5% of total), Paris (5 disputes, or 13.1%
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Limited v. Antrix Corporation Limited). Since 30 years later: “An attempt to create anything specific
regulatory measures and policies affecting the satellite for this field for the space industry would therefore
industry frequently contribute to space-related disputes, neither seem feasible nor necessary. Indeed, it might be
it remains to be seen whether commercial agreements a step backwards, because a multilateral system of
signed by state-related actors will give rise to more enforcement of arbitration awards is available for
investor-state arbitrations in the future. The suitability international commercial arbitration and has been
of international arbitration to resolve disputes arising in accepted worldwide by industrialized and developing
other space-related industries has not yet been tested countries . . .” [12].[10] That said, while a specialized
and also remains to be seen. legal regime appears unnecessary, there exists an
opportunity for players in the arbitration market,
(2) Space-related arbitration disputants are whether they be arbitral institutions or legal
changing jurisdictions to develop a reputation for comparative
expertise in space-related dispute resolution within the
Our research shows that although commercial
existing international arbitration regime. Luxembourg
entities form the largest category of disputants, states
represents one such notable example [13].
and state-related entities (e.g., state-owned enterprises,
agencies, or instrumentalities) are also quite likely to be
involved in international arbitration of space-related VI. Conclusion
disputes. Specifically, the second largest category of
In conclusion, our study confirms that international
disputes occurred between commercial entities and state
arbitration is indeed used by both state and non-state
(or state-related) parties (13 disputes, or 34.2% of total),
actors in the resolution of publicly-known space-related
which arose from arbitration agreements found in
disputes. This method of dispute resolution is primarily
commercial contracts and investment treaties.
employed in the resolution of commercial disputes,
However, there were no documented instances of intra-
followed by investor-state disputes. To date, there are
state disputes, or intra-intergovernmental organization
no publicly known instances of international arbitration
disputes, which may be a function of the confidentiality
used to resolve public international law inter-state space
of arbitration, and/or may suggest the use of other
related disputes, or disputes arising from cooperation
dispute resolution mechanisms.
and project-based agreements.
Interestingly, at least one former intergovernmental
In addition to the empirical data generated from this
organization, Eutelsat, seems to be a habitual user of
study, three themes have also emerged. First, even as
international arbitration to resolve disputes both with
the space industry grows and evolves, satellite-related
other commercial parties and with states (e.g., Eutelsat
disputes continue to dominate space-related disputes
S.A. v. United Mexican States, ICSID Case No.
resolved by international arbitration. Second, the
ARB(AF)/17/2)). We only found only one international
changing face of the space industry is reflected in the
arbitration involving an existing intergovernmental
parties to space-related international arbitration. Third,
organization (Intersputnik) and another commercial
despite these changes, the existing international
entity.
arbitration regime appears to meet users’ needs and
further specialization does not seem to be warranted at
(3) Existing international arbitration this time. These trends and analyses may be used by
infrastructure appears adequate scholars, policymakers, and legal practitioners, to assist
While it can be safely assumed that other dispute in the resolution of any future space-related disputes,
resolution methods are being utilized to settle space- and assess the successes and failures of the current
related disputes, the increase in the use of international dispute-resolution infrastructure for resolving space-
arbitration over time suggests that parties are satisfied related disputes.
with the existing international arbitration regime to
resolve space-related disputes. The diversity of Finally, future comparative research will be required
applicable laws, seats, and arbitral institutions revealed to enrich the applicability of this study. For example,
by our study results suggest that disputants are taking most space-related disputes documented concern
advantages of one of international arbitration’s key satellites. We hypothesize this is due to the relative
strengths – the flexibility it allows parties to customize importance of the satellite industry, rather than any
their dispute resolution process. While there is always inappropriateness of international arbitration as a
room for improvement, there is no indication that a mechanism for resolving other types of space-related
centralized institution nor a more specialized legal disputes. However, additional research will be needed
regime is warranted at this time. As such, Böckstiegel’s to confirm this hypothesis. Likewise, further research
1992 pronouncement would appear to hold true nearly into the resolution of all satellite-related disputes may
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reveal the comparative importance of the international Republic of India for the Promotion and Protection
arbitration mechanism, and whether there continues “to of Investments.
be a . . . demand to develop techniques for the [7] Article 23(4) of the Agreement Among the
settlement of disputes” [14], or whether there exist Government of Canada, Governments of Member
particular features of such disputes which make them States of the European Space Agency, the
better suited for one dispute mechanism over another. Government of Japan, the Government of the
Russian Federation, and the Government of the
Appendix United States of America Concerning Cooperation
Dataset of arbitral decisions available upon request. on the Civil International Space Station, done at
Washington January 29, 1998.
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