Investment Protection and Space Investors

Investment Protection and Space Investors: “New” Industry, “Old” Rules?

Today, the space sector is more composite than ever. In recent years, an increasing number of non-governmental, or private, commercial operators has entered the market and now operates alongside with more traditional governmental or international space agencies and state-owned companies. Thanks to an increasing number of countries that favour, or at least tolerate, foreign investments in the space sector, space companies have also started operating in and with foreign countries and commercial counterparts.

In this context, it is therefore unsurprising that space activities have generated disputes and it is reasonable to expect that more disputes will arise in the future. As discussed in previous blog posts (e.g. here), where the dispute involves a space company and a State, investment arbitration may provide one venue for resolving it. 

Continued State Influence in the Space Sector

But the state-led investment paradigm that traditionally characterizes the space industry has not shifted completely yet. The space industry was and still is primarily fuelled by governmental programs and, as a result, commercial companies continue to closely cooperate with governments on government-led projects. Due to these close relationships, the recent political polarization and heightened national security concerns, space programs and projects often involve private-public partnerships, private companies acting under governmental supervision or carrying out governmental functions, quasi-private companies participated by governments, and state-owned enterprises (SOEs) carrying out commercial activities. 

Investment Claims and the Challenge of Mixed Ownership and State Influence

The mixed nature and ownership of these businesses may raise issues of standing in the context of investment claims. The ICSID Convention, for instance, provides that tribunals will only have jurisdiction in relation to a dispute concerning a “private international investment” arising “between a Contracting State […] and a national of another Contracting State”. 

Thus, where the investor has governmental connotations or carries out governmental functions, it may not be readily determined whether it qualifies as a “private” national of a State, especially where the relevant Treaties do not provide any guidance.

With respect to investment claims filed by SOEs, for instance, the so-called “Broches test” can guide the tribunals’ assessment. According to this test, a “mixed economy company or government-owned corporation should not be disqualified as a ‘national of another Contracting State’ unless it is acting as an agent for the government or is discharging an essentially governmental function” (Aaron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of other States’, Collected Courses of the Hague Academy of International Law, Volume 136, 1972, p. 354). 

This test mirrors the criteria of attribution under Articles 5 and 8 of the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA) , which place special importance to the purpose behind an entity’s actions, with the consequence that investments made by SOEs (or partially so) could be in principle excluded where they primarily advance States’ policies and objectives. 

To date, however, ICSID tribunals have preferred to focus on the function or nature of the investment, rather than on its purpose, and on the interpretation of the wording of the applicable treaties. In Ceskoslovenska Obchodni Banka, A.S. v. The Slovak Republic at para. 20, for instance, the tribunal found that an investment that promotes or aims at achieving government policies made through an SOE is no bar to the standing of that company so long as its activity is commercial in nature (see also, Beijing Urban Construction Group Co. Ltd v Republic of Yemen, paras. 35-42). In non-ICSID cases, SOEs’ standing has been assessed based on several factors, such as their (i) corporate structure, including the level of government control and power to influence company’s decisions; and (ii) the nature of activity (commercial or sovereign) undertaken and the rules by which the company abide when carrying out that activity (see e.g., Beijing Shougang and others v Mongolia, paras. 404-422; OAO Tatneft v Ukraine, paras. 125-152).

Space Investors’ Standing

The diverse nature of space companies, the (often) close relationship with their home governments and the mechanisms through which governments can influence and control these companies make the space industry a good candidate for the application of Broches, or Broches-like tests in investment arbitration. If these tests will be applied as they have been so far, most space companies that engage primarily in commercial space activities (e.g., satellite telecommunication, satellite launch services or space tourism) would likely retain standing due to the focus on function as opposed to purpose. 

Chances are, however, that the currently more academic approach which mirrors the ARISWA criteria of attribution may be applied to at least some “extreme” cases, such as where an ICSID tribunal would de facto be adjudicating a State-to-State dispute. Consider, for instance, a case in which the launch of a dual-use satellite of a partially state-owned entity through a host State’s launcher is cancelled by the host state due to political tensions with the entity’s home State.

While this assessment requires a case-by-case analysis, it is important that both companies and States carefully (i) review in advance the protections accorded by the relevant treaties and the nationality requirements to accede to those protections; (ii) consider how to best organize their or their companies’ corporate structure and activity; and (iii) seek or provide greater clarity as to the intended meaning of “nationals” in their investment treaties.

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A close win for non-binding instruments in space law

“A close win for non-binding instruments in space law”. This post summarizes the outcomes of the IAC 2023 Special Session debate hosted by the Space Arbitration Association, a multidisciplinary session at this year’s International Astronautical Congress in Baku, Azerbaijan, which brought together high-level speakers from the fields of space law and policy, politics and diplomacy, to engage in a fun and interactive debate on the impact of non-legally binding instruments on the development of the law on outer space. 

The motion of the debate

On the 6th of October, 2023, the Space Arbitration Association hosted an educational debate on the role of non-legally binding instruments in the development of the law of outer space.  The motion of the debate was

“Be It Resolved, Non-Legally Binding Instruments Like The Artemis Accords Will Lead To The Harmonization Of The Law Of Outer Space.”

Non-legally binding instruments like the Artemis Accords have gained relevance following the rapid and successful contributions of emergent State and non-State actors, proliferation of space technologies, and a strained multilateral order. 

Two teams of two members each, argued for or against the motion respectively. The team for the motion (the “Applicants”) consisted of:

• Frans Von Der Dunk – Professor of Space Law, College of Law, University of Nebraska-Lincoln
• Ruvimbo Samanga – Board Member of the Space Arbitration Association; Ambassador, MILO Space Science Institute and

The team against the motion (the “Respondents”)consisted of:

• Ian Grosner – Federal Attorney, Brazilian Space Agency
• PJ Blount – Lecturer in Law, Cardiff University and Executive Secretary, International Institute of Space Law 

The debate was moderated by Viva Dadwal, Member of the Organizing Committee of the Space Arbitration Association; Associate at King & Spalding LLP.

The session began with a poll to gauge the sentiments of the audience, with an initial 48% for the motion, and 52% against. 

Arguments of the Applicants

1. Soft law is a valuable tool for the implementation of hard law. While not favored by all legal scholars, it allows the State to “test the waters”, with an exit strategy should the obligations not be favorable. Soft laws can also be gradually refined and adapted, and finally, they can serve as a Transparency & Confidence Building Measure (TCBM) if States are noting that other States are beginning to follow the relevant principles and recommendations. 
2. The Artemis Accords provide an elaboration of fundamental principles in the Outer Space Treaty, adding specific context to celestial bodies’ settlement and resource extraction. Controversial principles articulated in Articles IX, II, and XII respectively are also given context to avoid disputes. The fact that the Accords are also applicable only between partners makes them ideal for ensuring certainty and uniformity in space activities in a legitimate and logical way. 
3. Criticisms leveled by the Respondents included the US-centric nature of the Accords, as well as how their success was intrinsically tied to the Artemis program, which was argued as problematic and misleading, as it created the assumption that signatories to the Accords would, in turn, contribute to the wider Artemis program. The Applicants noted that the negotiation history of the Accords was tabled on an equal footing, with 8 initial countries each possessing the ability to exercise a veto right against any of the provisions. 

Arguments of the Respondents

1. It was argued that the Artemis Accords had the capacity of eroding the multilateral process, and undermining the existing treaty frameworks in favor of nationalistic interests. The most contentious provisions of the Accords are those elaborating on the use and by extension, commercialization of space resources, for which multiple schools of thought exist as to their permissibility. While various countries continue to domesticate space resource utilization into national law, the Outer Space Treaty is silent on the procedure to be employed, whilst the Moon Agreement necessitates an international regime to be put in place.
2. The issue of safety zones was also criticized for its lack of clarity on the duration and scope of operation, which can lead to situations where actors may unfairly claim access to territory which restricts the legitimate use and exploration of space for another actor. In certain circumstances this may be tantamount to appropriation, as it effectively excludes the rights of another State or party indefinitely, unless the activity, its duration, scope and nature are clearly expressed at the start of the mission. 
3. Criticisms levelled by the Applicants included the fact that the multilateral process has proven ineffective and unable to cope with the rapid developments in space business models, and that the Accords presented an interim measure to allow for the continuation of industry processes. The Respondents noted that the non-binding nature of the Accords would add to the challenges of enforceability, and that binding and enforceable mechanisms were necessary to bolster legitimate business and scientific interests in space. 

Rebuttal Arguments

In the rebuttals the teams were able to respond to points put forward in initial arguments. The Applicants emphasized that the Accords were a living document, which would allow for the continued diversification of interests expressed therein (so far there are 29 signatories from nearly all continents). It is also yet to be seen whether China disagrees with the core substantive approach of the Accords, and thus it cannot yet be argued that they would lead to a geopolitical bifurcation. It was also advanced that the liability regime under the main space treaties was sufficient to address the gap in dispute resolution, with alternative dispute resolution mechanisms also available to satisfy commercial interests (i.e. arbitration and mediation).  

The Respondents made reference to US constitutional law, citing the authorities vested in the different bodies when making commitments on behalf of the State. It was argued that NASA does not have the requisite mandate to sign a legally binding document and that as a result, the Artemis Accords cannot create obligations which are binding and enforceable upon the parties. It was also noted that the Accords would have the likely impact of promoting inconsistent principles into the space domain, including the Executive Order, where it was declared under the Trump administration that space was not a global commons. Such a statement is not factually correct, and undermines the spirit of the outer space treaties. 

Upon making these arguments, a final poll was taken in which the votes were split 59% for and 41% against: a close win for non-binding instruments in space law. The debate concluded with closing remarks and much enthusiasm for a follow-up discussion on this important developing topic. 

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Space Arbitration: Protecting Space Investments

Space Arbitration: Protecting Space Investments. This post summarizes the webinar with the same name organized by the Space Arbitration Association in 2022. The video can be accessed here. 

Space Mining and Investment Protection

Dr. Rossana Deplano discussed the technical and legal complexities that arise from space mining.

Starting first with the technical complexities, Dr. Deplano explained that space mining would roughly follow the same structure of resource mining on Earth, with the process largely being carried out in three stages: prospecting, exploration, and exploitation. The prospecting stage comprises the remote sensing of a celestial body. The exploration stage consists of the targeted extraction of a sample of minerals from a celestial body. The exploitation stage occurs when the extraction of resources from a celestial body is at a commercial level. 

Each technical stage of space mining would give rise to different legal issues. In the prospecting stage, legal issues may concern the sharing of data collected by satellite remote sensing or scenarios surrounding space debris, like satellite collisions or leaving satellites in orbit after prospecting. In the exploration and exploitation stages, legal issues may be related to property rights, priority rights, safety zones (areas subject to notification and consultation), and the creation of space debris during the mining process. The sharing of the benefits derived from the utilisation of space resources, as articulated in Article I of the Outer Space Treaty of 1967 (OST) and discussed in the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS), may also be relevant.

Dr. Deplano then identified two categories of space mining disputes. The first is regarding the interpretation and application of the five UN space treaties: the OST, the Rescue and Return Agreement of 1968, the Liability Convention of 1972, the Registration Convention of 1975, and the Moon Agreement of 1979. The second type of dispute concerns the actual conduct of operators when space mining.

Turning to the role of arbitration in space mining disputes, Dr. Deplano expressed certain advantages and challenges in using arbitration. Well-established arbitral procedures would provide a level of legal certainty to investors and operators. This legal certainty is particularly beneficial for investments in space mining and for private operators when creating their business plans, and may cause trickle-down advantages to States and international organisations interested in space mining.

However, since the interpretation of space law is still very contested, space arbitration would take place against an uncertain legal background. Indeed, there is no unanimity in interpreting the key provisions of the space treaties. Thus, Dr. Deplano suspected that arbitration may not be very well received from some States because of the authoritative power given to arbitrators to interpret space treaties. She explained that several delegations in COPUOS have objected to the idea of depriving States of their power to interpret the space treaties for their own interests. This analysis is particularly relevant to the first type of space disputes related to the interpretation and application of the space treaties. On the other hand, Dr. Deplano noted that arbitration may be more suitable for the second type of space disputes related to the actual conduct of space mining operators.

In Dr. Deplano’s view, arbitration will probably not be a starting point for the progressive development of international space law regarding space mining. Rather, a multilateral forum like COPUOS may be a better starting point to clarify the grey areas of the law—for example, through the COPUOS Working Group on Legal Aspects of Space Resource Activities to facilitate the process of identifying a more universally-acknowledged interpretation of the space treaties.

Property Rights in Space

Mr. Simon Maynard continued the discussion with the importance of protecting property rights in space.

He identified two main reasons for this importance. Firstly, property rights are a way to acquire value; space has the potential to be a significant source of valuable natural resources. Secondly, property rights are a way to protect value. Without property rights, it would be difficult to assert legal rights over the value extracted from space mining, making it difficult to justify the relevant significant expenses.

Then, Mr. Maynard introduced the basic international legal architecture for protecting property rights in space. First and foremost is the OST, which establishes the principles and legal framework applicable to outer space activities. More than 110 States are parties to the treaty, and a further 23 States have signed the treaty. Article I of the OST stipulates that “[t]he exploration and use of outer space … shall be carried out for the benefit and in the interests of all countries … and shall be the province of all mankind”. Article II of the OST further elaborates on this sentiment, and states that “[o]uter space … is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means”. Here, Mr. Maynard found it useful to refer to the idea of a “common heritage of mankind”, which, as the Handbook of Space Law explains, is the idea that certain areas lying outside of national jurisdiction for reasons of scientific and commercial value should be commonly managed by all States on behalf of mankind, and cannot be appropriated by a single State or private person. Mr. Maynard noted that the OST raises the question of whether private property rights are precluded completely in space, but that there seems to be some flexibility concerning non-State actors and property rights.

Secondly, there is the Moon Agreement of 1979. However, the Moon Agreement was only ratified by 18 countries and further signed by four. The Moon Agreement is more restrictive about property rights in space than the OST as there is no flexibility for non-State actors to hold private property rights.

Thirdly, subsequent international and domestic legal developments began to explore the possibility of legalising the appropriation of natural space resources. The first example of this highlighted by Mr. Maynard is the Artemis Accords, a set of principles that govern the civil exploration and use of outer space. The Accords underpin NASA’s Artemis program—missions that aim to return astronauts to the lunar surface. As a State must sign the Accords to participate in the Artemis program, the Accords act as a soft enforcement mechanism. The Accords provide for the extraction of resources in accordance with the OST, with the recognition that such extraction will be critical to support safe and sustainable space exploration and development.

Another example is the Building Blocks for the Development for an International Framework on Space Resource Activities, designed by The Hague International Space Resources Governance Working Group in 2019. Section 8.1 of the Building Blocks looks to “ensure that resource rights over raw mineral and volatile materials extracted from space resources, as well as products derived therefrom, can lawfully be acquired through domestic legislation, bilateral agreements and/or multilateral agreements”. The Commentary for these Building Blocks noted that the key legal basis for Section 8.1 is the freedom for all States to use outer space enshrined in Article I of the Outer Space Treaty.

Prior to the Building Blocks, some States sought to allow the possibility of private resources exploitation in national legislation. For example, in an explicit rejection of the Moon Agreement, the USA passed the Space Resource Exploration and Utilization Act of 2015 and Executive Order 13914 in April 2020, which assert the rights of US citizens to engage in commercial exploration, and to recover and use resources in outer space. In 2017, Luxembourg also adopted national legislation on the exploration and use of space world resources, advancing the idea that space resources are capable of being appropriated.

In response to Ms. Zielinski’s question on how companies would approach the legal uncertainty of property rights, Mr. Maynard suggested that companies would compare the legal certainty and economic reward, and base their decisions on the balance of risk and reward. Mr. Maynard explained that where the economic reward is high enough, it can make the risk in terms of legal certainty acceptable enough to undertake the activity. 

Applicability of International Investment Protections to Satellites

Prof. Stephan Hobe discussed whether international investment protection could apply to satellites, and then gave a brief overview of the potentially relevant investment protection provisions.

Prof. Hobe first highlighted the importance of whether international investment protection could be applied to satellite communications; the telecommunications industry in 2020 made up more than half of the revenue in the space sector.

Then, after introducing the five UN space treaties, Prof. Hobe distinguished between different satellite launching activities to earmark the most important legal issues. First is the pre-launch phase, which refers to the period between the ignition of the launch vehicle to the on-orbit release of the satellite. This is the most precarious phase; during launch, unpredictable events may happen, and may result in severe damages to—or even the complete loss of—the satellite. Second is the on-orbit phase, where the satellite is separated from the launch vehicle and reaches the final orbital position. Third is the end-of-lifetime phase, where the satellite ceases to provide useful services and becomes a non-functional object.

On whether investment protection can cover telecommunication activities, Prof. Hobe considered the question of whether telecommunication activities qualify as investments. Bilateral investment treaties (BITs) often contain a very broad definition of what constitutes a protected investment, including contracts and IP rights. Thus, telecommunication satellites themselves and contracts regarding their launch and operation can be considered protected investments under most BITs. 

They may also be considered investments under Article 25 of the ICSID Convention. An investment must consist of a contribution with economic value and can take any form; investments are not limited to financial contributions, and can include know-how, equipment, and services. Several tribunals have suggested that an investment should have a further requirement of contributing to the economic development of the host State, although there is dispute as to whether this contribution may already implicitly exist from the investment’s economic value. If applying this requirement to telecommunication activities, due to their multinational nature, determining which State is the host State may be a complicated question. Prof. Hobe suggested that it seems more appropriate to determine the host State in relation to each phase of a satellite communication project, with the investor being able to bring investment claims against several host States in the course of one satellite telecommunications project.

To identify the relevant investment protection provisions, Prof. Hobe commented that it is important to consider the typical risks that private investors may encounter in different phases of a satellite operation. 

Generally, the success of private investments in satellite operations depend to a large extent on long-term commitments made by State entities through contracts and administrative licenses. As such, umbrella clauses in BITs are highly relevant because they ensure that the State complies with all its commitments to foreign investors. Even where the applicable BIT does not contain an umbrella clause, host State commitments may still be protected as legitimate expectations under the fair and equitable treatment (FET) standard.

In the pre-launch phase, the principle of full protection and security (FPS) is particularly relevant as satellites are confronted with imminent physical transformations and their corresponding physical dangers. FPS puts an obligation on the host State to provide a certain level of protection to foreign investment from physical damage.

FPS is also relevant to a satellite’s on-orbit phase, as satellites may be exposed to physical dangers such as collisions with space debris or other satellites. Additionally, in the context of international investment law, a distinction can be made between the physical protection of a satellite as a space object, and the rights obtained by the investor for its operation. These rights may include the rights for a satellite to use specific frequencies and to occupy specific orbital positions, both of which are vital for the economic success of the space venture. Thus, FPS may also protect these rights.

When satellites enter the end-of-lifetime phase, they are typically moved into orbits away from common operational orbits, and additional coverage against the risk of damage must be taken.

Prof. Hobe concluded by answering a question by Ms. Zielinski. On how to approach applying the investment regime to outer space, considering that space investments are not within the territory of the host State, Prof. Hobe responded that Article VIII of the OST creates the link between a State and the respective space object. The State of Registry according to Article VIII provides the responsible State for investment protections.

Risks of Extending International Investment Protections to Outer Space

Dr. Gershon Hasin believed that we must be careful when extending the investment protection regime (and commercial arbitration) to outer space investments and activities. More generally, he believed that when considering whether investment treaties can apply to investment disputes concerning space activities, we should adopt a contextual, policy-based decision-making process.

Dr. Hasin first illustrated risks of extending international investment protection regimes to outer space. He applied the idea of “pollution haven” jurisdictions in the environmental context to the context of regulatory regimes for private space activities. States that lack space capabilities are incentivised to participate in space activities by attracting foreign investors. The primary way for States to do so is through creating favourable domestic laws and regulations for investors. At best, this may be through increasing the property rights and gains of investors, but at worst, this may be through reducing environmental and sustainability commitments and duties.

The process of States being incentivised to reduce regulatory burdens on investors risks turning circular, with every jurisdiction enforcing less and less burdens to encourage the relocation of investors to them. This can be referred to as a regulatory race to the bottom. While this may produce immediate gains in wealth for a State, the negative externalities from this process affect all participants in outer space activities and threaten future sustainability.

Dr. Hasin noted that this development is difficult to stop without either norms increasing the cost of relocation or the prescription of regulatory minimums on an international scale. While both solutions are difficult to implement, prescribing regulatory minimums is particularly elusive as international law is based on State consent. Indeed, Dr. Hasin explained that it would be even more difficult to achieve regulatory minimums in the context of outer space, where applicable norms are limited and where most investments are not tied to the host State’s territory in the same way investments on Earth are.

For the space-capable home State of an investor, several important questions arise which relate to the rationales of investment protection. Should home States encourage foreign investments in the State sector in the same way that it does for terrestrial investments? Should tribunals protect investments that take advantage of a supposed space “pollution havens”? Can, or in fact, should, the tribunal act otherwise?

When considering questions like these, Dr. Hasin identified two modes of approaching the decision: the textual rule-based mode, and the contextual, policy-based mode.

Under the textual mode, the applicable rule is identified and then interpreted, producing claims of illegality, suggested policy choices, or proposed arrangements. The rule itself is authoritative and controls the decision-making process. Having its origins in domestic law, the textual mode works on the basis that there is a high probability that the lawfulness of a decision is subject to a legal decision-maker (e.g., the courts). However, apart from international investment law where the proposition of a legal decision-maker is likely, no court or tribunal may ever decide on the legality of an action in international law. As Dr. Hasin explained, the absence of such a ruling from a legal decision-making body is particularly pertinent in space governance, where many norms are outdated and vague, and may be easily denounced. Thus, Dr. Hasin argued that in these cases where legal decision-makers are not likely to play a direct role, the contextual, policy-based mode of approaching decisions should be applied.

The contextual mode concentrates on the process of interactions rather than the strict application of rules. Rules and norms are considered in the context of their ability to shape decisions towards a desired outcome, and towards the goal values of the international community. As such, where a rule is purportedly breached, the focus is on how other participants perceive an act’s effects on the international legal process rather than whether the rule was breached.

Whether investment treaties may apply to space activities lies in the intersection between two fields of international law where different modes of decision are appropriate. Dr. Hasin expressed his view that in most cases, it would not be beneficial under a policy-oriented analysis for a tribunal to interpret the terms of an investment treaty to apply to an investment dispute concerning space activities. He distinguished the promotion of space investment with the promotion of foreign space investments, and with the promotion of sustainable space investments. 

Given the characteristics of space investments, Dr. Hasin explained that promoting foreign investments in space may not be consistent with the interests of space-capable home States of investors. Space-capable States may have little incentive to export their private space industry, especially with the added dimension of space-technology often being dual-use. Additionally, as space-capable States are interested in maintaining a sustainable space environment, they also have little incentive to allow investors to switch their operations to space “pollution havens”.

Dr. Hasin believed that while investment treaties can be interpreted to apply to outer space activities under the textual-based mode of approaching decisions, they should not be applied. In his view, the textual-based mode of decision analysis provides limited insight into the application and development of international norms, and that applying investment treaties may reinforce a regulatory race to the bottom. 

Ms. Zielinski asked Dr. Hasin whether the investment regime may be used to increase the potential liability of States and encourage more restrictive national authorisation requirements. Dr. Hasin responded that this relies on two questions: (1) whether it is in the interests of major space actors to extend investment protections to investors, promoting certain relocations, and (2) whether it is possible to develop norms through arbitration that promote common interests, and thus, whether in theory, the investment regime could promote limiting the authorisation of certain activities. 

Final Considerations on Space Arbitration to Protect Space Investments

Prof. Hobe answered a question from the audience, on what appropriation of property in outer space may look like. Prof. Hobe responded that because property in outer space and on Earth fall under fundamentally different regimes, it may be that something that is considered property in outer space will not be recognized as property on Earth.

In responding to a question from an audience member on whether investment arbitration is the right forum to shape policies in outer space, Dr. Deplano explained that the issue with arbitration shaping policy is not necessarily whether arbitrators decide to support certain interpretations provided by the parties in an arbitration, but that there is a risk that certain concerns of the international community will not feed into the arbitration process. While the arbitrators’ application of the law may not necessarily be based on the parties’ interests, the law must be applied in the context of the dispute. As Dr. Deplano explained, this means that under the presumption of legal actions mostly coming from powerful actors due to financial, economic, or technological reasons, policy development will probably be more sensitive to interests which only pertain to certain members of the international community. For example, sharing the benefit of outer space resources is an issue that concerns a large part of the international community, but is unlikely to be developed in international law through arbitration. Finally, Dr. Deplano opined that the role of scholars is to observe in a systematic way the normative development of the law via the traditional sources of international law (treaties, custom, and general principles of law) and State practice.

In response to the equivalent question on investment arbitration as a means to shape policy, Dr. Hasin expressed two concerns. Firstly, he distinguished between investment arbitration, which is public, and commercial arbitration, which is not. The concern he had was regarding the lack of transparency in commercial arbitration, combined with the knowledge that there will be repeat actors—parties that enter arbitrations on a repeated basis. There is a risk that norms promoted by certain institutions may shape the decisions of repeat actors, but that there is no public scrutiny the way there is for investment protection. Secondly, arbitrators in both investment and commercial arbitration are supposed to apply a textual mode of decision and are not supposed to consider systemic considerations. Thus, there is a risk that norms are being optimised for actors involved in arbitrations, especially since parties tend to propose interpretations of the law that promote their own objectives. Particularly in underdeveloped fields of law like space governance, there is a risk of creating norms that give significant preference to private interests. If arbitration were to be used to shape policy, Dr. Hasin highlighted that it would be important to modify our current view of arbitration and ensure that arbitrators are allowed and encouraged to consider public interests, rather than solely focussing on the direct parties involved.

To follow up on this, Mr. Maynard commented that he may not share the same concerns to the same extent as Dr. Deplano and Dr. Hasin. He explained that investment tribunals only consider the interpretation of a treaty within the framework of the dispute, to the extent necessary for deciding the dispute before them. He continued to remark that investment tribunals have done this previously in other areas of international law where they do not have jurisdiction (e.g., intra-EU disputes). Applied to outer space activities, Mr. Maynard did not imagine that any investor-State tribunal would presume to pronounce definitively on the interpretation of the OST or create precedence, and was thus less concerned about this issue than perhaps the other panellists were.

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Mining Space Resources: Where are we Now?

Mining space resources: where are we now? This post describes the space mining industry and the regulatory framework, and discusses arbitration of space mining disputes.

The Space Mining Industry

The development of the space resources industry is big—and increasingly bigger—business. Last year, Emergen Research predicted the space mining market will reach US$ 8.19 million by 2030 with a revenue CAGR of 23.5% between 2022 and 2030. According to renowned astrophysicist Neil deGrasse Tyson, “[t]he first trillionaire there’ll ever be is the person who mines asteroids for their natural resources”. The growth of the industry has garnered the attention of countries and companies. It is more prevalent in international discussions and national laws. There are hopes that the resources available in space will assist in addressing resource scarcity, one of the many ways that space may contribute to achieving the Sustainable Development Goals. According to the ESA’s Space Resources Strategy to 2030: 

The challenges and environments of space drive optimised technologies and systems with implications for sustainability and the Sustainable Development Goals and addressing the increasing challenge of resource scarcity.^.

Space mining is essentially the process of excavating, extracting, and/or recovering resources from space. The Hague International Space Resources Governance Working Group—a multistakeholder Working Group established in 2016 with the purpose to assess the need for a governance framework on space resources and to lay the groundwork for such framework —defines a “space resource” as “an extractable abiotic resource in situ in outer space” and “utilization of space resources” as “the recovery of space resources and the extraction of raw mineral or volatile materials therefrom”.

The moon is the immediate focus of several mining efforts and “likely the first location for commercial mining”, where sought-after resources include regolith and Helium-3. Amongst other things, lunar resources may be used as fuel for deep space exploration and exploitation. The longer-term focus is on mining asteroids. In 2021, scientists discovered two metal-rich near-Earth asteroids whose reserves of iron, nickel and cobalt could exceed the global reserves of these metals. Major space agencies have engaged in exploration missions that will contribute to mining efforts. For example, JAXA’s Hayabusa missions returned samples of space rock. They have also engaged private companies to contribute to efforts. For example, in 2020, NASA awarded contracts to four companies to extract small amounts of lunar regolith by 2024 and transfer ownership to the agency. 

Private efforts are also driving investment and innovation, although they face the challenge of the high costs associated with space mining and prospecting missions. Two United States (US) companies, Planetary Resources and Deep Space Industries, were established more than10 years ago with the aim of mining asteroids. They didn’t survive (in October 2018, Planetary Resources was acquired by ConsenSys, a blockchain technology company. Deep Space Industries was acquired in January 2019 by Bradford Space). The CEO and President of Planetary Resources noted in 2019 that: “[w]e haven’t figured out how to fund large-scale, long-duration, somewhat high-risk projects”. A new wave of companies that focus on elements of the mining journey are now the focus of significant investment. For example, in November 2021, the Los Angeles-based space company, Inversion, announced that it had obtained funding to develop an affordable means to return materials from space within the next three to five years. In May 2022, a new company, AstroForge, raised US$13 million in seed funding for its asteroid mining ambitions. Instead of bringing back the entire asteroid, AstroForge proposes breaking it up, refining, and returning to Earth only what’s valuable. While the first wave of companies has been termed “overambitious”, experts note that: “space mining has matured to the point where there are dozens of startup companies, even larger firms, addressing aspects of what’s called the space resources value chain”. At the same time, space mining is expensive, and thus entails risk for those investing in the sector. 

The Regulatory Framework

These developments are testing and propelling the regulatory framework—at the international and national level. And with the investments sums and the magnitude of rewards and risks at stake, there is a drive for more consensus and certainty. Several States passed domestic legislation concerning the rights of private entities to explore, exploit and utilize space resources, and, in turn, allowing the States to regulate and licence the operators.  These States include the US, Luxembourg, Japan and the United Arab Emirates (UAE). In addition, a 2020 US Executive Order encouraged the US to work towards building international support for the public and private recovery and use of space resources. It directed the US State Department to pursue a strategy of bilateral and multilateral agreements. In October 2020 NASA launched the Artemis Accords along with Australia, Canada, Italy, Japan, Luxembourg, the UAE, the United Kingdom and the US. The Artemis Accords are a set of principles for peaceful international cooperation in the exploration of space, including extracting space resources. At the time of writing (June 2023), there are 28 signatories to the Artemis Accords. These developments have raised questions around what international space law envisages, who “owns” the property rights in space and how benefits will be enjoyed. As the Luxembourg Space Agency explains regarding its 2017 Law on Space Resources: 

International space treaties remain untested regarding who would own the rights to minerals, gases and water found in outer space. Until now, this has not been an issue since most missions have been for scientific purposes. But for commercial space projects and space mining to be viable, future explorers and investors will need to be certain of their rights to extract, consume and commercialise the materials they discover.

The relevant international regulatory framework is based on the five outer space treaties, and, regarding the right to explore and exploit space resources, particularly the Outer Space Treaty and the Moon Treaty. The Outer Space Treaty, which has been ratified by over 100 countries, codifies a principle of non-appropriation. Article 2 states: “Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means”. The domestic laws passed in this arena state that they are in accordance with the Outer Space Agreement.   Luxembourg, for example, clarifies that its Law on Space Resources “does not have an objective, purpose or effect of paving the way for any national appropriation of outer space, including the Moon and other celestial bodies themselves. The law clarifies Luxembourg’s national position on the status of the resources that can be extracted from those celestial bodies and in space in general”. The Moon Agreement has only been ratified by 18 countries and signed by four. The Moon Agreement classifies the moon and its natural resources as the common heritage of mankind. It also states that neither the moon, its subsurface nor any natural resources that form part, shall become the property of a State, international organization or a person. The US, for example, has been explicit in its view that the Moon Agreement does not represent customary international law and so is of limited relevance to non-States Parties. Some parties to the Moon Agreement—for example, Australia and Mexico—are also parties to the Artemis Accords, suggesting that they do not see the cooperation envisaged under the Artemis Accords as straying from the principles codified in the Moon Agreement, including that moon resources are the common heritage of mankind. France and India, also signatories to the Artemis Accords, have signed, but not ratified, the Moon Agreement. Pursuant to the law of treaties, they are obliged to refrain from acts which would defeat the object and purpose of the Moon Agreement, until they have made clear their intention not to become a State Party to the treaty. In January 2023, Saudi Arabia—one of the 18 States parties to the Moon Agreement—announced its withdrawal from the treaty. The withdrawal will take effect in January 2024. It did not give reasons, but there is speculation that it could be linked to avoiding any potential conflict between the principles set out in the Moon Agreement and its adherence to the Artemis Accords and its future plans for space activities. These developments demonstrate the continuing discussions around the exact parameters of the international norms in space.  

During its 2022 session, the Legal Subcommittee of the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) created a Working Group on the Legal Aspects of Space Resource Activity and gave it a five-year mandate to gather information, study the current legal framework, and “assess the benefits of further development of a framework for such activities, including by way of additional international governance instruments”. There are multiple international legal questions implicated in space resource activity, including sustainability, information sharing and cooperation in scientific research and technological development, but any consensus framework will also cover who will benefit from the exploitation of space resources.  

Arbitration

Where does arbitration fit into this picture? There are few public arbitrations concerning the space industry and the topic has been well covered elsewhere including on this blog.  But, in brief:

Inter-State Arbitration: The dispute resolution provisions under the international space treaties are largely untested. So far, the only publicly known dispute raised under one of the space treaties occurred around 40 years ago between the USSR and Canada. The dispute was raised under the 1972 Liability Convention and concerned the disintegration of a Soviet space object, the Cosmos 954 satellite, in Canadian air space depositing hazardous radioactive debris on Canadian territory. The dispute was settled in 1981 pursuant to the USSR’s agreement to pay Canada 3 million Canadian dollars. The outer space treaties do not envisage binding inter-State arbitration, although States are, of course, free to agree to arbitrate their disputes if they wish. 

Investor-State Arbitration: A handful of investor-State disputes have been brought under investment treaties, concerning satellite lease contracts, the allocation and use of spectrum and satellite interference.  We may well see the greater use of investment treaties in relation to the space resources value chain, including because space mining, of course, implicates many questions frequently seen in investment-treaty arbitration, including the award and maintenance of concessions/licences and the supervisory role of States.   

Commercial Arbitration: In the constellation of developing technologies, materials, equipment, investment and regulation, there are a multiplicity of contracts. The space resources value chain will give rise to specialist disputes, as well as disputes about general commercial questions that we see in other industries based on contractual interpretation—supply, manufacturing, distribution, procurement, protection of IP, data and information sharing, insurance, etc. or a combination of the two. As an industry, the general trend has been to negotiate and find a solution to disputes. This is understandable in a growing industry that requires specific expertise, with huge investment at stake, but with a limited number of players with the relevant expertise and products. One mechanism that has been used to limit disputes in commercial contract is the cross-waiver of liability by which parties waive their rights to sue each other under a contract. But we already see signs that, as the industry grows, there will be more disputes submitted to independent dispute resolution. The potential benefits of arbitration for space disputes, including concerning space resources, have been set out in detail elsewhere, but they include confidentiality, the ability of parties to choose arbitrators with a specific expertise or approach, emergency arbitration provisions, the integration of a procedure to gather expert evidence and  relying on either party appointed or tribunal appointed experts, or both.  

Specific initiatives tailored to cater to the characteristics of space disputes emphazise some of these features. These include the DIFC’s Space Courts, established in 2021, as part of the DIFC’s Courts of the Future. They also include the Permanent Court of Arbitration’s 2011 Optional Rules for Arbitration of Disputes Relating to Outer Space Activities, which have already been covered in detail on this blog. Two examples of key innovations in these rules include: a panel of scientific and technical experts, as well as arbitrators with specific expertise, in case the parties need assistance to benefit from these features of arbitration.  The rules also empower the tribunal to request the parties to “submit a non-technical document summarizing and explaining the background to any scientific, technical or other specialized information which the arbitral tribunal considers to be necessary to understand fully the matters in dispute” (Article 27(4)). This assists the tribunal in deciding whether they need expert assistance and of what type. These initiatives have not yet (as far as is publicly known) been employed by players in the space industry. This may reflect that many of these disputes will also concern general commercial questions, although other reasons have been floated for the failure to employ the PCA Rules, in particular.    

While space-specific arbitration rules may not have been employed, the disputes submitted to arbitration under generic arbitration rules, for example, the ICC Rules, demonstrate the potential utility of arbitration as a dispute settlement tool. Already in 2004, commentators were reporting that the ICC was a popular destination for disputes related to space activities (Ravillon, Laurence (2004) Space Law and Mechanisms for Dispute Settlement. ECSL News, No. 28 (December 2004), 2-3 (p. 2)). The ESA Convention, Annex 1, provides that “[w]hen concluding written contracts, other than those concluded in accordance with the Staff Regulations, the Agency shall provide for arbitration”. 

It is certainly an industry and value chain to watch—at the international, transnational and domestic level—and, especially given the potential rewards and sensitivities involved, we are likely to see a growing appetite for the use of arbitration.

For further information on space mining disputes and space mining arbitration, please see this post by Laura Yvonne Zielinski. 

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Space Arbitration at Paris Arbitration Week

In this post, Luca Erhart reports on a panel discussion at Paris Arbitration Week 2022 organized by the Space Arbitration Association and Holland & Knight. 

On 29 March 2022, Holland & Knight and the Space Arbitration Association hosted a virtual panel discussion on “Space Arbitration: Disputes Over Satellites and More”, as part of the 2022 Paris Arbitration Week. The panel was moderated by Allison Torline (Counsel, Busse Disputes) and featured Dr. Jan Frohloff (Independent Practitioner), Laura Yvonne Zielinski (Holland & Knight), and Eden Jardine (Lalive). 

Contractual Disputes Related to Outer Space

The discussion kicked off with the first speaker, Dr. Jan Frohloff, who provided an overview of commercial, contractual disputes related to outer space activities. He noted that such disputes do not – at this point – concern activities or settlements on the Moon or other celestial bodies. Rather, they are largely about traditional commercial space activities, such as satellites for telecommunications and earth observation. Contracts related to such activities usually cover the entire lifecycle of the satellites: from the sale-purchase of the satellites to their launch and subsequent operation. As a result, an arbitration is usually related to one of those three phases. 

Dr. Jan Frohloff noted that these space contracts present three unique features. Firstly, they present counterintuitive contractual features, in particular in relation to the burden of risk. The space industry operates in a harsh environment with little room for error, and it is only rarely possible to remedy a deficient performance. A key issue thus becomes the determination of who bears the burden of risk. It is not uncommon for launch service agreements to include a clause which determines that the launcher fulfils his obligations with the launch of the launch vehicle. For this purpose, launch is very often defined as “intentional first stage engine ignition and lift off”. Hence, even if the rocket explodes only 10 seconds later, the launcher will have fulfilled his obligations. The risk that something goes wrong is thus usually the customer’s, who will have to decide whether to take that risk or to take up an insurance. By contrast, a less counterintuitive and common feature of space contracts is confidentiality. The space industry is secretive, and hence there is usually little to no information available on space arbitrations. 

The second unique feature of space contracts (and the resulting arbitration) that Dr. Jan Frohloff pointed out were the politics involved. This is the result of the dual use to which satellites can be put (“dual-use goods”). Satellites are valuable commercial and strategic, military assets. As a result, space agencies of the State remain powerful players. Very often, although there is a commercial contract in place, a private party will effectively be dealing with the State (or its agencies). If that State decides the terms of the contract, chances of obtaining specific performance are low. According to Dr. Jan Frohloff, one recent example of the impact of politics on space activities is the refusal of ROSCOSMOS to launch a batch of satellites of the satellite operator OneWeb. The next batch of satellites was meant to launch in March 2022, a few days after the start of the Russia-Ukraine war. ROSCOSMOS communicated that the launch could only take place if OneWeb guaranteed that the satellites would not be put to military use and that the UK government divest its stake. No agreement has been reached and no satellites have been launched as a result. 

The final unique feature Dr. Jan Frohloff highlighted were the legal issues beyond the realm of contracts. Space contracts are often subject to public law requirements. For example, to manufacture or sell satellites you need an export control permit, whereas to operate a satellite you need clearance from a regulator to place it in a certain orbit and use certain frequencies.

Dr. Jan Frohloff thus concluded that, although still confined to activities on Earth or in orbits surrounding it, commercial space arbitration does present unique features that distinguishes it from arbitration in other commercial sectors. Allison Torline then asked whether the applicable substantive law is also an issue for space arbitration, to which he responded that it is not because the contract will normally determine it. It can however become an issue where there is no contract prior to the dispute, and it is also relevant to the applicable public law requirements. Being asked about the Permanent Court of Arbitration’s Outer Space Arbitration Rules, he explained that those are meant to fill a gap of dispute resolution in international space law. Dr. Jan Frohloff added that the Rules were drafted with States in mind, and that there had not been any cases under the Rules yet – although there was confidence that they would eventually arise. 

Disputes Arising from Satellite Collisions

The discussion then moved from contract to tort, with Laura Zielinski talking about disputes arising from satellite collisions. She started with recent developments in outer space activities, noting the large number of new satellites being launched. In 2010, there were around 950 operational satellites, in 2020 there were around 3.400, and in 2030 the number is predicted to be almost 100.000: a result of the planned launches of satellite constellations. This brings exciting possibilities (e.g., wildfire detections and global broadband coverage) but also poses unique challenges. Thus, she pointed out that the number of satellites being launched will congest the lower earth orbit and increases the risk of collisions – not only with active satellites but also with small pieces of space debris (= pieces of defunct satellites). Even without an actual collision this is already causing harm to space operators, who see a decrease in their satellites’ lifetime and revenues every time they move them because of the consumption of fuel from such a manoeuvre. 

Laura Zielinski then turned to the substantive rules to address disputes from satellite collisions, noting that such rules are effectively non-existent. This is because at the time the Space Treaties were drafted and agreed to this was not a foreseeable problem. However, there are non-binding guidelines on Space Debris Mitigation and key stakeholders of the space industry are undertaking significant efforts to enact Space Traffic Management Rules. Moreover, the 1972 Liability Convention deals with the issue, attributing liability for harm caused by space objects. But it focuses exclusively on States and is thus not applicable to private space operators. 

As for dispute resolution mechanisms, she noted that the 1972 Liability Convention creates the “Claims Commission”, a quasi-arbitral body, which is available to States – private operators would have to ask for diplomatic protection by their home States. She pointed out that there are alternatives, although many of them with flaws. Firstly, one possibility would be to turn to domestic courts. However, those face the issue of not having harmonized rules to apply, and applicants could face additional hurdles, such as immunities. Secondly, there is investment arbitration, which is however only available where the host State is the one causing the damage. This is difficult to prove in outer space, where many pieces of space debris are not trackable. 

Laura Zielinski also highlighted two potential mechanisms that are not currently in place but could be used to resolve future disputes. Firstly, national States could include consent to arbitration as a requirement for providing launching licenses. Any space object launched would then be subject to an arbitration clause, so that in case of a collision there would be prior consent. Secondly, there is the possibility foreseen by Dr. Karl-Heinz Bockstiegel, who proposed a Draft Convention closely mirroring the Convention on the Law of the Sea. This Convention would then provide access for private parties to international arbitration as default mechanism for the settlement of disputes. The Draft Convention has however never gained sufficient political support.

Allison Torline followed up on the comments on the applicability of investment arbitration in outer space, Laura Zielinski explaining that there have so far not been any cases related to space collisions or avoidance manoeuvres. But there have been more conventional treaty cases, such as Devas v India and Deutsche Telekom v India, which arose out of India’s revocation of leased S-Band frequency rights.

Disputes Over Property Rights in Outer Space

To finish the panel discussion on space arbitration, Eden Jardine talked about the third and final kind of (future) outer space disputes, surrounding property rights in outer space as a result of space mining (= the exploration of minerals and resources in outer space). She explained that such disputes could be both contractual and non-contractual in nature. Contractual disputes could arise from sale and purchase, license, share-hold or other agreements, whereas non-contractual disputes usually relate to property or ownership disputes. 

Eden Jardine highlighted that there exists controversy regarding the (interpretation of the) legal framework of space mining. Thus, on the one hand, the 1967 Outer Space Treaty appears to designate outer space as a public property, subject to the non-appropriation principle contained in article 2. The Moon Agreement (not widely ratified) also refers to the equitable sharing of lunar resources. On the other hand, at the domestic level, the United States have passed an Act in 2015 which enables citizens to obtain their own asteroids, mine them and keep what they find. Other countries have adopted similar legislation (see e.g., Luxembourg, 2017; or Japan, 2021). Moreover, there are the Artemis Accords, a non-binding international agreement, which similarly supports the private exploitation of outer space resources and minerals.

Eden Jardine then turned to the intersection between space mining and international arbitration, in particular, to the question of why arbitration may be appropriate to resolve disputes in this area. Amongst the reasons she identified were that these disputes were likely to be similar to mining disputes on Earth and will likely involve cross-border (international companies, assets, and projects), multi-parties and/or multi-contractual elements. They will similarly need arbitrators with industry-specific knowledge and there will be the need for global enforcement. Moving on, how can the arbitration community prepare to service space mining disputes? Eden Jardine identified three ways: (1) increasing knowledge of space law, mining, and arbitration law of relevant stakeholders; (2) holding consultations with interested stakeholders (such as, miners or technology/space companies); and (3) establishing an international space arbitration court. As for the last suggestion, she noted that the internal structure of this court could be divided into a general chamber that deals with all commercial issues and specialized chamber that deal only with certain issues (investments, space debris, etc.) to cater specific needs.

Allison Torline then asked her about whether she believed the current legislative framework to be adequate to which Eden Jardine repeated that there exist (or, at least, many think there exist) inconsistencies between international and domestic laws on space mining. In her view there exists the need for an international law reform to ensure that all countries are on an even playing field. To the follow-up question of how the international community could fill the gaps in the current legislative framework, Eden Jardine opined that this could be done by establishing a binding, uniform outer space mining treaty/law. To achieve this, one can draw on existing investment treaties as well as the New York Convention, which should guide the reforming process.

For those interested in space mining disputes, the Space Arbitration Association has recently published a post on this topic here. 

The ITU, Space Sustainability, New Conventions and Liability

Towards the end of this session on Space Arbitration at Paris Arbitration Week, Allison Torline raised several selected questions that had been brought up by members of the public throughout the event. Firstly, on whether the International Telecommunications Union was involved with the allocation of frequencies and bandwidth in outer space, Dr. Jan Frohloff commented that it is involved although States act as intermediaries: frequency bands and geostationary orbit slots are assigned by the ITU to States, who can then allocate them to private companies according to their national regulations. Secondly, Laura Zielinski was asked about how space safety/sustainability is best regulated. She thought that this is best done via the UN COPUOS Legal Committee. Another solution would be through domestic laws, but the issue is best dealt with at the international level.  

The panelists were then asked to predict whether a new international convention regulating activities and disputes will be negotiated soon. Dr. Jan Frohloff noted that with the current geo-political situation this is unlikely. Instead, he thought that there would be many more developments in mining, space activities and disputes before such a convention is created. Laura Zielinski also noted that the 1967 Outer Space Treaty is also not completely obsolete, containing many general principles that are still useful today. And Eden Jardine added, such principles can then be elaborated upon by non-binding agreements, such as the Artemis Accords, which can eventually attain binding status. Finally, to the question of where liability stands in today’s real cases, Laura Zielinski explained that the Liability Convention has two different liability regimes: (1) absolute liability for damage caused by space objects on earth (where little exoneration is possible); and (2) fault-based liability for damage in outer space. Non-binding instruments, such as debris mitigation guidelines, might inform the notion of fault. 

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Space Mining Disputes on the Horizon?

Space Mining Disputes on the horizon? This post addresses the prospects of space mining, the law governing commercial mining activities and the risk of space mining disputes.

Japan Authorizes Space Mining Operation on the Moon

In November 2022, the Japanese Government authorized the private company iSpace to conduct commercial activities on the moon, including the extraction of regolith and its subsequent sale for profit to the United States’ National Aeronautics and Space Administration (NASA). This licence obtained by iSpace is the first licence to extract and sell space resources granted under Japan’s Act on the Promotion of Business Activities for the Exploration and Development of Space Resources (‘Japan’s Space Resources Act’), and the first case of commercial space resource utilization.

Domestic Laws on Commercial Space Mining

Japan’s Space Resources Act, like similar laws in the US (the Commercial Space Launch Competitiveness Act of 2015), Luxembourg (Law on the Exploration and Use of Space Resources of 2017) and the United Arab Emirates (Federal Law No 12 of 2019 on the Regulation of the Space Sector), provides for private property rights over space resources in the context of incentivising commercial space mining. More specifically, Japan’s Space Resources Act provides that Japanese private business operators shall be permitted to engage in the exploration and development of space resources, such as water, minerals and other non-living resources in outer space, on the moon and other celestial bodies. Luxembourg’s 2017 Law states clearly that ‘space resources are capable of being appropriated’. In turn, the US Commercial Space Competitiveness Act of 2015 ‘promotes the right of United States citizens to engage in commercial exploration for and commercial recovery of space resources free from harmful interference […]’. It further states that ‘a United States citizen engaged in commercial recovery of an asteroid resource or a space resource under this chapter shall be entitled to any asteroid resource or space resource obtained, including to possess, own, transport, use and sell the asteroid resource, or space resource obtained […]’. According to Title 50902, the US limits its authorisation to US natural and legal citizens, and entities organised or existing under the laws of a foreign country if the controlling interest is held by a natural or legal US citizen. Luxembourg only requires registration (Article 4).

The Artemis Accords

Moreover, the iSpace transaction will take place within the overall framework of the Artemis Accords. The Artemis Accords, originally signed on 13 October 2020 by eight states – namely, Australia, Canada, Italy, Japan, Luxembourg, the UAE, the UK, and the US – contains a set of 13 provisions aimed at facilitating international collaboration in space exploration. Signing the Artemis Accords is a requirement to collaborate with NASA on its wider Artemis Program planning for the next human to go to the Moon by 2024, as well as human exploration of Mars in the future. By signing the Artemis Accords, states agree to collaborate with NASA on the basis of the principles they contain, including the possibility of granting property rights over space resources and the creation of safety zones that allow operations free from interference from other states. By December 2022, they had been signed by 23 states: Australia, Bahrain, Brazil, Canada, Colombia, France, Israel, Italy, Japan, Luxembourg, Mexico, New Zealand, Nigeria, Poland, the Republic of Korea, Romania, Rwanda, Saudi Arabia, Singapore, Ukraine, the United Arab Emirates, the United Kingdom and the US. On the topic of space resources, ‘the Signatories note that the utilization of space resources can benefit humankind by providing critical support for safe and sustainable operations.’ (Section 10(1)).

Disclaimer on Compliance with International Law

The Artemis Accords are clear in that they view their principles of collaboration as compliant with international space law. Section 10(2) on Space Resources emphasises ‘that the extraction and utilization of space resources, including any recovery from the surface or subsurface of the Moon, Mars, comets or asteroids, should be executed in a manner that complies with the Outer Space Treaty and in support of safe and sustainable space activities.’ Similarly, the US Commercial Space Launch Competitiveness of 2015 makes clear that it only applies to space resources ‘obtained in accordance with applicable law, including the international obligations of the United States’, and Luxembourg’s Law on the Exploration and Use of Space Resources states that ‘the authorized operator may only carry out the activity referred to in paragraph 1 in accordance with the conditions of the authorization and the international obligations of Luxembourg’.

The Non-Appropriation Principle Under International Space Law

Despite these affirmations that commercial space mining operations and private property rights of space resources are in compliance with international space law, this view is not uncontroversial. The 1967 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and other Celestial Bodies (the Outer Space Treaty), in its Article II provides that ‘outer space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means’. At first view, this principle seems to exclude any private property rights in outer space and consequently, any domestic laws pretending the contrary would be in violation of international space law. Article II of the Outer Space Treaty is not only binding on its member states, but is generally accepted to form part of customary international law, being thus binding on all countries. In any event, all four countries mentioned above, allowing for private property of space resources under their national laws have ratified the Outer Space Treaty and, therefore, are bound by Article II. The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (the Moon Agreement), is binding of the signatory states of the Artemis Accords only on Australia, Mexico and Saudi Arabia (even through Saudi Arabia has recently withdrawn from the Moon Agreement with the withdrawal taking effect in January 2024), but it nonetheless informative. The Moon Agreement again states in its Article 11 that ‘the Moon is not subject to national appropriation by any claim of sovereignty, by means of use or occupation, or by any other means’.

Commercial Space Mining and the Non-Appropriation Principle

Those States allowing for the extraction and commercialization of space resources make clear that they view this activity as an authorized ‘use’ of outer space under Article I of the Outer Space Treaty, and not as national appropriation of outer space in violation of Article II of the Outer Space Treaty. Section 10(2) of the Artemis Accords on Space Resources affirms ‘that the extraction of space resources does not inherently constitute national appropriation under Article II of the Outer Space Treaty, and that contracts and other legal instruments relating to space resources should be consistent with that Treaty’. The US Space Launch Competitiveness Act states that ‘by the enactment of this Act, the United States does not thereby assert sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body’. If generally accepted as non-violatory of international space law, the view expressed in the four domestic space laws mentioned above, as well as in the Artemis Accords, could be seen as subsequent practice of the Outer Space Treaty further informing its content and interpretation and, ultimately, customary international law on private resource extraction in outer space. In view of objections for example from China and Russia and other critical voices, this is, however, less than assured. For a detailed discussion of this topic that goes beyond the scope of this contribution, please see Dr Rossana Deplano’s article ‘The Artemis Accords: Evolution or Revolution in International Space Law?’, published online by the Cambridge University Press on 15 June 2021.

Space Mining Disputes on the Horizon?

For practical purposes, it remains to be seen whether other States will recognize a title to space resources based only on domestic law. If not, with commercial space mining increasingly becoming a reality, we can expect to see this issue being litigated in the near future. While this debate could well give rise to state-state litigation or arbitration, private space mining operators are well advised to include arbitration clauses into their space mining contracts to ensure access to a neutral and efficient dispute settlement mechanism for any disputes over their property rights or other questions they might face relating to their outer space operations.

This article first appeared on the website of the Space Law Committee of the Legal Practice Division of the International Bar Association, and is reproduced by kind permission of the International Bar Association, London, UK. © International Bar Association.

For those interested to explore this topic further, the Space Arbitration Association held a panel discussion on “Can Space Arbitration Protect Space Investments?” on Thursday, 10 February 2022. You can view the panel discussion online here. 

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