The 21st century has witnessed a dramatic transformation in humanity’s relationship with outer space. Once the exclusive domain of superpower governments, space is now a bustling arena of commercial, scientific, and military activity. The growing number of satellites and the increasing threat of space debris pose risks to operational satellites, such as those for GPS and climate monitoring, raise the possibility of collision cascades (the Kessler Syndrome[1]) that could render low-Earth orbit unusable for centuries.
These challenges also threaten future space exploration and infrastructure development. This ever-increasing problem is driven by the expansion of large satellite constellations and the slow pace of debris mitigation, despite the existence of international guidelines. Then there is the spectre of militarisation which has made the governance of outer space more urgent and complex than ever before. As the number of actors and activities in space grows, so too does the need for robust legal frameworks and effective dispute resolution mechanisms.
Simon Tolson’s article explores the evolving landscape of space law, the growing need for effective dispute resolution, and the United Kingdom’s emerging role as a leader in space governance and arbitration.
The Historical Development of Space Law
The early days: international cooperation and the Outer Space Treaty
Since the dawn of the space age on 4 October 1957, when the then-USSR’s Sputnik became the first artificial satellite to orbit the Earth, outer space has been a place of international cooperation. Even before the first human set foot on the Moon, the United Nations recognised the need for rules governing space activities. The result was a suite of public international law treaties, the most important of which are the 1967 Outer Space Treaty (“OST”)[2] and the 1972 Liability Convention (“LC”)[3]. These treaties are often referred to as the “constitution of space”, providing the foundational principles for the exploration and use of outer space.
The OST, sometimes called the “Magna Carta” of outer space, enshrines several key principles. Article I states that the “exploration and use of outer space… shall be carried out for the benefit and in the interests of all countries, irrespective of their degree of economic or scientific development, and shall be the province of all mankind”. It further stipulates that space “shall be free for exploration and use by all States without discrimination of any kind, on the basis of equality and in accordance with international law, and there shall be free access to all areas of celestial bodies”. Article II prohibits national appropriation of outer space, making clear that no part of space can be claimed as sovereign territory.
One of the still hotly debated topics in international law is the exact definition and delimitation of space. As there is no agreed-upon international definition. Instead, UK legislation, such as the Space Industry Act 2018, focuses on regulating space activities based on the capabilities and trajectories of spacecraft, using terms like “sub-orbital” and “space object” to determine regulatory scope.
Old Space vs. New Space
The legal framework for space was developed in an era when only a handful of nations could access space, and all activities were conducted by government space programs such as NASA and Roscosmos.[4] This “Old Space” era, spanning from the 1950s to the early 2000s, saw private companies working with national programs but not independently accessing space.
The landscape has since shifted dramatically. Today, private launch companies undertake a variety of independent commercial space activities, including providing launch services to both government and private actors. This “New Space” economy is worth an estimated US$613 billion as of mid-2025, with about 75% of this revenue generated by the satellite industry for goods and services produced in space for use on Earth. The potential for resource extraction in space is even more staggering – asteroids and the Moon contain vast reserves of precious metals – with some estimates running into the thousands of quadrillions of dollars.
The evolving space environment: the proliferation of space objects
The number of objects in orbit has increased exponentially, driven by both established and new launch providers. As of 2025, there are over 11,700 satellites in various orbits,[5] both active and inactive (c. 3,500 defunct), and tens of thousands of pieces of debris. The increase in launch capacity has led to bottlenecks and congestion in certain orbits, raising the risk of collisions (conjunctions) and interference. Conjunction risk refers to the probability that two objects in space will collide, which is particularly relevant for spacecraft and satellites in orbit.
Space debris: a growing threat
Space debris, as defined by the Inter-Agency Space Debris Coordination Committee (“IADC”), includes all human-made objects in Earth’s orbit or re-entering the atmosphere that are non-functional. The challenge is compounded by the fact that while space is vast, areas of activity are highly concentrated and objects move at tremendous speeds. Low Earth Orbit (“LEO”) satellites, like the International Space Station (“ISS”), move at approximately 28,000 km/h (17,500 mph), while geostationary satellites are much higher and move slower, around 11,000 km/h (7,000 mph). Tracking and predicting the future positions of these objects is feasible, but continuous observation is difficult.
Efforts to manage space debris fall into two categories: mitigation and removal – and what is called active space debris removal (“ADR”). Mitigation strategies include designing satellites to withstand impacts, adopting operational procedures to minimise debris creation, and ensuring proper end-of-life disposal. Active debris removal, though technologically challenging and expensive, is increasingly seen as essential to maintaining the long-term sustainability of space activities. At the time of writing, the ISS – all 109 metres and 420 tonnes of it – is scheduled to be taken out of service by the end of 2030, with a controlled deorbit planned for January 2031, something that will only just fit in Wembley Stadium.
Legal aspects of space debris
The 1972 Liability Convention creates two branches of liability: absolute liability for damage on Earth or to aircraft[6] and fault-based liability for on-orbit damage. However, there is no binding requirement for states to ensure mitigation or active debris removal, though states can enforce compliance through licensing. Regulators must consider debris mitigation when licensing new missions, especially for large constellations that increase collision risks. Technologies for space debris mitigation, such as passivation and deorbiting, are highlighted as essential measures. Passivation is the process of removing or disabling all potential sources of energy, like propellant or batteries, from a spacecraft to prevent explosions or fragmentation that could create dangerous space debris. Deorbiting is the process of lowering a spacecraft’s orbit and causing it to re-enter Earth’s atmosphere, where it burns up or lands safely, removing it from orbit entirely.
Legal frameworks for space activities: the pyramid of space governance
Space governance operates on a pyramid structure, with domestic regulations at the base, international treaty obligations in the middle, and non-binding mechanisms at the top. The OST remains central to international space law, emphasising free access to space, non-appropriation, and the responsibility of states for their activities. The LC further clarifies that states are absolutely liable for damage caused by their space objects on Earth and are fault-liable for damage in orbit.
Other important UN treaties include the Rescue Agreement (1968),[7] the Registration Convention (1975),[8] and the Moon Agreement (1984).[9] The latter expands on the OST, specifically regarding the Moon and other celestial bodies, but it is the least successful treaty and has not been signed by any of the major spacefaring nations, including the United Kingdom, the United States, the Russian Federation or China.
The limitations of current treaties
Despite these foundational principles, the existing legal framework has notable gaps. The treaties were drafted in an era when only states could access space, and they do not adequately address the realities of private-sector involvement. For example, only states and intergovernmental organisations can access the dispute resolution mechanisms in the treaties, leaving private actors and third parties with limited recourse in the event of a dispute or damage.
Dispute resolution in space law: the rise of arbitration
As commercial activity in space accelerates, so does the potential for disputes – between private companies, between states, and between states and private actors. Arbitration has emerged as a preferred mechanism for resolving such disputes, offering flexibility, confidentiality, and enforceability. Parties can agree on the composition of the tribunal, the seat of arbitration, and the procedural rules, making it well-suited to the international and technical nature of space activities.
There is a negligible amount of publicly available data on the exact number of space law arbitration disputes in the UK. There are also very few reported space law arbitration disputes worldwide, with one study from 2024 finding 38 space-related cases,[10] a significant portion of which were commercial.
The Permanent Court of Arbitration (“PCA”) in 2011 published its Optional Rules for Arbitration of Disputes Relating to Outer Space Activities[11] (the “PCA Space Rules”) designed specifically to provide a voluntary and binding dispute resolution mechanism for the space sector. However, uptake of the PCA Space Rules has been limited, and there have been no reported arbitrations in accordance with these rules. Nevertheless, arbitration provides for an enforceable award pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Challenges for third parties
The commercial space industry, particularly in the satellite market, has been slow to mitigate potential third-party losses from possible satellite collisions. With over 9,000 satellites in orbit, incidents between parties with no contractual relationship are increasingly inevitable. Existing international space law is not equipped to deal with this effectively, as there is no dispute resolution mechanism and thus no realistic remedy for a damaged third party – either against a private party or a state responsible.
Currently, the dispute resolution mechanisms available for third-party space claims must be pursued through diplomatic channels, requiring a willing state to act on behalf of the damaged third party. The LC stipulates that a launching state “shall be absolutely liable to pay compensation for damage caused by its space object on the surface of the earth or to aircraft in flight”. Fault-based liability arises for proven damage caused by a space object of a launching state “elsewhere than on the surface of the earth” to a third-party space object, person(s), or property. The process for establishing a claims commission is complex and burdensome, and it has not been used often, demonstrating that it is no longer fit for purpose in the New Space economy.
The need for reform
The lack of an effective third-party dispute resolution mechanism could be remedied if the damaged party were able to access a pre-agreed, specific and independent dispute resolution process. One proposal is for states, through their internal launch licensing processes, to require applicants to adopt a pre-established arbitration protocol to deal with disputes. However, this could lead to inconsistencies in application and accessibility, with damaged third parties having no assurance of receiving uniform treatment. An agreed international convention would be more effective and likely to deliver consistent results, but given the current geopolitical climate, it is unlikely that a consensus on a binding treaty could be reached.
The UK’s approach to space law and arbitration: the UK space law framework
The UK’s international space obligations arise from the five principal UN treaties it has ratified, with the OST and LC being the most significant. At the national level, the Space Industry Act 2018 (“SIA”) created the high-level framework to enable launches from the UK. Prior to the SIA, space activities carried out in the UK or by UK entities overseas were governed by the Outer Space Act 1986 (“OSA”). Consistent with its international treaty obligations, the UK is responsible for the activities of its nationals and requires such entities to obtain a licence before they can procure a launch or operate a satellite. The applicable regulation now depends on whether the space activity is to be carried out from UK soil or not, with overseas activities governed by the OSA and domestic activities by the SIA.
The SIA sets out a high-level enabling framework for commercial spaceflight operations, regulating activities carried out in the UK, including launch and return, the procurement of a UK launch, the operation of a satellite in orbit, the operation of a spaceport, and the provision of range control services. The UK Space Agency plays a major role in delivering the government’s National Space Strategy, and the UK’s membership of the European Space Agency (“ESA”) was not affected by Brexit, as the ESA is not an EU organisation.
In July 2021, the UK Civil Aviation Authority (“CAA”) was given new powers as the UK’s space regulator,[12] with responsibility for issuing UK space licences. The licensing process requires applicants to provide a detailed assessment of safety and security considerations, including a comprehensive safety case, an environmental assessment, financial resources, and security and cyber risk mitigation.
The role of arbitration in space law
As the space sector evolves from a state-dominated arena to a dynamic, commercially driven industry, the need for effective dispute resolution mechanisms has become increasingly urgent. Arbitration has emerged as a central tool in addressing the unique challenges of space law, filling critical gaps left by traditional treaty-based frameworks.
Professor Christopher Newman is a leading expert and professor in Space Law and Policy at Northumbria University, where he teaches and conducts research on space governance. He is involved in Northumbria’s Space Law LLM course and explores topics like space law, ethics, long-duration spaceflight, and space situational awareness.
See too Joanne Wheeler MBE[13] and her links to the University of Leicester, which has put together an excellent professional training course covering the entire space mission lifecycle, including regulatory, spectrum, commercial and legal issues. The course is financially supported by the UK Space Agency.
Why arbitration is needed
The foundational treaties of space law, such as the OST and the LC, were crafted in an era when only states and intergovernmental organisations operated in space. These treaties provide for state-to-state dispute resolution but do not offer direct remedies for private parties or third parties affected by space activities. As private companies now launch, operate and manage satellites and other space assets, disputes increasingly arise between commercial actors or between private entities and states. The existing treaty mechanisms are ill-suited to resolve these modern, often highly technical and cross-border disputes efficiently.
Advantages of arbitration in space law
Arbitration offers several advantages that make it particularly well suited for space law disputes:
- Flexibility and Party Autonomy: Parties can select arbitrators with relevant technical expertise, agree on procedural rules and choose the seat of arbitration. This flexibility is crucial for disputes involving complex technology and multinational interests.
- Confidentiality: Arbitration proceedings are generally private, protecting sensitive commercial information and proprietary technology from public disclosure.
- Enforceability: Arbitral awards are recognised and enforceable in 172 countries under the New York Convention, providing a practical solution for international disputes.
- Technical Suitability: National courts may lack the expertise or neutrality required for space-related disputes, whereas arbitration allows for the appointment of specialists familiar with the sector’s complexities.
Arbitration in practice
Many intergovernmental organisations in the space sector, such as the International Telecommunications Satellite Organisation and the European Telecommunications Satellite Organisation, have adopted arbitration as their preferred or mandatory dispute resolution mechanism. Commercial contracts between private parties, and between states and private investors, frequently include arbitration clauses. Investment treaty arbitration is also available to private investors with claims against states.
Like the PCA Space Rules, leading arbitral institutions such as the London Court of International Arbitration (“LCIA”) are also equipped to handle space disputes, offering rules that address expedition, virtual hearings, consolidation, and data protection.
Gaps and challenges
Despite its advantages, arbitration in space law faces several challenges:
- Third-Party Claims: The current regime does not provide a direct remedy for third parties (such as those suffering damage from satellite collisions without a contractual link). These parties must rely on diplomatic channels, which are slow and uncertain. Proposals exist for states to require arbitration protocols in licensing, but this could lead to inconsistent application. A uniform international convention would be more effective, but it is unlikely in the current geopolitical climate.
- Arbitrability and Remedies: While most commercial disputes are arbitrable, tribunals may be limited in the remedies they can award. Some matters, such as those involving public policy or criminal issues, may not be suitable for arbitration. Nonetheless, emergency and interim relief are available, and confidentiality is generally respected.
The UK as a forum for space arbitration
The United Kingdom is well positioned as a forum for space arbitration, as are construction specialist arbitrators with space law experience. They bring expertise in managing complex, technical disputes and specialised procedures, which mirrors the challenges of space law. Their deep knowledge of engineering, modular construction, hold-point control, technical processes, and risk management (including safety cases) provides a critical advantage for space-related cases, where highly specialised technical expertise is essential for understanding issues like satellite operations and space debris.
The UK legal framework, anchored by the Arbitration Act 1996 (as amended by the 2025 Act), emphasises fairness, party autonomy and limited court intervention. The LCIA is a leading arbitral institution, and the UK’s status as a signatory to the New York Convention ensures that awards are widely enforceable. The UK’s regulatory regime for space activities (the Space Industry Act 2018 and the Outer Space Act 1986) and its established legal infrastructure make it an attractive seat for space-related arbitration.
Arbitration is increasingly recognised as the most suitable mechanism for resolving the diverse and complex disputes arising in the modern space sector. It offers flexibility, enforceability, confidentiality, and technical expertise, addressing the limitations of traditional treaty-based mechanisms. However, further work is needed to ensure uniform access to arbitration for third parties and to develop international consensus on binding dispute resolution protocols for space activities. As the space sector continues to grow, arbitration will play a vital role in supporting its legal and commercial stability.
Security, militarisation, and geopolitics: the increasing militarisation of space
The peaceful use of space is increasingly threatened by geopolitical tensions and the militarisation of orbits. In recent years, Washington and Moscow have traded increasingly sharp accusations of “militarising” outer space. After Russia shot down one of its own satellites in a 2021 test that created a massive debris field, Washington condemned the move as “dangerous and irresponsible behaviour”.[14] In early 2024, panic flared in the U.S. over reports that Moscow was preparing to deploy nuclear weapons in orbit – something Russia denied. The U.S. continues to warn that Russia is testing new military capabilities in orbit, and both Russia and China have tested anti-satellite weapons.
The UK, like many nations, is grappling with the dual challenge of defending its space assets and promoting responsible behaviour in orbit. The UK’s 10-year industrial strategy, issued in June 2025,[15] identifies space as one of six “frontier industries” set to shape the future of manufacturing in the UK. The strategy’s ambitious space-related goals include becoming a leading industrialised European exporter by 2030, increasing revenue generation, and enhancing supply chain resilience to support national security and defence. The sector plan acknowledges that regulatory reform will be key to enabling UK businesses to design, build, launch, and operate their satellites under one modern industrial regulatory environment.
The UK’s military and industrial strategy
The UK is heavily reliant on the United States for the maintenance of its radar and missile defence systems. The UK government has promised to invest more in both space and missile defence and is taking steps to protect its satellites, including testing sensors to detect laser threats in space. Both China and Russia have developed lasers that could be used to dazzle and disrupt an adversary’s satellites. The UK currently spends about 1% of its defence budget on space, compared with France’s 3% and the US’s 5%. Around £450 billion of the UK economy is dependent on space, which now forms the nervous system on which the UK’s armed forces increasingly depend – from navigation to precision strikes.
Conclusion
The rapid expansion of space activities has outpaced the legal frameworks designed to govern them. While the foundational treaties remain vital, they must be supplemented by modern, binding, and uniform mechanisms for dispute resolution – especially as private actors play an ever-larger role. Arbitration offers a promising path forward, but only if it is accessible to all parties and supported by robust national and international institutions.
The Society of Construction Arbitrators is currently forming a Space Law working group to create a small cluster of arbitrators with knowledge in the field, the writer being part of it.
The United Kingdom’s proactive approach to regulation and arbitration positions it as a leader in the new era of space governance. As the final frontier becomes ever more crowded and contested, the need for clear rules, effective enforcement, and international cooperation has never been greater. The future of space law will depend on our ability to adapt, innovate and work together to ensure that space remains a domain of opportunity, security and shared benefit for all.
[1] Proposed by NASA’s Donald Kessler in 1978, this syndrome describes a theoretical chain reaction in orbit where increasing space debris from collisions creates even more debris, ultimately resulting in a “point of no return” where the space environment becomes unusable.
[2] Formally, 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”.
[3] Formally, the “Convention on International Liability for Damage Caused by Space Objects”.
[4] The State Corporation for Space Activities, commonly known as “Roscosmos” is a state corporation of the Russian Federation, responsible for Russia’s space program, including space flights, human spaceflight, and aerospace research.
[5] The majority of active satellites belong to the United States and the Starlink mega-constellation.
[6] Meaning that a launching state must compensate victims regardless of fault, such as when falling rocket debris damages property.
[7] The Rescue Agreement (1968), formally the Agreement on the Rescue of Astronauts, the Return of Astronauts, and the Return of Objects Launched into Outer Space, is an international treaty that establishes obligations for states to rescue astronauts in distress, return them to their launching state, and assist in the recovery of returned space objects.
[8] The Registration Convention (1975), formally known as the Convention on Registration of Objects Launched into Outer Space, establishes a framework for the registration of space objects. It requires launching states to provide information about their space objects to the United Nations.
[9] The Moon Agreement, officially known as the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies, aims to provide a comprehensive legal framework for activities on the Moon and other celestial bodies.
[10] 71st International Astronautical Congress (IAC) – The CyberSpace Edition, 12-14 October 2020 by Viva Dadwala and Madeleine Macdonald.
[11] https://pca-cpa.org/en/about/panels/panels-of-arbitrators-and-experts-for-space-related-disputes/
[12] See https://www.legislation.gov.uk/ukdsi/2021/9780348223682/note
[13] Joanne Wheeler MBE is a leading expert in satellite law. With over 20 years of experience, including roles at ESA and Ofcom, she is recognized as a Top Tier lawyer for her work in satellite communications. Wheeler’s significant contributions to the space industry earned her an MBE in 2017.
[14] https://www.reuters.com/world/us/us-says-russia-carried-out-irresponsible-anti-satellite-test-2021-11-15/
[15] https://www.gov.uk/government/collections/the-uks-modern-industrial-strategy-2025
