SPACE LAW
Commercial space law: launch and operation of spacecraft DONNA LAWLER, PRINCIPAL, AZIMUTH ADVISORY
S
pace is a unique environment in which to conduct business. Not only are the locations harsh, remote and difficult to access, the risks high and the timeframes long, but the legal environment is different from any other. The interaction of international treaties and guidelines, international customary law, national legal frameworks and industry-specific contractual structures has created legal conditions that make space transactions a highly specialised branch of technology contracting. Whereas in terrestrially based technology contracts, the focus of lawyers is often to shift as much risk as possible to the other party and to impose punishing financial consequences for failure, experienced space lawyers often employ a different set of tools and structures with an emphasis on long term mission success. Rather than each party competing to avoid as much risk as possible, seasoned negotiators of space contracts tend to focus on the clear and efficient allocation of risk based on time rather than fault, the avoidance of double-insurance and prevention of disputes between insurers. Whilst each party must be given appropriate incentives to behave in a manner that will maximise the chances of success of the mission and meet required timeframes, adversarial legal techniques used in terrestrial projects can sometimes work against those longterm goals. Provisions that drive an internal culture where potential failures are hidden rather than brought to light can have long term damaging effects in the harsh environment of space, where repair of faulty equipment after launch is usually not a viable option. Similarly, care must be taken to reach the right balance of incentives
22 THE BULLETIN March 2020
and disincentives, as fatal flaws can be introduced into a program if vendors are pressured to rush important testing phases in order to avoid financial penalties.
THE LEGAL ENVIRONMENT FOR OUTER SPACE: INTERACTION BETWEEN INTERNATIONAL LAW, NATIONAL LAW AND COMMERCIAL CONTRACTS For the most part, outer space is an area beyond national jurisdiction1. In this respect, analogies can be drawn between outer space with other such areas, such as the High Seas and Antarctica, where a combination of international treaties, national laws governing certain objects and activities of citizens and private contractual frameworks create unique legal environments. Over time, legal and risk frameworks have been adapted to the particular physical characteristics and challenges of each of these areas, with a view to allocating resources and manage the activities of people, entities and objects2. In the case of outer space, increasing cold war tensions between the USSR and USA led to their adoption of 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’) along with many members of the international community3. Other space treaties dealing with liability, registration and other matters in more detail followed over the next 12 years4. The States parties to the Outer Space Treaty are required to conduct activities in outer space in accordance with international law to ensure that activities of their nationals in space comply with the Treaty. In particular:
…the activities of non-governmental entities in outer space, including the moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty.5 In line with this international requirement, an increasing number of space faring nations are passing national space laws6 which include licensing regimes applicable to their nationals who engage in space activities7. National space laws deal with a variety of issues, many of which are designed to ensure compliance with international space treaties. For example, many States require participants in space activities to provide information that will enable the State to comply with its obligations under the Registration Convention.8 Other national provisions are designed as a response to State responsibility for losses under the Liability Convention, requiring licence-holders to insure against liability in the event of an accident arising from the space activity9 or mandating implementation of space debris mitigation measures10. Space-related contracts, in turn, must be responsive to the national laws affecting the parties to the contract, including with respect to space debris, registration of space objects, environmental controls and liability.
ALLOCATION OF RISK IN SPACE-RELATED TRANSACTIONS Lawyers who have dealt extensively with technology contracts that do not have a space component would be familiar with a model that relies on the determination of fault and the allocation of responsibility to the at-fault party. In
