LITERATURE REVIEW OF UNCITRAL AND BUSINESS LAW
This year marks the ten-year anniversary of the Permanent Court of Arbitration
(“PCA”) Optional Rules for Arbitration of Disputes Relating to Outer Space Activities (the
“Rules”). With no publicly reported cases, the Rules are yet to gain popularity among
potential users. A recent post, by Rosenberg and Dadwal, highlights the conundrum stating
that “[t]he PCA has administered disputes relating to outer space, but in those cases, the
parties arbitrated their disputes under the 1976 Arbitration Rules rather than the
PCA Outer Space Rules”, attributing this to an awareness of the PCA and its Rules.
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Does the question remain whether the Rules offer anything to incentivize users to deviate
from the well-trodden path of selecting the UNCITRAL Rules? To address this, the post
evaluates the features of the Rules, which are arguably designed to better augment the
resolution of disputes involving space law-specific issues. The Rules have been inspired by
the 2010 UNCITRAL Arbitration Rules with three major modifications concerning: (i) the
scope of application, specifically adapting the Rules to all users, private parties, states, and
international organizations; (ii) applicability of the confidentiality regime and (iii) procedure
applicate to experts and scientific and technical information.
The Scope of Application of Business law and UNCITRAL
The introductory section to the Rules demonstrates that the PCA foresees the potential users
of the Rules to be a combination of States, private actors, and international organizations. It
thus states that the Rules encompass procedural tools which could be utilized by States,
international organizations or private entities in resolving disputes with an outer space
element. The flexibility of the rules is in keeping with the nature and operation of outer-space
activities. For example, the launch of satellites by a private state actor, which occurs through
a government facility, can involve state and non-state actors, which in case of a dispute would
require the flexibility afforded by the Rules. Article 1(1) of the Rules extends the application
of the Rules to “a defined legal relationship, whether contractual or not”. Together with the
introductory paragraph, this leaves room for States to incorporate the Rules in their bilateral
and multilateral treaties, or in statutes extending their application beyond contractual
disputes.
To avoid issues of subject-matter jurisdiction, particularly on what constitutes “outer-space
law issues”, Article 1(1) provides that the “characterization of the dispute as relating to outer
space is not necessary for the jurisdiction where parties have agreed to settle a specific
dispute under these Rules”. This particular phrasing side-stepping rationemateriaejurisdiction
hurdle is also seen in the other subject-indicative rules published by the PCA on relating to
the environment and natural resources. Accordingly, the applicability of the Rules is
independent of their designation as those concerning “outer space law” issues, with the only
requirement being the agreement of the parties. In theory, therefore, nothing stops parties
from adopting these rules for any of their disputes so long as all parties to the jurisdictional
instrument agree.
Article 1 of UNCITRAL and Its Relationship with Business Law
Article 1(2) of the Rules, another modification to the UNCITRAL Rules, expressly accounts
for the fact that States may have disputes against not just other States but also private
investors capable of settlement by arbitration. Therefore, it provides that the agreement
represents a waiver of immunity from jurisdiction. However, it also qualifies this by stating
that agreement to the Rules is not an automatic waiver of immunity from execution. The
assurance of a waiver of jurisdictional immunity in case of an agreement to arbitrate disputes,
together with the need for an express waiver requirement for immunity from execution,
reflect prominent viewpoints on the issues.
Specifically, it allows for the party entering into the arbitration agreement an assurance that it would be enforced, while simultaneously also
protecting a State’s exercise over its critical assets in case of an adverse outcome. This
arguably helps balance both Parties’ interests. Thus, the Rules demonstrate that private users,
and states (and indeed international organizations) are considered as potential users.
Moreover, the PCA states that the Rules have been designed to “reflect the public
international law element that pertains to disputes that may involve states”. This is reflected
in the Rules, as an illustration, in Article 9 which provides for the possibility of five
arbitrators, a procedural feature arguably typical to inter-state cases. [ [1] ]
Confidentiality and Business Laws in International Regimes
Disputes involving elements of outer space law may have aspects including trade secrets, or
issues affecting national security. As a result, Article 17(6) provides for the clearly
enunciated procedure to qualify documents as “classified” bolstering the confidentiality
protections afforded to the Parties. The Tribunal is empowered to determine whether such
information needs special protection from disclosure, failing which it would
cause serious harm to either party.
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If so, then, under Article 17(7) Tribunal has the power to
determine the persons to whom the confidential information may be released and on what
conditions. The Tribunal also has the power to decide whether a confidentiality adviser has to
be appointed. Additionally, under Article 17(8) such a person would ordinarily be allowed
access to the documents and then would prepare a report for the Tribunal on the specific
issues designated by the Tribunal, without disclosing the confidential information to the
Tribunal. These options, which the Tribunal is now expressly empowered to consider, help to
address the potentially sensitive nature of disputes foreseen to arise because of the elements
of outer space law involved.
Experts and Scientific Information
As with arbitrations having technical components, the Rules envisage the appointment of a
Tribunal-appointed expert (Article 29(1)), should the Tribunal consider it necessary to help
address the scientific and technical issues that may arise. Such issues can cover a broad range
from technical specifications under a contract which would potentially require experts in the
relevant sciences, to the determination and forecasting of losses accrued by a party which
could possibly require forensic accountants, or a combination thereof.
As discussed above, the Tribunal may impose confidentiality requirements upon experts. Therefore, any
appointed expert’s purview is subject to any restrictions the Tribunal may impose on the basis
of the sensitivity of the information (Article 29(5)). The balance achieved in these provisions
is designed considering that some or all of the members of the Tribunal itself may not be
leading experts in the relevant field and could be assisted by experts while recognising the
fact that parties may have serious confidentiality concerns with sharing such data with
experts.
Apart from experts, the Rules also envisage the possibility for the Tribunal to jointly or
separately provide a “non-technical” document summarizing and explaining the background
to any scientific, technical, or other specialized information, the Tribunal considers necessary
to understand the matters in dispute fully (Article 27(4)). This could assist the Tribunal in
contextualizing any expert report and fully understanding the implications in light of the
technical nature of outer space disputes.
Modifiaction to UNCITRAL
These prominent modifications to the UNCITRAL Rules bring to fore the question of the
suitability of the Rules to disputes relating to outer space issues vis-à-vis provisions of the
2010 UNCITRAL Rules.
The Rules present modest but important clarifications on all three aspects discussed above:
First, with respect to waiver of immunity from jurisdiction, the ILC has confirmed in Article
17 of its Draft Articles on Jurisdictional Immunities of States and Their Property 1991, that in
its view, entering into an arbitration agreement results in a waiver of immunity from
jurisdiction. However, a waiver mentioned as part of the Rules ensures that it is very little
likelihood of any parallel proceedings in domestic courts in cases involving States.
Second, in terms of confidentiality, while the 2010 UNCITRAL Rules do not stipulate any
specific obligation of confidentiality, Article 34 of the 2010 UNCITRAL Rules states that an
award shall only be made public with the consent of all parties. A corollary of this is that
parties have a duty to keep the award confidential if either party does not consent. The
applicable confidentiality regime under the UNCITRAL Rules can also be enhanced by
encompassing confidentiality clauses, particularly in the contracts/ instruments referring the
matter to arbitration. The existence of confidentiality clauses in such contracts which may
involve information protected by rights, with security implications or other sensitive purposes
is unsurprising. However, clarifying and bolstering the regime applicable to confidentiality
under the Rules provides clarity and added value to potential users.
Finally, the clarifications on the powers of the Tribunal to receive a non-technical document,
and to appoint an expert, deal with the reality that a tribunal versed in legal matters may not
be equally versed with the scientific and technical aspects in dispute, and might warrant (and
benefit from) additional submissions either joint or separate to contextualize such
information. While in principle, this matter can also be proposed and agreed upon under the
2010 UNCITRAL Arbitration Rules, the express reference to this power ensures more liberty
in the hands of the Tribunal. These clarifications provide added value to potential users, but
whether the Rules gain popularity with the increasing activity of private actors in the space
the industry remains to be seen.
Any opinions or views expressed in the post are original, entirely personal, and independent.
Any views or opinions expressed do not represent the views of any organization with which
the author is affiliated at present or was affiliated in the past. It is also affirmed that the
author has not received any funding from any organization for the post.
