Arthad Kurlekar*
Key Words: Arbitration – Outer Space – PCA Rules – UNCITRAL Rules
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 UNCITRAL Arbitration Rules rather than the PCA Outer Space Rules”, attributing this to a lack of awarenessof the PCA and its Rules.
The question remains whether the Rules offer anything to incentivise users to deviate from the well-trodden path of selecting the UNCITRAL Rules? To address this, the postevaluates the features of the Rules, whicharearguably designed to better augment the resolution of disputes involving space law specific issues. The Rules have been inspired from the 2010 UNCITRAL Arbitration Rules with three majormodifications concerning: (i) the scope of application, specifically adapting the Rules to all users, private parties, states and international organisations; (ii) applicability of the confidentiality regime and (iii) procedure applicate to experts and scientific and technical information.
The Scope of Application
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 organisations. It thus states that the Rules encompass procedural tools which could be utilized by States, international organisations 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 of 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 jurisdiction where parties have agreed to settle a specific dispute under these Rules”. This particular phrasing side-stepping rationemateriaejurisdiction hurdles 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(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 against 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 foran 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. Thisarguably helps balance bothParties’ interests.Thus, the Rules demonstrate that private users, and states (and indeed international organisations) 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
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 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 measures of protection from disclosure, failing which it would cause serious harm to either party. 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.
Expertsand 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 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 potentially require forensic accountants, or a combination thereof.[2] 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 specialised information the Tribunal considers necessary to understand fully the matters in dispute (Article 27(4)). This could assist the Tribunal in contextualising any expert report and to fully understand the implications in light of the technical nature of outer space disputes.
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 there 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 thatparties have a duty to keep the award confidential, if either party does not consent. The applicable confidentiality regime under the UNCITRAL Rulescan also be enhanced by encompassing confidentiality clauses particularly in the contracts/ instruments referring the matter toarbitration. The existence of confidentiality clauses in such contracts which may involve information protected by rights, with security implications or other sensitive purpose is unsurprising. However, clarifying and bolstering the regime applicable to confidentiality under the Rulesprovides 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 contextualise such information. While in principle, this matter can also be proposed and agreed 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 increasing activity of private actors in the space 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 organisation 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 organisation for the post.
***
* Associate, Curtis Mallet Prevost Colt Mosle LLP, Geneva, LLM (MIDS), BCL (Oxon), BA.LLB (NUJS)
[1] Article 4 of Annex VII of the United Nations Convention on the Law of the Sea which provides for a five member tribunal to be constituted)
[2]See e.g.Kishenganga Arbitration (Pakistan v India), PCA Case No. 2011-01
Centre for Aviation and Space Laws 