Eight Reasons Why Space Disputes Will Become More Frequent

Over the past few years, references to space activities have increased in the press. At international arbitration conferences space disputes have become a frequent topic, as reported here, here and here, for example. In 2021, I co-founded the Space Arbitration Association with the aim of providing information on space disputes and opening a forum for discussion between space industry professionals and international arbitration practitioners. However, with many space arbitrations remaining confidential due to security concerns, it is not always easy to understand how to define space disputes and how many there actually are. This post explains in eight reasons what is meant by space disputes and why space disputes will become more frequent.

1. The Space Industry is Growing and Diversifying

In recent years, the space industry has seen unprecedented growth. In 2024, the space industry grew nearly 8%, surpassing, for the first time, USD 600 billion. According to recently published data, 2025 again saw a sharp increase in space launches. Finally, according to the World Economic Forum, the space industry is predicted to reach USD 1.8 trillion in value by 2035. This growth is accompanied by an increase in foreign direct investment as space companies are reacting to public incentives offered by States seeking to build a domestic space industry, to ensure their independent access to space, to build space-based military capabilities, and to compete in the so-called new space race.

2. A New Geopolitical Space Race is Underway

Space is quickly gaining in geopolitical importance. As military capabilities increasingly rely on satellite services, sovereign power over satellite constellations is considered critical (the European Union ("EU"), for example, is planning a new sovereign constellation). This, in turn, requires satellite manufacturing capabilities, a launch infrastructure, and, importantly, rights over the limited radio frequency spectrum without which satellites are useless. At the same time, competing plans to build permanent settlements on the Moon are ongoing, and there is a fear that whoever gets there first will be in a more advantageous position. The same applies with respect to space mining as safety zones required to guarantee safe mining operations, once established, could arguably serve to keep out competitors. The rapid advances in artificial intelligence and quantum computing require ever greater amounts of energy, which is driving the idea of establishing data centres on the Moon, where unlimited solar energy would be available, but where again, competition could heat up over access to suitable sites.

3. Launch Capabilities Remain Limited

All space activities depend on launch capabilities, meaning a rocket and a spaceport from which the rocket can be launched. For various legal and technical reasons, suitable spaceport locations must be carefully chosen and are still rare. In addition, while attempts to remedy this are ongoing, so far, few companies can conduct launches at competitive costs by reusing their rockets. Therefore, launching slots are important commodities, which, in turn, creates significant upstream pressure on satellite manufacturers, who must have satellites ready for launch within an indicated launch window. It also makes in-orbit satellite failures more severe as replacements cannot always be launched immediately, even if otherwise available.

4. The Low Earth Orbit is Increasingly Congested

The number of space objects being launched has grown dramatically over the last few years and will grow further. At the same time, there are still no binding traffic rules to avoid collisions. This lack of uniform rules on how to respond to collision warnings increases the risk for satellite operators and insurers. In addition, the increase in space objects also increases the risk caused by space debris that can result from space objects that are not correctly deorbited. While many companies are voluntarily mitigating the risk of creating space debris, space debris mitigation measures remain non-binding at the international level. Finally, the increasing use of the radio frequency spectrum can cause harmful frequency interference as well as competition between operators over certain frequency rights.

5. The Applicable Legal Framework Remains Fragmented and Incomplete

The binding international legal framework for space activities is incomplete. There are five international treaties, which constitute the basis of international space law. These are complemented by non-binding guidelines and United Nations General Assembly Resolutions. In addition, several countries have enacted domestic space laws, and the European Commission has recently published a proposal for a European space law, the EU Space Act. Finally, as of January 2026, the US-led Artemis Accords, a non-binding set of principles on space cooperation, have been signed by 61 countries. The result is a fragmented international legal framework that fails to provide clear guidance on several pressing issues, such as the legality of the establishment of settlements or safety zones on the Moon, on intellectual property rights in space, on the delimitation of space and aviation law, and on space safety and sustainability as addressed in the previous section. In addition, the rules of the International Telecommunication Union, tasked with the management of the radio frequency spectrum, had not been conceived for the spectrum demands of mega constellations, and, consequently, are not always ideally adapted to respond to current commercial pressures.

6. Commercial Disputes Are Already a Reality and Will Increase Further

The space industry is already regularly facing commercial disputes, and based on the preceding observations, it is likely that these types of disputes will increase in the coming months and years. It is expected that more disputes will arise out of the high pressure the upstream satellite industry is experiencing as a result of the increasingly strong demand for civil and military satellite services in combination with still limited launch options. Any manufacturing delay can cause the loss of a launch window, resulting in a dramatic delay in the returns of an investment. Likewise, with on-orbit repair opportunities still being limited, manufacturing errors can result in long service interruptions and high losses if no launch option is available to launch a replacement, even if it can be manufactured quickly. This situation is likely to give rise to commercial disputes arising out of manufacturing, launch, and insurance contracts. Commercial disputes are also likely to arise out of coordination agreements when the frequent use of one operator harms the operation of another, or operators compete over the same frequency rights. Finally, insurance disputes are likely to increase as a result of growing space debris concerns, and intellectual property rights – concerning inventions made in space as well as the use of protected technologies in space – are another source of likely disputes that will grow in importance with the return to the Moon and current commercial space station projects entering the operating phase. As space projects typically involve different stages and take place over several years, any of these disputes can resemble disputes over large construction projects.

7. State-State Disputes Could Erupt Over Unsettled Legal Issues or Liability Claims

Given the existence of competing projects and the international legal uncertainty over private property rights and the legality of safety zones in space, State-State disputes could erupt over the legality of mining or settlement sites or the ownership of mined resources themselves. Rights over the use of frequencies and orbital positions could also result in disputes between States. Finally, a collision, should it happen and cause significant damage, could result in State-State proceedings, for example, before the Claims Commission, a dispute settlement mechanism provided for in the 1972 Convention on International Liability for Damage Caused by Space Objects.

8. Upcoming Changes in Policy and Regulation are Likely to Provoke Additional Investment Disputes

Finally, the new space race and the growing political and military dimension of space activities are likely to provoke an increase in investment disputes. Space activities are highly regulated, often by more than one country, and are, therefore, vulnerable to changes in regulation motivated by shifting policy goals. Changes in launch authorizations, operating licenses, or frequency rights, changes in export control regulations, or new sustainability regulations, can easily frustrate space investments and lead to investment claims in the space sector. The UNCITRAL claim recently brought by OneWeb against Russia under the Russia-UK bilateral investment treaty well illustrates this risk. As space activities often have substantial links with more than one country, taxation of space activities could be another source of investment disputes in the years to come.

Conclusion

To conclude, the rapid growth of the space economy and the increasing importance of space for geopolitical ambitions, combined with still limited launch capabilities, the increasing congestion of the lower orbits, and a fragmented and incomplete legal framework, set the perfect stage for an increase in commercial, State-State, and investment disputes in the space sector. Many of these commercial and investment disputes are in turn likely to end up before arbitral tribunals, as international arbitration remains the preferred dispute settlement mechanism in cross-border space contracts, and space investors are likely to resort to international investment agreements. Whether any State-State disputes will be arbitrated is a topic for another post.