The space industry is set to accelerate in 2025, with a surge in satellite launches and the roll-out of cutting-edge satellite-based services. As the industry expands, a parallel rise in disputes will occur, especially as government regulations and international agreements struggle to keep pace with private-sector advancements. In this rapidly evolving sector, arbitration is taking center stage as the go-to mechanism for resolving space-related disputes.
By Alexandra van der Meulen, Joshua Kelly, Annie Pan and Veronika Timofeeva
2025 is set to be another growth year for the space industry, with more than 200 satellites scheduled to be launched, and heightened deal-making activity among satellite operators and direct-to-device service providers looking to consolidate their market positions. Assuming the space economy maintains its current trajectory, the World Economic Forum projects its value could soar to US$1.8tn by 2035.
However, domestic and international legal frameworks have struggled to keep pace with the rapid growth of private-sector activity. As private sector growth outpaces regulatory advancements, businesses and states alike face an increase in potential risks and disputes.
Three main themes are likely to dominate the space industry in 2025:
More satellites, more services: with launch costs continuing to decrease, satellite operators are scaling their networks, delivering a new wave of satellite-based services to consumers, businesses, and governments. These include low-earth orbit broadband for applications like high-speed in-flight internet and Earth observation (“remote sensing”) services, which can monitor fire risks or environmental damage via satellite imagery.
Demand for support services: increased activity from satellite operators is driving demand for support services, such as satellite maintenance and in-orbit refueling. SpaceX’s plans to test Starship-Starship refueling in 2025 will be closely watched, as a potential industry game-changer.
Changing regulations: as space activities expand, governments will doubtless be reassessing existing domestic and international regulatory frameworks. Central to this will be finding the right balance between fostering commercial innovation and safeguarding safety and security on both the national and global level.
For some time now, regulation of the space industry has fallen behind the boom in private sector activity. Governments now face the challenge of catching up, both domestically and internationally, to put in place more modern regulations.
Alexandra van der Meulen
Partner
Historically, commercial disputes in the space industry have been relatively infrequent, reflecting limited private sector involvement. However, with the expansion of private players and heightened financial stakes, we anticipate an increase in disputes as parties seek to assert their rights. This shift is likely to drive a rise in contractual disputes across four key areas:
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the supply of services by satellite operators to the telecoms and defense sectors;
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breach of contract disputes concerning launch, refueling and maintenance services;
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joint venture disputes between state-owned entities and private-sector operators; and
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insurance coverage disputes, particularly in relation to orbital damage.
As the risk of disputes grows, players in the space industry would be well advised to consider what dispute resolution mechanisms will best suit their needs. To that end:
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Businesses should review the dispute resolution provisions in their contracts and consider whether they are fit for purpose. Arbitration, valued for its confidentiality, neutrality, and flexibility in addressing complex technical disputes, is emerging as the favored approach for both commercial and investor-state space-related disputes.
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Investors will need to consider whether they have adequate protection at the international law level, in the event of a dispute with a state.
Given the likely developments to the international law framework for space activity in the coming years, we can help businesses actively monitor upcoming reforms and identify strategic steps to address both emerging opportunities and potential risks.
International arbitration in 2025
