Space Law and Arbitration: An introduction to Space Law in the People’s Republic of China

This is the fifth article in Clyde & Co’s latest international arbitration series covering the topic of Space Law & Arbitration. In this piece, Senior Associate Catherine Wang and Trainee Peter Nzekwu consider, in overview only, the People’s Republic of China’s (PRC) approach to space regulations and whether arbitration is a suitable dispute resolution mechanism in the PRC in respect of outer-space disputes.

In this article, we will (i) identify the space treaties and agreements to which the PRC is a party; (ii) address how the arbitrability and confidentiality issues are regulated in the PRC Arbitration Law and how the PRC Space Law is being developed; (iii) summarise the PRC arbitral institutions and their institutional rules; and finally (iv) outline an outer-space incident that occurred between the PRC and Space X, which demonstrates the manner in which the Outer Space Treaty (1967) was applied by the PRC in practice.

Reader’s note: The authors to this article are not PRC law qualified lawyers, so the article is written based on publicly available information and resources.

Space Treaties and Agreements signed by the PRC

The PRC is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Arbitration Awards, ¹ with two reservations, namely the reciprocity reservation and the commercial reservation.²

In respect of the UN treaties, the PRC has ratified the major UN Space Treaties, the Outer Space Treaty (1967), ³ the Rescue Agreement (1968),⁴ the Space Liability Convention (1972),⁵ and the Convention on Registration of Objects Launched into Outer Space (1975).⁶

The PRC is also a signatory to various intergovernmental space related agreements, such as the ITU and IMSO⁷ agreements. It is, however, not a signatory to the Moon Agreement 1979.⁸

On a domestic level, the PRC’s National Space Administration (CNSA) is responsible for the implementation of the space treaties and development of space policies across the PRC.⁹ According to information available online, the CNSA would liaise with a special task force to obtain a diverse source of knowledge from (for example) space law professors and government agencies, so that it can act with best practice in space related activities and plan for future development.¹⁰

PRC Arbitration Law and Space Law

The Arbitration Law of the People’s Republic of China (PRC Arbitration Law) sets out how arbitration proceedings should be conducted. 

Notably, Article 3 of the PRC Arbitration Law, lists the types of disputes which are non-arbitrable. They include: 

“1. Disputes arising from marriage, adoption, guardianship, bringing up of children and inheritance

2. Disputes that have been stipulated by law to be settled by administrative organs.”

Another key issue to consider in respect of outer-space disputes is confidentiality. Pursuant to Article 40 of the PRC Arbitration Law, “the arbitration tribunal may not hear a case in open sessions. But when parties concerned agree to have the case heard in open sessions, the hearing may be held openly, except cases that involve State secrets.” It is clear that this provision would operate to protect what the PRC deems a state secret. However, it is unclear if this protective provision extends to a private party or parties claiming secrecy protection as well. 

With regards to the PRC Space Law, it is worth highlighting that according to Article V(5) of China's Space Program: A 2021 Perspective The State Council Information Office of the People's Republic of China (dated January 2022):

“To promote law-based governance of the space industry, China will speed up the formulation of a national space law and establish a legal system with this law at the core. This will include studying and formulating regulations on satellite navigation, strengthening the management of satellite navigation activities, revising measures for the registration of space objects, and regulating the sharing and use of space data and the licensing of civil space launches. It will also include studying and formulating regulations on the management of satellite frequency and orbit resources, and strengthening the declaration, coordination and registration of these resources to safeguard the country's legitimate rights and interests in this regard. China has strengthened research on international space law, and actively participated in formulating International Telecommunication Union standards and international rules regarding outer space, maintaining the international order in outer space based on international space law, and contributing to a fair and reasonable global governance system for outer space.”¹¹

The PRC Arbitral Institutions and Institutional Rules

In terms of arbitral institutions in the PRC, there are approximately 270 of them, which is quite significant.¹² The four largest institutions that handle the most international cases appear to be the China International Economic and Trade Arbitration Commission (CIETAC), the Beijing Arbitration Commission (BAC), the Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center, SHIAC), and the Shenzhen Court of International Arbitration (SCIA).¹³ Those arbitral institutions have their own set of commercial arbitration rules. As at the date of this article, we have not found any outer-space commercial arbitration cases published online which are subject to any arbitral institutional rules of the PRC.    

Among the PRC arbitral institutions, it is noteworthy that CIETAC not only has its commercial arbitration rules, but it also has its own set of investment arbitration rules – the CIETAC International Investment Arbitration Rules - effective from 1 October 2017 (the “Rules”).¹⁴ The Rules are also the PRC arbitral institutions’ first set of rules specifically designed for resolving investor-state international investment arbitrations.¹⁵

The Rules do not appear to preclude their application to outer-space disputes. According to the Rules, “[b]ased on the arbitration agreement between the parties, CIETAC accepts cases involving international investment disputes arising out of contracts, treaties, laws and regulations, or other instruments between an investor and a State, an intergovernmental organization, any other organ, agency or entity authorized by the government or any other organ, agency or entity of which the conducts are attributable to a State.”¹⁶

That said, there are three features of the Rules that are worth noting for outer-space dispute purposes:

(1)                  Publicity:

The Rules provide that unless otherwise agreed by the parties or decided by the arbitral tribunal, the arbitral hearing shall be conducted in public.¹⁷ Unless otherwise agreed by the parties, the parties shall also be deemed to have agreed that CIETAC may publish information on the arbitral proceedings conducted under the Rules.¹⁸

Accordingly, if any parties for example wish to keep their space related arbitration under the Rules confidential, they may try to expressly agree to it before the commencement of the arbitration.  

(2)                  Third party written submissions:

Pursuant to Articles 44.1 and 44.2 of the Rules, a Non-disputing Contracting Party may, after notifying the disputing parties and the CIETAC Commission in writing, make written submissions regarding interpretation of the investment treaty relevant to the dispute. Similarly, a Non-disputing Party may, after sending the required notice, make written submissions on matters within the scope of the dispute. 

Where truly necessary, the arbitral tribunal may decide to provide the Non-disputing Contracting Party or Non-disputing Party with documents relating to the arbitral proceedings.¹⁹

This is a relatively unique feature of the Rules. Parties to any potential space disputes should bear in mind this possibility, when considering if CIETAC is an appropriate dispute resolution mechanism.

(3)                  Combination of conciliation with arbitration:

Another feature of the Rules is that the arbitral tribunal may conciliate the dispute during the arbitral proceedings pursuant to Article 43 of the Rules. 

Any such conciliation will be confidential, and the tribunal has discretionary power to conduct the conciliation as it considers appropriate. Unless otherwise agreed by the parties, where conciliation is not successful, the arbitral tribunal shall resume the arbitral proceedings and render an arbitral award. The arbitrators who conduct the conciliation will also preside over the arbitration unless being replaced upon the parties’ joint request.²⁰

Outer-space incident between the PRC and SpaceX

On 2 December 2021, the PRC filed a note to the UN concerning the close proximity of the PRC Space Station (Tiangong) with the Starlink satellites under the control of Elon Musk’s Space Exploration Technologies Corporation (SpaceX).²¹ In this note, the PRC outlined two instances of near collisions between Tiangong and the Starlink satellites on 1 July 2021 and 21 October 2021, respectively.²² In both instances, Tiangong engaged in an emergency manoeuvre, in order to avoid a potential collision with the SpaceX satellites.²³

In its note, the PRC referred to Article V²⁴ of the Outer Space Treaty (1967) and stated that as a state party, the PRC had a duty to notify the other state parties of the UN or Secretary-General of the UN regarding any threat to the health or life of astronauts.²⁵

By reference to Article VI of the Outer Space Treaty (1967), the PRC highlights in its note that state parties “bear international responsibility for national activities in outer space”, including governmental and non-governmental agencies, and they need to ensure conformity to the provisions of the Outer Space Treaty (1967). 

The PRC also made a formal request to the UN Secretary-General to circulate the aforementioned note to all of the state parties to the Outer Space Treaty (1967), to inform them of the two instances, and to remind them of their duties under the Treaty.²⁶

As at the date of this article, SpaceX does not appear to have responded to certain reporters’ requests to comment.²⁷ In 2019, the European Space Agency manoeuvred one of their satellites to evade a possible collision with another SpaceX Starlink satellite.²⁸ We understand the ISS has also taken evasive manoeuvrers to avoid space debris generally.

As technology exponentially advances, there may be an increasing number of satellites in space, and in turn, a higher probability of collision incidents.²⁹ A space commentator estimated that there are hundreds of collision avoidance manoeuvres in space every year.³⁰ An increasing number of notes, similar to the one the PRC filed to the UN in 2021, may be expected in the future.

Conclusion

The PRC, as a big player in the development of outer-space technology, has signed/ratified various space treaties and intergovernmental agreements. In this note, the PRC also recognises the relevance and binding nature of the UN space treaties as can be seen by its response to the Starlink incident. 

On the arbitration side, the PRC is well equipped with domestic arbitration laws and arbitration institutional rules to handle commercial and investment arbitration proceedings. While the PRC is actively developing its domestic space law, it will be of interest to see the extent to which non-national parties may be confident to select arbitration as the dispute resolution mechanism to resolve future space disputes in the PRC. 

The series continues next week with a perspective from Australia.

For further information about our Space Law practice, please contact Patrick Slomski or Darcy Beamer-Downie. 

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¹ https://www.newyorkconvention.org/countries 

² https://globalarbitrationreview.com/insight/know-how/commercial-arbitration/report/china#C22A497A33272D7776FD6F6077F2209C3E86548D 

³ https://treaties.unoda.org/t/outer_space/participants 

⁴ https://www.unoosa.org/res/oosadoc/data/documents/2023/aac_105c_22023crp/aac_105c_22023crp_3_0_html/AC105_C2_2023_CRP03E.pdf Page 6

⁵ https://www.unoosa.org/res/oosadoc/data/documents/2023/aac_105c_22023crp/aac_105c_22023crp_3_0_html/AC105_C2_2023_CRP03E.pdf Page 6

⁶ https://treaties.un.org/Pages/ViewDetailsIII.aspx?src=TREATY&mtdsg_no=XXIV- The PRC has been a member of the United Nations Committee on the Peaceful Uses of Outer Space since 1980.  
⁷ ITU international telecommunications Union since 1920  and IMSO - International Mobile Satellite organisation 
⁸ China acceded to the Outer Space Treaty in 1983 and the subsequent major Space Treaties in 1988. This is with the exception of the Moon Agreement 1979 which China has not signed at present.  
China is also party to other space related agreements such as Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space and under Water (1963), Agreement Relating to the International Telecommunications Satellite Organization (ITSO) (1971), and Convention on the International Mobile Satellite Organization (IMSO) (1976). 
⁹ https://www.unoosa.org/res/oosadoc/data/documents/2004/stspace/stspace22_0_html/st_space_22E.pdf   Page 32

¹⁰ https://www.unoosa.org/res/oosadoc/data/documents/2004/stspace/stspace22_0_html/st_space_22E.pdf  Page 32

¹¹ https://english.www.gov.cn/archive/whitepaper/202201/28/content_WS61f35b3dc6d09c94e48a467a.html 

¹² https://law.asia/china-arbitration-evolution/ 

¹³ https://www.chinajusticeobserver.com/a/china-s-arbitration-institutions-release-2022-annual-reports 

¹⁴ https://www.acerislaw.com/wp-content/uploads/2021/07/cietac.org-CIETAC-International-Investment-Arbitration-Rules-China-International-Economic-and-Trade-Arbitration.pdf

¹⁵ CIETAC Explanatory Note Regarding the CIETAC Investment Arbitration Rules (Sept. 26, 2017) 
(https://www.yidaiyilu.gov.cn/zchj/zcfg/29165.htm).

¹⁶ CIETAC International Investment Arbitration Rules, Article 2.

¹⁷ CIETAC International Investment Rules, Article 32.

¹⁸ CIETAC International Investment Rules, Article 55.

¹⁹ CIETAC International Investment Rules, Article 44.10.

²⁰ CIETAC International Investment Rules, Article 43.

²¹ https://www.unoosa.org/res/oosadoc/data/documents/2021/aac_105/aac_1051262_0_html/AAC105_1262E.pdf

²² https://www.unoosa.org/res/oosadoc/data/documents/2021/aac_105/aac_1051262_0_html/AAC105_1262E.pdf

²³ https://www.unoosa.org/res/oosadoc/data/documents/2021/aac_105/aac_1051262_0_html/AAC105_1262E.pdf

²⁴ Article V relates to the astronauts and in particular “States Parties to the Treaty …shall immediately inform …of any phenomena they discover in outer space, including the moon and other celestial bodies, which could constitute a danger to the life or health of astronauts.”

²⁵ https://www.unoosa.org/res/oosadoc/data/documents/2021/aac_105/aac_1051262_0_html/AAC105_1262E.pd

²⁶ https://www.unoosa.org/res/oosadoc/data/documents/2021/aac_105/aac_1051262_0_html/AAC105_1262E.p

²⁷ https://spacenews.com/chinas-space-station-maneuvered-to-avoid-starlink-satellites/ 

²⁸ https://spacenews.com/esa-spacecraft-dodges-potential-collision-with-starlink-satellite/ 

²⁹ https://spacenews.com/chinas-space-station-maneuvered-to-avoid-starlink-satellites/ 

³⁰ https://www.nhm.ac.uk/discover/what-is-space-junk-and-why-is-it-a-problem.html