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COURTS OF SPACE

Space Disputes Guide Edition 3

CONTENT TABLE 01 02

Access to Justice in the Global Space Economy

Cross-border space activities, emerging markets and the role of alternative dispute resolution

The Democratisation of the Space Economy Space cannot be overlooked by nations

Alternative Dispute Resolution as Investment Infrastructure and a Tool for Cross-Border Collaboration

The DIFC Courts of Space: A Neutral and Independent Forum for Nations

Illustrative Scenarios: ADR in Practice

Redefining ADR in the space economy context

Scenario A: Co-Governance

Agreement with Opt-In Clause Jurisdiction Based on Consent

Scenario B: Absence of Clause

Scenario C: MSC Standalone

DIFC Courts Commitment

Conclusion

Jurisdiction Based on Connection with the DIFC

Mediation Pre-Litigation ADR for Space Disputes

COURTS OF SPACE

SPACE DISPUTES GUIDE Edition 3

Access to Justice in the Global Space Economy Cross-border space activities, emerging markets and the role of alternative dispute resolution

This Edition explores the role of Alternative Dispute Resolution (ADR), particularly mediation, international commercial arbitration and investment arbitration, in supporting the growth of the global space sector. It considers how ADR can help emerging nations attract foreign direct investment, while also assisting established spacefaring states in navigating the jurisdictional complexities of cross-border space transactions. In both contexts, ADR can provide the legal certainty, neutrality and enforceability required for increasingly international space activities.

Contributing author Camila Erazo Gonzalez

Prepared in collaboration with the DIFC Courts’

Colombia

October 2026

Commercial Space Lawyer & Managing Director, Lumena Space,

Courts of the Future Working Group

Editions 1 and 2 of the DIFC Courts of Space Disputes Guide established the foundational jurisdictional frameworks and procedural architecture for resolving disputes within the space sector. Edition 1 explored court procedures for different types of claims. Edition 2 examined the legal frameworks governing jurisdiction through which the DIFC Courts of Space (CoS) could serve as a neutral, independent, opt-in forum, as well as how governing law is determined when disputes arise in complex multi-jurisdictional and sector-specific transactions. Edition 3 addresses a need arising from the entry of new markets into the space industry and the absence of domestic space laws governing these emerging participants in the sector. Specifically, for emerging countries, the role of foreign direct investment in supporting the development of the space sector within their national economies has been recognised. In this context, ADR mechanisms are relevant not only to dispute resolution, but also as a means of providing legal certainty and helping to build confidence among foreign investors.

Given these foreign elements and technical complexities, the CoS initiative, which operates under the Courts of the Future (CotF), offers a viable alternative for advancing investment attraction and international cooperation. It can form part of the investment infrastructure and legal certainty that space actors require. It provides a mechanism through which an emerging space nation can say to a foreign investor: we may not yet have a national space law, but we have a binding, neutral and internationally enforceable agreement that protects your investment and provides a framework for resolving disputes without the uncertainty of domestic courts. For states with established national space legislation, it also provides a mechanism to ensure that cross-border transactions spanning multiple jurisdictions, legal systems and regulatory frameworks are governed by a single, neutral and enforceable dispute resolution framework designed to support complex cross-border transactions.

This Edition gives particular prominence to the DIFC Courts’ own ADR infrastructure: the Mediation Service Centre (MSC), the Small Claims Tribunal (SCT) with its embedded mediation process, and Part 27 of the Rules of the DIFC Courts in relation to the Court of First Instance (CFI). Together, these provide a comprehensive, tiered dispute resolution framework accessible to any party through a written opt-in agreement. Space Disputes Guide Edition 3 is addressed to the growing community of governments, international organisations, space agencies, investors and legal advisers working at this frontier, as well as the wider ecosystem of space actors.

The Democratisation of the space economy Space cannot be overlooked by nations

The space industry has evolved from a scientific endeavour led by a small number of nations into a critical component of countries’ socio-economic development. As a result, private investment has become a key driver of the sector’s growth. The increase in private investment has fostered greater competitiveness, reduced the cost of access to space and supported a growing number of solutions that enable space-based technologies, such as Earth Observation (EO), Positioning, Navigation and Timing (PNT), and satellite communications, to benefit sectors including agriculture, urban planning, environmental management, logistics and connectivity. Viewed through the lens of space as a driver of economic development, an increasing number of countries are entering the sector and developing their own programmes. According to the World Economic Forum (WEF), a decade ago, only a few dozen nations had active space programmes. Today, more than 90 countries have launched satellites and 80 space agencies operate worldwide. At the same time, the UN Office for Outer Space Affairs states that nearly 40% of the 169 Sustainable Development Goal (SDG) targets are directly supported by space-based services, demonstrating how closely the space industry aligns with national objectives for socio-economic development.

However, for emerging countries becoming increasingly aware of this opportunity, the question is how they can access the benefits of the sector in a way that is affordable, proportionate to their existing capacity, and responsive to their domestic legislation, key stakeholders and competitive landscape. One response to this challenge can be found in the Foreign Direct Investment (FDI) strategies employed by these countries. FDI strategies enable countries to leverage their competitive advantages, such as geographic location, tax incentives, human capital and other assets, to attract investment into a particular sector. Given the extensive value chain of the space industry, such strategies can enable emerging countries to participate in the sector by building on the assets they already possess, rather than having to develop an entire space ecosystem from scratch. While competitive advantages are important strategic assets, they must be supported by a clear legal framework that fosters investor confidence. Among the areas that countries must address, the role of ADR mechanisms is particularly important, as they can help remove barriers to the flow of foreign investment supporting the development of the sector within the local ecosystem. Furthermore, when an emerging nation enters the space sector, it enters an industry defined by international collaboration, shared infrastructure and inherent jurisdictional complexity.

Satellite missions operate across borders, launch services span multiple legal systems, and data flows through agreements governed by different national frameworks. From the moment they enter the sector, emerging space nations become participants in a global legal environment that requires dispute resolution mechanisms capable of addressing this level of complexity. These barriers are not insurmountable, but they are specific. Understanding them clearly is the first step towards addressing them through ADR.

BARRIER

What it means in practice

ADR as the response

Absence of national space legislation

No licensing framework applied to space-based technologies, no liability regime, no legal certainty for investors

ADR provides a contractually agreed mechanism that does not depend on national space legislation being in place.

Cross-border space transactions

Spanning security sensitivities, conflict of laws, and multi-jurisdictional complexity

DIFC Courts infrastructure acts as an independent and neutral forum designed for the cross-border complexity of the space sector.

When a dispute arises involving a foreign investor, a domestic operator, and assets in orbit, it may be unclear which court has authority.

International commercial arbitration or opt-in jurisdiction clauses (such as the DIFC Courts) resolve this before a dispute arises by having clear dispute resolution clauses and the DIFC Courts’ MSC

Some domestic courts lack judges with space law training and legal professionals with expertise in space related activities

Neutral forums such as the DIFC Courts’ CoS can provide access to relevant space-law expertise regardless of domestic capacity. The MSC’s Panel of Mediators can also include specialists with expertise in the wider space sector, as well as space law.

Jurisdictional ambiguity

Shortage of domestic space law expertise

Alternative Dispute Resolution as Investment Infrastructure and a Tool for Cross-Border Collaboration Redefining ADR in the space economy context In the context of the space economy, ADR performs an important economic function as part of the wider investment infrastructure. For example, a foreign investor or stakeholder considering investment in a spaceport in a country without domestic space legislation is unlikely to be concerned only with how disputes will be resolved once they arise. They will also want confidence that the legal environment is sufficiently stable and predictable, and that any dispute can be resolved fairly, efficiently and through an enforceable process. Before any dispute arises, ADR can therefore provide an important foundation for investor and stakeholder confidence by establishing an agreed framework for the resolution of future disputes through a neutral forum with relevant space-sector expertise. This can help reduce the uncertainty associated with domestic legal systems and complex cross-border projects.

The mechanism that addresses this question, before an investment is made or a space agreement is concluded, and before any dispute arises, is the dispute resolution clause within the agreement. In this sense, ADR functions as part of the legal infrastructure: the clause can designate a neutral, internationally recognised forum, specify the governing law and commit the parties, including domestic operators and foreign actors, to an agreed dispute resolution process that provides a neutral alternative to domestic court proceedings.

Key Principle An ADR clause in a space agreement does not wait for a dispute. It establishes the legal certainty that space actors, whether operating in emerging markets or established legal frameworks, require to engage confidently in the cross-border transactions that define the space industry. This is its primary economic function: not only to resolve conflict after it arises but to prevent legal uncertainty from becoming a barrier to investment and international collaboration in the first place.

The DIFC Courts : A Neutral and Independent Forum for Space Disputes The DIFC Courts’ and Courts’ of Space was conceived as a global initiative rather than a regional one. Its opt-in jurisdiction mechanism, which allows parties from anywhere in the world to agree in writing to submit their disputes to the DIFC Courts, is a key feature that makes it particularly relevant to space nations. An emerging company or agency does not need to be based in the DIFC, have a UAE partner or be located in a country with an established domestic space framework to use the Courts’ of Space or the MSC. The parties need only agree to include an appropriate opt-in clause in their space agreements. This low barrier to access, combined with the quality and neutrality of the forum, is one of the features that makes the Courts’ of Space particularly attractive.

The DIFC Courts’ CoS also reflects a commitment to broad and inclusive participation through its CoS Working Group, which has now been incorporated into the Courts of the Future (CotF) Working Group. This brings together public and private sector experts from across the global space community, including representatives from emerging space nations, to contribute to the development of space dispute resolution frameworks. The CoS is designed to accommodate a wide range of contractual arrangements, depending on the nature of the activity and the parties involved. These may include launch service agreements, satellite manufacturing agreements, licensing agreements, data-sharing agreements, research and development agreements, cooperation agreements, joint ventures and other commercial or operational arrangements relating to space activities worldwide. The following decision tree, adapted from the jurisdictional framework established in Edition 2, guides space actors in determining when the DIFC Courts’ CoS may be an appropriate forum for resolving a space-related dispute.

Does the space dispute involve parties from more than one country?

YES

Cross-border jurisdictional issues may arise. Consider including a dispute resolution clause providing for the DIFC Courts, the MSC or international arbitration, potentially seated in the DIFC

For a domestic dispute, national courts may be sufficient where an appropriate legal framework exists. Where there is no national space legislation, ADR mechanisms such as mediation may still provide an effective alternative.

Does the host country have national space legislation?

YES

National law provides a regulatory framework. ADR may nevertheless be appropriate for cross-border disputes, providing parties with an agreed process and a neutral forum for dispute resolution.

Where national space legislation does not exist, a clear contractual framework can provide greater legal certainty. Parties may opt into the DIFC Courts, use the MSC for mediation, or agree to international arbitration, including with a DIFC seat

Is there a written agreement between the parties specifying the dispute resolution forum?

YES

DIFC Courts Where the parties have validly agreed in writing to submit their dispute to the DIFC Courts, the Courts may exercise opt-in jurisdiction in accordance with the applicable legal framework. Parties may also agree to refer a dispute to the MSC for mediation. In the absence of a written agreement DIFC Courts will only assume jurisdiction if a sufficient connection to the DIFC can be established. This may include situations where one of the parties is based or operates, where the contract has been performed or breached within its jurisdiction, or where relevant assets are located.

YES

International Arbitration

No written forum agreement

Where parties have agreed to arbitration, the role of the DIFC Courts will depend on the terms of the arbitration agreement, the seat of the arbitration and the applicable jurisdictional framework

In the absence of a written forum agreement, the DIFC Courts may exercise jurisdiction only where another jurisdictional gateway under the applicable legal framework is satisfied.

The DIFC Courts provide a comprehensive, multi-layered ADR ecosystem that goes far beyond traditional litigation. For international space actors, the framework outlined below illustrates how the DIFC Courts’ ADR infrastructure operates across its core registries.

Claim Type / Value

DIFC Courts Pathway

ADR Mechanism Embedded

Claims up to AED 500,000 or up to AED 1M by mutual agreement

Small Claims Tribunal (SCT) fast track, simplified procedures

Mediation is embedded within SCT proceedings. Before adjudication, the parties attend a consultation before an SCT Judge, the primary purpose of which is to allow them to attempt to resolve their dispute.

Part 53, Rules of the DIFC Courts

Court of First Instance (CFI)

Under Part 27 of the Rules of the DIFC Courts (RDC), judges actively encourage ADR at case management conferences and may adjourn proceedings to allow parties to pursue mediation. ADR orders may be issued under RDC 27.8.

Part 27, Rules of the DIFC Courts (RDC 27.1 – 27.10)

Claims above AED 500,000

Any dispute, standalone or court- referred

Mediation Service Centre (MSC) dedicated ADR registry

Established by Dubai Law No. (2) of 2025 and Resolution No. 2 of 2025. Fully electronic, globally accessible. Parties select registered mediators; sessions may be conducted in person or virtually. Successful outcomes may be enforced as Mediation Orders.

Relevant Rules

Dubai Law No. (2) of 2025; Resolution No. 2 of 2025; MSC Rules

Illustrative Scenarios: ADR in Practice The following scenarios illustrate how the DIFC Courts resolve the jurisdictional gaps that arise when foreign direct investment or cross-border transactions meet the emerging space economy. These scenarios are illustrative and intended to demonstrate the application of the frameworks discussed in this Edition.

Scenario A: Co-Governance Agreement with Opt-In Clause Jurisdiction Based on Consent Facts: A multinational consortium composed of a private equity investor from Country A, a launch operator from Country B, an aerospace technology provider based in Country C and a domestically incorporated company (“XYZ Company”) in Country X enters into a long-term co-governance agreement for the development and operation of a commercial spaceport. The project involves approximately USD 200 million in foreign direct investment and is structured through a network of interrelated commercial contracts governing financing, operations and technology transfer. The framework agreement establishes English law as the governing law and contains an express clause by which all parties irrevocably agree to submit any disputes to the exclusive jurisdiction of the DIFC Courts.

Dispute: A conflict arises when XYZ Company and the launch operator from Country B change the allocation of launch windows and give preferential treatment to third-party clients. The investor from Country A and the technology provider from Country C allege breach of contract, violation of the co-governance agreement, and significant financial losses. Jurisdictional Issue: The dispute involves multiple jurisdictions and a host state without an adequate legal framework for complex commercial space disputes. Without a valid forum selection clause, the dispute would be exposed to jurisdictional fragmentation and uncertainty. DIFC Courts Solution: Proceedings are initiated before the DIFC CFI. The Court establishes its jurisdiction on the basis of the parties' express and written opt-in clause. The case is administered in accordance with DIFC procedural rules. Under Part 27 of the Rules of the DIFC Courts (RDC), the judge at the Case Management Conference invites the parties to consider whether the dispute, or specific aspects of it, could be resolved through ADR. A Part 27 ADR Order is issued, and the matter is referred to the DIFC Courts MSC. The parties engage in a structured mediation conducted virtually via the MSC's electronic platform. A settlement is reached on the core governance issues, with only quantum remaining for adjudication, significantly reducing the scope and cost of full proceedings. The settlement is formalised in accordance with the MSC Rules and, unless the parties have opted out, operates as a Mediation Order and Enforcement Writ.

Scenario B: Absence of Clause Jurisdiction Based on Connection with the DIFC Facts: A foreign direct investment project is structured through a Special Purpose Vehicle (SPV) incorporated within the DIFC by an international investment fund. The SPV is established as a separate legal entity for the sole purpose of financing and coordinating the development of a satellite ground control facility in Country Y. The project involves contractual relationships between the DIFC-incorporated SPV, an operator from Country E responsible for technical implementation and a service provider from Country L. The relevant agreements, however, do not contain a clear or effective forum selection clause. Dispute: The dispute arises after the operator from Country E fails to comply with key technical and financial obligations, resulting in delays and significant losses for the project. The SPV, as the contractual counterparty and investment vehicle, seeks to recover its losses and enforce the contractual framework against the defaulting party.

Jurisdictional Issue: In the absence of a contractual agreement designating a forum, jurisdiction is uncertain. The dispute spans multiple jurisdictions and reliance on domestic courts in Country Y raises concerns regarding expertise, efficiency, and neutrality in adjudicating complex cross-border space investment disputes.

DIFC Courts Solution: The DIFC-incorporated SPV initiates proceedings before the DIFC Courts. The Court determines that a sufficient jurisdictional nexus exists as the claimant is a legal entity domiciled within the DIFC. Before proceeding to a full case management conference, the SCT Registrar assesses Where the claim falls within the SCT’s jurisdiction, the SCT consultation process applies. Where the claim exceeds the SCT threshold, the matter proceeds to the CFI, where Part 27 ADR mechanisms are available, including the opportunity to engage the DIFC Courts’ MSC.

Scenario C: MSC Standalone Mediation Pre-Litigation ADR for Space Disputes Facts: A sovereign wealth fund from Country X has entered into a satellite component manufacturing agreement with a foreign technology provider. A dispute arises concerning delivery timelines and technical specifications. Neither party wishes to initiate formal litigation; both wish to preserve the commercial relationship and explore a negotiated resolution before positions harden. ADR Pathway – MSC: In the absence of active court proceedings, the parties jointly submit a mediation request to the DIFC Courts’ MSC. Through the MSC's electronic platform, the parties select a registered mediator with expertise in commercial space transactions. Three mediation sessions are conducted virtually. The parties reach a binding settlement, which is formalised as a Mediation Order and enforced via DIFC Courts’ Enforcement Writs in accordance with the Dubai Law, giving the settlement the legal weight of a court judgment without the cost or delay of full proceedings. Significance: This scenario illustrates the MSC's function as a pre-litigation ADR gateway, accessible to parties through a written agreement regardless of whether a dispute has been formally filed, and capable of producing enforceable outcomes integrated within the DIFC Courts’ enforcement architecture.

Conclusion

DIFC Courts Commitment The Courts of Space initiative was established to support the international space community. The opt-in mechanism, the multilingual capability and the CotF Working Group's active engagement with representatives from diverse space nations reflect the CoS's commitment to ensuring that democratising access to space means democratising access to justice in space disputes. The MSC, the SCT and the CFI, with ADR supported through Part 27 where applicable, together form an integrated ADR ecosystem accessible to parties through a written agreement.

Conclusion The global trend towards conducting and investing in space activities is no longer an aspiration; it has become an established and steadily expanding reality. This can be seen in Senegal, where satellite imagery maps flood-prone areas; in the Philippines, where the first dedicated national internet satellite is expanding connectivity to remote communities; and in the Galápagos, where high-precision positioning data monitors endangered species. These are not the projects of space superpowers. They are the projects of nations that decided to participate. What allows actors to become active in the space industry is a legal environment trusted by investors, agencies and international partners. And whether a nation enters the space sector without domestic space legislation or with a comprehensive national framework already in place, it operates within an industry that is inherently cross-border, technically complex and jurisdictionally demanding. In that environment, a key tool available to any space actor, emerging or established, is a well-drafted ADR clause in a well-structured agreement. The DIFC Courts’ opt-in jurisdiction and the MSC give practical effect to that approach. The DIFC Courts provide a neutral, English-language common law forum, while the MSC offers a structured pathway to mediation. Parties from any jurisdiction may access these mechanisms through an appropriate written agreement, subject to the applicable legal and procedural requirements. In this sense, they are instruments of access to justice, helping to ensure that access to space-related dispute resolution is shaped not by the maturity of a domestic legal system, but by the quality of the parties’ agreements.

Space Disputes Guide Edition 3