The Use of Confidentiality Advisers Under the Permanent Court of Arbitration’s “Optional Rules for Arbitration of Disputes Relating to Outer Space Activities”*

On December 6, 2011, the Permanent Court of Arbitration (PCA) of the International Chamber of Commerce (ICC) issued its “Optional Rules for Arbitration of Disputes Relating to Outer Space Activities” (the Optional Rules).  In large part, the Optional Rules are modeled on the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules[i] developed in 2010, which provide comprehensive procedural rules that parties may agree to apply for the conduct of arbitral proceedings arising out of their commercial relationships and disputes.  However, the Optional Rules contain noteworthy distinctions from the UNCITRAL Arbitration Rules with respect to the treatment of confidential information.[ii]  The Optional Rules address the confidentiality of information in greater detail than the UNCITRAL Arbitration Rules, and offer certain unique provisions designed to safeguard information produced by parties to a dispute in an arbitral proceeding.[iii]  This article examines the specific distinction between the UNCITRAL Arbitration Rules and the Optional Rules with respect to the use of “confidentiality advisers” in arbitral proceedings under the Optional Rules.

Commercial space activity is an emerging, highly technical and proprietary industry, which is driven by rapid technological advancements.  According to a May 19, 2014, report by the Space Foundation,[iv] the global space industry grew to $314.17 billion (USD) in commercial revenue and government budget allocation in 2013, with commercial activity, primarily space products and services and commercial infrastructure, driving much of this growth.[v]

This industry may give rise to a wide range of disputes, including not only activities specifically relating to outer space, but also those relating to the construction of communications satellites, the launching and maintenance of satellites, and the investments underlying these and other space activities.  The Optional Rules were designed to be broad enough to encompass these sorts of disputes, “to reflect the particular characteristics of disputes having an outer space component involving the use of outer space by States, international organizations and private entities.”[vi]  The Optional Rules contain confidentiality provisions to address the unique concerns of an evolving, highly sensitive industry with inherent military and national security implications, demonstrating the flexibility of international arbitration to fashion procedural tools to a particular industry.

Specifically, Article 17(8) of the Optional Rules provides for the appointment of a “confidentiality adviser” as an expert in an arbitral proceeding.  The confidentiality adviser may report to the arbitral tribunal on specific issues involving confidential information, without disclosing the information either to the party from whom the confidential information does not originate or to the arbitral tribunal itself.  This provision is significant and unique, and reflects consideration for the highly proprietary and commercially sensitive nature of the technology being developed for space activities.  Commercial entities in particular may take note of this provision, given the significant expenditures in research and development that underlie space-related technologies, as well as commercial concerns relating to espionage and competitiveness in an emerging and rapidly changing field.  For these reasons, arbitration under the Optional Rules may be more attractive to parties than litigation in national court systems, even where domestic courts have a reputation for even-handed, reliable and efficient justice.

In theory, the provision for “confidentiality advisers” under the Optional Rules provides an attractive benefit to parties in that reflects consideration of a highly specialized, evolving and technical industry.  For example, Article 17(8) may foster greater willingness on the part of parties to produce confidential documents.  In practice, it remains to be seen whether this benefit also may trigger other concerns on behalf of parties in an arbitral proceeding, in light of the potentially disproportionate access to information on the part of confidentiality advisers vis-à-vis the arbitral panel in a particular dispute.

Finally, the use of confidentiality advisers under the Optional Rules may influence the overall development of arbitrator expertise relating to outer space activities.  Given the relatively nascent stage of the global space industry, and the shifting paradigm of space law as a function of rapid technological change, the development of arbitrator expertise in managing disputes relating to outer space activities will be important for the just and efficient resolution of disputes, as well as encouraging parties to make use of arbitration for disputes relating to outer space activities.

*Written by: Elika Eftekhari, Esq., Director of Trade Compliance at USIRCC. This article originally appeared in the April 2016 bulletin of the Centro Especializado de Arbitraje Peruano Arbitration.


[i] See UNCITRAL Arbitration Rules (as revised in 2010), G.A. Res. 61/33, art. 1, U.N. Doc. A/61/33 (Jan. 10, 2011), available at: https://www.uncitral.org/pdf/english/texts/arbitration/arb-rules-revised/arb-rules-revised-2010-e.pdf.

[ii] See Permanent Court of Arbitration, “Optional Rules for Arbitration of Disputes Relating to Outer Space Activities,” (Dec. 6, 2011), available at: http://www.pca-cpa.org/Outer%20Space%20Rules4fd4.pdf?fil_id=1774, at Introduction (i) and (vi); Article 17.

[iii] Id. at Article 17.

[iv] The author of this article has no affiliation with the Space Foundation.

According to its website, the Space Foundation “was founded March 21, 1983, as an IRS 501(c)(3) organization ‘to foster, develop and promote, among the citizens of the United States of America and among other people of the world…a greater understanding and awareness…of the practical and theoretical utilization of space…for the benefit of civilization and the fostering of a peaceful and prosperous world.’…we represent the entire global space community: space agencies; commercial space businesses and associated subcontractors; military, national security and intelligence organizations; cyber security organizations; federal and state government agencies and organizations; research and development facilities; think tanks; educational institutions; space entrepreneurs and private space travel providers; businesses engaged in adapting, manufacturing or selling space technologies for commercial use; and museums, publishers and entertainment media that inspire and educate the general public about space.”  See Space Foundation History, available at: http://www.spacefoundation.org/about/history.

[v] See Space Foundation, “Space Foundation’s 2014 Report Reveals Continued Growth in the Global Space Economy in 2013,” (May 19, 2014), available at: http://www.spacefoundation.org/media/press-releases/space-foundations-2014-report-reveals-continued-growth-global-space-economy.

[vi] See Optional Rules at Introduction (i).

About the author: USIRCC