In-orbit transfer of ownership

For this new Space Law article on Space Legal Issues, let’s focus on the mechanism and consequences of, concerning space objects (especially satellites), the in-orbit transfer of ownership. Let’s focus on Satellite Ownership Transfers and the Liability of the Launching States. A space object may be sold/bought while in outer space. There is no objection by principle to a transfer of registration.

The case of in-orbit transfer of ownership we are studying, is about the original State of registry entering into an agreement with the transferee state, such that the latter is grated jurisdiction over the transferred space object. The original State of registry would have to remove the space object from its national registry and for the transferee state to register the object on its own national registry. That is what happened with both the satellites AsiaSat 1 and 2. The two satellites were removed from the registry of the United Kingdom of Great Britain and registered on the national register of China (technically, it was not a transfer of ownership, but a State succession). The deregistration and reregistration of assets being transferred while in outer space simply included a list of administrative requirement for such transfers.

A Space Object

In order to understand better the in-orbit transfer of ownership, let’s have a look at the concept of space object. The term Object in reference to outer space was first used in 1961 in General Assembly Resolution 1721 (XVI) titled International cooperation in the peaceful uses of outer space to describe any object launched by States into outer space. Professor Bin Cheng, a world authority on International Air and Space Law, has noted that members of the COPUOS during negotiations over the space treaties treated spacecraft and space vehicles as synonymous terms. The Space Object can be considered as the “conventional launcher (ELV)”, the “reusable launcher (RLV)”, the “satellite”, the “orbital station”, the “probe”, the “impactor”, the “space telescope”, the “International Space Station (ISS)”… As Professors Diederiks-Verschoor and Kopal wrote in An Introduction to Space Law, the term space object “is indeed the commonly used expression, but it must always be borne in mind that its exact meaning is still not quite clear”.

An object is defined by the Oxford English Dictionary as “A material thing that can be seen and touched”. The five Onusian treaties don’t use the term satellite, instead opting for “object launched into outer space” in the 1967 Outer Space Treaty or “space object” in the 1972 Liability Convention and the 1976 Registration Convention. The 1967 Outer Space Treaty doesn’t really provide a definition for “object launched into outer space” other than an indication in Article VIII that it includes the “component parts” of the “object launched into outer space”. To add to the mix, Article V of the 1967 Outer Space Treaty uses the term “space vehicle” and the 1968 Rescue Agreement (which is essentially an elaboration of Article V of the OST) uses the term “spacecraft”. A good definition is given by Professor Hobe who write that a “space object is a human made object launched into outer space intended to be used in (as opposed to merely transit through) outer space”.

Let’s remember that “A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose”, article 31 of the Vienna Convention on the Law of Treaties of 1969. In addition, “Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable”, article 32 of the Vienna Convention on the Law of Treaties of 1969.

Let’s recall that a space object causing damage triggers international third-party liability under the Convention on International Liability for Damage Caused by Space Objects (entered into force in September 1972). Article I (d) of which enounces that “the term space object includes component parts of a space object as well as its launch vehicle and parts thereof”. Its Article II adds that “A launching State shall be absolutely liable to pay compensation for damage caused by its space object on the surface of the Earth or to aircraft in flight”.

A space object requires, thanks to the Convention on Registration of Objects Launched into Outer Space (entered into force in September 1976), registration. Article II of which states that “When a space object is launched into Earth orbit or beyond, the launching State shall register the space object by means of an entry in an appropriate registry which it shall maintain. Each launching State shall inform the Secretary-General of the United Nations of the establishment of such a registry”.

Finally, the term space object effectively triggers application of much of both the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (entered into force in October 1967) and the Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space (entered into force in December 1968). Article VII of the first declares that “Each State Party to the Treaty that launches or procures the launching of an object into outer space, including the Moon and other celestial bodies, and each State Party from whose territory or facility an object is launched, is internationally liable for damage to another State Party to the Treaty or to its natural or juridical persons by such object or its component parts on the Earth, in air space or in outer space, including the Moon and other celestial bodies”.

Article 5 of the latter states that “1. Each Contracting Party which receives information or discovers that a space object or its component parts has returned to Earth in territory under its jurisdiction or on the high seas or in any other place not under the jurisdiction of any State, shall notify the launching authority and the Secretary-General of the United Nations. 2. Each Contracting Party having jurisdiction over the territory on which a space object or its component parts has been discovered shall, upon the request of the launching authority and with assistance from that authority if requested, take such steps as it finds practicable to recover the object or component parts. 3. Upon request of the launching authority, objects launched into outer space or their component parts found beyond the territorial limits of the launching authority shall be returned to or held at the disposal of representatives of the launching authority, which shall, upon request, furnish identifying data prior to their return”.

The 1967 Outer Space Treaty doesn’t really provide a definition for “object launched into outer space” other than an indication in Article VIII that it includes the “component parts” of the “object launched into outer space”. It states that “A State Party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body. Ownership of objects launched into outer space, including objects landed or constructed on a celestial body, and of their component parts, is not affected by their presence in outer space or on a celestial body or by their return to the Earth. Such objects or component parts found beyond the limits of the State Party to the Treaty on whose registry they are carried shall be returned to that State Party, which shall, upon request, furnish identifying data prior to their return”. We’ll conclude with the definition given by Professor Hobe who wrote that a “space object is a human made object launched into outer space intended to be used in (as opposed to merely transit through) outer space”.

In-orbit transfer of ownership

Let’s recall that the Article VIII of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (entered into force on October 10, 1967) states that “A State Party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body. Ownership of objects launched into outer space, including objects landed or constructed on a celestial body, and of their component parts, is not affected by their presence in outer space or on a celestial body or by their return to the Earth. Such objects or component parts found beyond the limits of the State Party to the Treaty on whose registry they are carried shall be returned to that State Party, which shall, upon request, furnish identifying data prior to their return”.

Article VI of the aforementioned Treaty enounces that “States Parties to the Treaty shall bear international responsibility for national activities in outer space, including the Moon and other celestial bodies, whether such activities are carried on by governmental agencies or by non-governmental entities, and for assuring that national activities are carried out in conformity with the provisions set forth in the present Treaty. The activities of non-governmental entities in outer space, including the Moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty. When activities are carried on in outer space, including the Moon and other celestial bodies, by an international organization, responsibility for compliance with this Treaty shall be borne both by the international organization and by the States Parties to the Treaty participating in such organization”.

A space object may be sold/bought while in outer space. There is no objection by principle to a transfer of registration. The property is transferred, including the rights and obligations which are connected to property in every legal system. The responsibility for “national activity” according to article VI of the 1967 OST is transferred because it is related to a fact: the link of nationality of the operator. This activity must be authorised and continuously supervised by the “appropriate State”. The liability of the launching State(s) is unchanged as it is related to the time of the launch. The State of the new owner can register and have jurisdiction and control over the object if it is a launching State because of article II of the 1976 Registration Convention (if it is not, it cannot).

Article II of the aforementioned Convention states that “1. When a space object is launched into Earth orbit or beyond, the launching State shall register the space object by means of an entry in an appropriate registry which it shall maintain. Each launching State shall inform the Secretary-General of the United Nations of the establishment of such a registry.

2. Where there are two or more launching States in respect of any such space object, they shall jointly determine which one of them shall register the object in accordance with paragraph 1 of this article, bearing in mind the provisions of article VIII of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, and without prejudice to appropriate agreements concluded or to be concluded among the launching States on jurisdiction and control over the space object and over any personnel thereof.

3. The contents of each registry and the conditions under which it is maintained shall be determined by the State of registry concerned”.

Transfer of ownership of a satellite does not affect the liability regime. Let’s remember that Responsibility concerns national activities whereas Liability concerns the launching State(s), which are “jointly and severely liable”. In this case, Ownership will not have any impact on the Liability. The identification of the launching States is the key to solve the questions of liability in respect of the on-obit transfer of ownership of a satellite However, scope of the launching States is not clear. What about if a state whose national owns a satellite launched from outside its territory shall be regarded as a launching State? Or if a state of registry not concerned with the actual launching shall be regarded as a launching State?

The “original” launching State stays liable even if it cannot in practice have any control over the satellite. Therefore it must control or even block every change of ownership to a foreign person. The State of the “national activity” is responsible according to Article VI of the 1967 OST but cannot register it, cannot have jurisdiction and control over it even if it must authorise and supervise this activity.

While registration is irrelevant to the liability, it is useful to find a launching State especially when the procuring State specifies its name as that of a launching State. However, considering State practice, making a formula of finding a launching State based on the registration would not be a solution. Then, it has to be noted that it is the assured protection of potential victims, not the identification of a launching State itself that counts. Taking note of that prerequisite, it has to be underlined that furnishing information to the UNSG is as useful as registration as far as the identifying the situation concerning a satellite is concerned. That is what we can say about in-orbit transfer of ownership.

Concluding remarks on in-orbit transfer of ownership

Helped by the various kinds of information provided, Governments can ensure that its national will assume third party liability through national legislation in line with the U.N. Treaties on Outer Space as well as the 2004 Application of the concept of the “launching State” and the 2007 Recommendation on enhancing registering space objects. Information provision concerning the multilateral transaction and national legislation will be the solution with respect to the on-orbit transfer of a satellite. That is what we can say about in-orbit transfer of ownership.