Orbital Congestion and Legal Liability in the Era of Mega-Constellations

By Rajdeep Dutta and Divisha Dalal (LL.M., University of Bristol)

Introduction

With the rapid commercialisation of space, the trajectory of human activity in outer space has undergone a paradigm shift. Subsequent to Sputnik, space was the exclusive domain of sovereign nations motivated by geopolitical prestige and military strategy. However, space is being rapidly democratised and commercialised with private corporations and actors like SpaceX and Amazon deploying infrastructure. Contrarily, this has also resulted in the escalation of space debris incidents, which include the incident in August 2024, when orbital debris impacted Saskatchewan farmland in Canada and in December 2024, a large rocket separation ring landed in Kenya; and in February 2025, debris from a SpaceX rocket landed in Poland, which signals a looming Kessler Syndrome. However, the question more appropriately is, in case debris falls, who is liable for the resulting damage?

This article argues that the current international legal framework, predicated almost exclusively on state liability established during the Cold War, is ill-equipped to address the risks posed by dominant private actors. It examines the Convention on International Liability for Damage Caused by Space Objects 1972, highlights its inadequacies in the face of commercial mega-constellations, and discusses the urgent need to bridge the gap between state obligations and direct corporate accountability.

Kessler Syndrome and the Commercial Rush

As per the European Space Agency’s statistics updated in October 2025, there are estimated to be over 1.2 million objects larger than 1 cm in orbit, capable of causing mission-fatal damage due to orbital velocities exceeding 17,000 mph. Subsequently, the arrival of mega-constellations has fundamentally altered the scale of this issue, with SpaceX’s Starlink alone accounts for more than half of all active satellites orbiting Earth, with plans for tens of thousands more.

Accordingly, the scenario is referred to as Kessler Syndrome, as posited by Donald Kessler, where the density of objects in low earth orbit becomes so high that one collision creates a chain reaction effect, which could render specific orbital belts unusable for generations. An illustration of the same would be the 2009 collision between an active commercial Iridium satellite and a defunct Russian military satellite, creating thousands of pieces of trackable debris.. Consequently, with mega-constellations, the Iridium-Cosmos event may cease to be an anomaly and become a statistical inevitability.

Origin and Present Legal Architecture

Prior to the implementation of the Convention on International Liability for Damage Caused by Space Objects 1972 (Liability Convention), the existing international legal framework governing space activities was the 1967 Outer Space Treaty (OST), which was framed when only states had the capacity to launch objects into orbit and therefore was state-centric.

As per Article VI of the OST, which provides that States bear international responsibility for national activities in outer space, whether such activities are carried on by governmental agencies or by non-governmental entities. and states must authorise and continuously supervise the activities of their private entities.

Accordingly, for the purpose of operationalising liability for damages resulting from these activities, the United Nations Liability Convention, which does not recognise private corporations as subjects of international law and only recognises states, with such liability attaching on a strict basis to the launching state, which a state that launches, procures the launching of a space object, or from whose territory or facility an object is launched.

Consequently, the Liability Convention establishes a two-tiered system wherein, under Article II, a Launching State is absolutely liable to pay compensation for damage caused by its space object on the surface of the Earth or to aircraft in flight. In contrast, space-based incidents like satellite collisions give rise to fault-based liability, where the victim State must prove fault, recognising that orbital mechanics can make accidents genuinely unavoidable as per Article III.

Inadequacies of the Liability Convention

As commercial actors assume a central role in space operations, the inadequacy of the Liability Convention in addressing corporate conduct has become evident, resulting in regulatory gaps that undermine legal certainty and incentivise risk externalisation.

One manifestation of this misalignment arises from the indeterminate definition of the “Launching State” in the context of multinational commercial supply chains. The ambiguity can better be explained with a hypothetical scenario where a satellite owned by a company incorporated in the United Kingdom might be manufactured in France, launched on a United States rocket from a spaceport in New Zealand, which would potentially result in joint liability of all nations, creating a diplomatic quagmire before a private actor is even addressed.

Compounding this issue is the fault-based liability standard in Article III, which is ill-suited on account that proving fault or negligence in outer space is challenging, which is exacerbated by events such as solar flares, micrometeoroid impacts, or software glitches without any negligent human action. Accordingly, if two satellites collide while performing automated avoidance manoeuvres, determining who was at fault involves technical data that companies may be reluctant to share. Additionally, if damage is caused by untraceable debris, there is no identified Launching State to claim against, leaving the victim to absorb the loss.

More fundamentally, the existing legal framework creates a moral hazard by insulating private corporations from direct international liability. Illustration- If a Starlink satellite negligently destroys a foreign weather satellite, the United States government is the respondent in any international claim, not SpaceX. As Article VI of the OST requires the United States to supervise SpaceX, the Liability Convention places the financial burden squarely on the taxpayer in the first instance, allowing private actors to privatise profits derived from utilising orbital resources while socialising the risks.

Aligning International Legal Obligations with Private Accountability Regimes

Given the limitations as mentioned in the preceding paragraphs, there is a necessity to update the Liability Convention to allow for direct claims against private operators. However, amending international space treaties requires consensus in the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS), which is currently paralysed by geopolitical tensions and opening the major treaties for renegotiation is widely viewed as politically impossible in the near term. Consequently, the most efficient remedy between state liability and corporate accountability lies in the implementation of the OST Article VI through national domestic law, as states are ultimately liable internationally, they have a vested interest in regulating their private actors strictly.

States must utilise national licensing regimes to pass the liability burden down to the operator. Leading spacefaring nations, such as the United Kingdom, under the Outer Space Act 1986 and the Space Industry Act 2018, require licensees to indemnify the government against any claims brought under the Liability Convention. Additionally, states must mandate that operators hold third-party liability insurance up to a certain limit (e.g., €60 million in the United Kingdom for standard missions).

Notwithstanding the same, these domestic regimes are inconsistent globally, potentially leading to forum shopping and jurisdictional arbitrage where corporations seek out jurisdictions with lax regulations and low insurance requirements.

Institutional and Regulatory Developments under the European Union Space Act

In response to this risk of regulatory fragmentation, the European Commission's draft European Union Space Act (EU Space Act), released in June 2025, seeks to create unified space regulations across the fragmented landscape of European Union (EU) Member State laws.

The EU Space Act mandates debris mitigation and collision avoidance measures, codifying safety standards to prevent incidents before they trigger liability issues, along with financial responsibility requirements, including the standardisation of operators to maintain third-party insurance, thereby shifting accountability from governments to private actors. Fundamentally, the Regulation extends its reach beyond EU borders, applying to any non-EU company providing services into the European market. However, the Act does not establish any framework or mechanism for claiming compensation, leaving the issue of liability unresolved.

Conclusion

The Liability Convention is at best a relic of the Cold War and is ill-equipped for the new space era defined by private mega-constellations, where corporations aggressively exploit orbital resources for profit. Nonetheless, the catastrophic financial risks remain socialised upon Launching States. Since geopolitical gridlock prevents treaty amendments, the remedy must arise from domestic and regional frameworks.

Initiatives like the United Kingdom’s licensing regime and the EU’s proposed Space Act exemplify the necessary shift, mandating insurance and strict indemnification to codify corporate accountability. In the absence of international harmonisation, however, these regimes threaten to create a new incentive for operators to forum shop states that offer lower levels of safety protection. Consequently, to address this liability gap, nations must enforce the polluter pays principle, effectively deputising private actors as insurers of their own risks.