Mexico: Space Arbitration: Mexico Reportedly Avoids Liability In Satellite Dispute With Eutelsat

On 15 September 2021, the Mexican Ministry of Economy reported that it had successfully defended a claim brought by satellite giant Eutelsat in an arbitration before the International Centre for Settlement of Investment Disputes ("ICSID").

According to media reports, Eutelsat's claim related to the obligation Mexico had imposed on SatMex - which Eutelsat purchased in 2014 - to reserve portions of its satellite spectrum for guard bands and for Government use. The arbitration was reportedly commenced by Eutelsat in August 2017 under the France-Mexico bilateral investment treaty. Relying on the broad protections available in that treaty, Eutelsat had argued that the Government's spectrum allocation obligations discriminated against its investment as compared to competitors. According to the Mexican Government, the tribunal recently dismissed those claims, with costs awarded to Mexico.

Satellites and space operations are projected to increase in a manifold way in the coming years. The industry is also subject to a significant amount of Government regulation, only beginning with the terms by which satellite spectrum is awarded to private operators. Undoubtedly, this will continue to give rise to significant disputes between Governments and private satellite operators (and other space companies), including under the terms of so-called investment protection treaties or bilateral investment treaties. These treaties may provide some space companies with the right to initiate investor-State arbitration against Governments for redress of their alleged rights.

To date, for instance, as is available in the public sphere, satellite-based claims have led to three sets of investor-State arbitration disputes: (a) Eutelsat's claim against Mexico; (b) a series of claims by Mauritian and Singaporean companies against India arising out of the annulment of a satellite lease contract between Devas Multimedia and the Indian-government-owned Antrix Corporation; and (c) claims for satellite interference brought against Egypt by Al Jazeera. Volterra Fietta lawyers have been senior counsel to at least some of the parties in two of those three instances.

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