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Risk management in Arianespace space launch agreements

Julian Hermida

synopsis

 

I.                     Introduction

 

II.                 Space Risk Management

 

A.               First Party Risks

 

B.                Second Party Risks

 

1.         International Liability Risks

 

1.1          First Layer

                 

1.2          Second Layer

 

2.         Property Risks

 

              C.        Third Party Risks                

             

1.           First Layer: Insurance

                 

1.1         Purpose

 

1.2         Acquisition of Insurance

 

1.3         Type of Insurance

 

1.4         Damage

 

1.5         Beneficiaries

 

1.6         Period

 

1.7         Insurance Cap

 

2.           Second Layer: Government Indemnification

 

III.      Conclusion         

________________________________________________________________

 

I.       Introduction

 

S

pace risk management, or the process for identifying and addressing loss exposures of all kinds, constitutes one of the most important aspects of any commercial space transaction. In effect, its analysis is highly relevant in financing commercial space business ventures, as well as for insurance, contractual and even institutional purposes. In this article we examine the way the so-called legal space risks are managed in commercial launch services provided by Arianespace.

 

 

II.     Space Risk Management

 

              Space risk management involves the executive functions of planning, organizing, leading and controlling the factors associated with risk exposure by an entity engaged in commercial space endeavors. As in most activities, risk management in commercial space transportation entails basically the following elements: (i) risk identification, (ii) risk assessment, (iii) risk control, and (iv) risk financing.[1]

 

              The nature of risks deriving from a space endeavor is varied. They include political, market, technical and legal risks. Succinctly, legal space risks represent exposure to situations connected with a space endeavor which may generate liability, in particular the obligation to compensate damages. These risks encompass (i) the so-called risks among participants or first-party risks, (ii) second-party risks and (iii) third party risks. First party risks imply the possibility of causing damages to the participants' space objects, i.e., the space vehicle in the case of the launch company or the payload in case of the customer, and to the participants' personnel resulting from the launch activity. Second party risks constitute risks to certain related entities which, although they do not participate directly in the space activity, are all the same exposed to some risks. In the case of launches carried out by Arianespace, these are basically risks to the French government, CNES, the European Space Agency and ESA's member states, risks which originated in particular because of the use of launch facilities and related range services and because of the consequences derived from international Space Law liability norms.[2] Third party risks refer to the possibility of damages caused to persons and property thoroughly unrelated to the operation. These may include, for example, persons and property that did not participate in any manner in the space launch, such as the victims of the Long March accidents in the mid 1990’s.[3]

 

A.        First Party Risks

 

              First party risks are assumed by each party, by means of reciprocal waivers of liability. These are always included in the launch services agreement and trace their origin to the reciprocal waivers of liability first adopted by NASA.[4] They are generally drafted as follows:

 

"Each Party shall bear any and all loss of or damage to property and any bodily harm (including death) and all consequences, whether direct or indirect, of such loss, damage or bodily harm, (including death), and/or of a Launch Mission failure and/or of a Satellite Mission Failure, which it or its Associates may sustain that arises in any way in connection with this Agreement, or the performance of this Agreement. Each Party irrevocably agrees to a no-fault, no subrogation, interparty waiver of liability, and waives the right to make any claims or to initiate any proceedings whether judicial, arbitral, administrative on this account against the other Party or that other Party's Associates for any reason whatsoever.

 

              "Each Party agrees to bear the financial and any other consequence of such loss, damage or bodily harm (including death), and/or of a Launch Mission failure and/or of a Satellite Mission Failure, which it or its Associates may sustain, without recourse against the other Party or the other Party's Associates.

 

"In the event that one or more Associates of a Party shall proceed against the other Party and/or that Party's Associates as a result of such loss, damage or bodily harm (including death), and/or of a Launch Mission failure and/or of a Satellite Mission Failure, the first Party shall indemnify, hold harmless, dispose of any claim, and defend, when not contrary to the governing rules of procedure, any liability and expense, including attorneys' fees, on account of such loss, damage or bodily harm (including death), and/or of a Launch Mission failure and/or of a Satellite Mission Failure and shall pay all expenses and satisfy all judgments and awards which may be incurred or rendered against that other Party and/or its Associates."

 

              As can be gathered from the quoted clause of the agreement, these waivers of liability consist of (i) a general assumption of risks by each party, (ii) the assumption of the consequences of those risks, (iii) a consequent waiver of rights to make a claim for liability, (iv) a waiver for the consequences of the losses suffered, and (v) an indemnification or hold harmless provision in case of actions filed despite the waiver.

 

              The objectives sought by the reciprocal waivers of liability are basically to limit the claims that might arise from a launch, and to eliminate, or at least reduce, the necessity to obtain property and casualty insurance to protect against claims which may otherwise derive from the launch.[5] Since it is more frequent for a carrier to cause damages to its customer rather than the reverse, i.e., damages caused by the satellite to the space vehicle, the reciprocal waivers of liability act as a mechanism for the transfer of first party risks to the customers, thus exempting the launch provider from damages which it causes. In practice, this ACTS as an exclusion of liability, which constitutes an exception to the fault principle of the French civil law.[6]

 

              The scope of reciprocal waivers of liability is quite broad, for they include (i) damage to property, (ii) bodily harm, (iii) death, (iv) all their consequences, (v) Launch Mission failure, and (vi) Satellite Mission Failure. The waivers of liability used in Arianespace launch services agreements also cover contractual losses. In effect, they include Launch Mission failure, i.e., the impossibility of placing the satellite in the agreed upon orbit due to problems caused by the space vehicle or the launch itself, and Satellite Mission Failure, i.e., risks of causing damage to the satellite which may impede it to attain the intended orbit or operate successfully in it.

 

              As mentioned above, the reciprocal waivers of liability comprise a no-fault, no subrogation, interparty waiver of liability, and an indemnification provision in the event that a claim is nonetheless filed. The former implies that neither party may make any claims or initiate any proceedings not only judicial but also arbitral or administrative based on any reason or event connected to the agreement. Since the waiver is a no fault- type the parties may not allege fault on the other party to base a claim. It is not clear, however, whether a party to an Arianespace agreement could file a claim based on willful misconduct or even gross negligence (faute lourde). A non-subrogation waiver means that a third party, mainly the insurance company or a financial institution which, for example, provided funding to the payload, may not place itself in the parties' position and make a claim to the party causing damage based on the rights assigned to it.

 

              The indemnification provision for claims filed despite restriction of waivers of liability stems from the fact that clauses whose object is the exoneration of responsibility in cases of bodily injury are prohibited under French Law.[7] Therefore, in the event that, for example, employees of the customer suffer physical damages or even death they or their heirs could file a claim before the French courts, which would be admitted despite the waiver of liability contained in the launch services agreement. In such a case, the launch carrier could be condemned to pay damages to that employee or their heirs. If so, the carrier could, in turn, recover damages so paid from its customer by invoking the indemnification and hold harmless provision of the agreement.

 

              The reciprocal waivers of liability encompass both Arianespace and its associates and the satellite owner and its associates. The term associate is defined as the personnel, the contractors and subcontractors of the launch company and the satellite owner. Therefore, in the event of an accident triggered by a component of the satellite, Arianespace would be precluded from making a claim against its customer contractor or subcontractor that manufactured the part which caused the accident. At the same time, if an accident causes damage to the satellite and the cause of that accident is found to be a device in the Ariane, the satellite owner may not bring a claim against Arianespace's contractor or subcontractor that produced said device.

 

              This liability-waiver scheme is further complemented by obliging each party to the agreement to make its contractors and subcontractors execute reciprocal waivers of liability so that they will also be banned from filing claims in the event of an accident. This is generally drafted in Arianespace launch services agreement as follows:

 

"Each Party obligates itself to take all necessary and reasonable steps to foreclose claims for loss, damage or bodily harm (including death) by any participant in the launch activity. Each Party shall require its Associates to agree to a no-fault, no subrogation, inter-party waiver of liability and indemnity for loss, damage or bodily harm (including death) its Associates sustain identical to the Parties' undertaking under this Article ... of the Agreement..."

 

              This so called flow-down waiver of liability was modeled after NASA's extension of their waivers of liability following the Western Union launch failure.[8] While it is clear that each party to the agreement is obliged to avoid claims made by other participants, mainly contractors and subcontractors, to the other party and to execute waivers of liability so that they will not sue the other party, it is not clear whether a party may sue its own associates. This possibility which is not forbidden in the United States systems would seem banned by the wording of the flow-down provision, which differs slightly from the ones used by NASA and US private sector companies.[9]

 

B.        Second Party Risks

 

              As examined above, second party risks may be divided into risks derived from international Space Law liability norms called International Liability Risks and risks to the owners or other right-holders of the launch facilities and related range services. The latter are called Property Risks.

 

1.         International Liability Risks

 

              Second party international liability risks involve Arianespace, the European Space Agency, its member states and the French government. They refer to the possibility of these governmental and supra-governmental entities' being considered launching states and therefore liable pursuant to the Liability Convention.[10] These risks are distributed on a two-layered basis, where Arianespace assumes liability up to 400,000,000 French francs through insurance and the French government bears all liability claims above that level by means of governmental indemnification.

 

              1.1              First Layer

 

              Participants in the Production Declaration requested Arianespace to undertake to reimburse the French Government within a ceiling of 400 million French francs per launch, the amount of any damages it may be required to pay in case of damages caused by Ariane launches rendered by Arianespace to third parties to such launches.[11] This assumption of liability by Arianespace is implemented through a reimbursement of costs to the French government for compensation it may have paid in the event of proceedings initiated for damages caused by Arianespace to third parties if the French government, ESA or its member states were considered launching states and thus held liable for said damages. In this case, Arianespace does not have to pay directly to the victims but has to refund the French government any compensation actually paid by it to third parties or to ESA or its member states if the Agency or its members paid a compensation to the victims of the accident if they were deemed launching states. The cap on the reimbursement has been set on a per launch basis. Thus, even if, for example, Ariane carries two payloads in a single launch which causes damages to third parties, Arianespace will still have to reimburse up to 400,000,000 French francs.

 

              It is worthy to note that the Declaration is silent as to whether the compensation which Arianespace has to reimburse may include reasonable attorneys' fees or only actual compensation paid to the victims. In our opinion, since there are no restrictions or limitations in the text of the Declaration it is reasonable to hold that attorneys' fees should be considered included within the obligation to reimburse. Thus, for example, if a launch service provided by Arianespace causes damages to foreign persons thoroughly unrelated to the launch and a judgment is passed condemning the French government and ESA, together with its members, to pay compensation in the amount of 200,000,000 French francs and court costs and attorneys' fees of 50,000,000 French francs, Arianespace should reimburse the French government 250,000,000 French francs.

 

              There is no procedure for reimbursement of the compensation. Neither is there a term. We understand, however, that Arianespace should refund the compensation to the French government immediately or at least as soon as practically feasible. Another important aspect which is worth highlighting is the fact that the Declaration does not expressly deal with the kind of claims paid by the French government which Arianespace has to reimburse. In this regard, the Declaration does not foresee, for example, whether the compensation paid by the French government that triggers off Arianespace's reimbursement obligations must arise from a final and definitive judgment or if, for example, the French government may or may not settle a claim in any amount and seek reimbursement from Arianespace.

 

1.2           Second Layer

              According to the Production Declaration, in the event of a claim made by the victims of damages caused by Ariane launches, the French Government will be responsible for the payment of any damages that may be awarded.[12] This assumption of liability implies a governmental indemnification granted by the French state, which has been loosely modeled after NASA's indemnification. The quoted article of the Production Declaration is silent as to the floor and ceiling of this governmental indemnification. However, a thorough analysis of the Declaration indicates that since Arianespace is obliged to face all claims up to 400,000,000 French francs through insurance, the indemnification granted by the French government operates in practice as from that level upwards. Additionally, since there is no cap it may be concluded that the French government has volunteered to indemnify the maximum possible loss, i.e., all claims which may arise from the launch regardless of the aggregate amount and their likelihood of occurrence. Therefore, Arianespace assumes liability for what is considered maximum probable loss, i.e., 400,000,000 French francs, and the government assumes the potential but extremely unlikely maximum possible loss.

 

              According to Lafferranderie, the beneficiaries of the indemnification are the member states of the Agency, whether or not they participate in the production phase of the Ariane.[13] We disagree with Lafferranderie, for there are no limitations regarding beneficiaries in either article V.1 or elsewhere in the Declaration. In effect, the article in question simply puts forward that the French government will have to bear the compensation of damages. This commitment should be construed as benefiting all entities which the Declaration addresses itself to. Consequently, the assumption of liability made by the French government includes not only ESA's member states, but also ESA itself and Arianespace.

 

2.         Property Risks

 

              In order to distribute this category of second party risks, the ESA and Arianespace signed a Convention on May 15, 1981[14] - extended on September 24, 1992 - whichh aimed at putting into practice the principles of the Production Declaration. The Convention establishes risk-distribution provisions for two hypotheses: (i) damages caused by Arianespace to the ESA and (ii) damages caused by the ESA to Arianespace.

 

              With respect to the former, Arianespace is held liable for all damages caused by it or third parties to the ESA’s goods (or to participant states) that have been at its disposal. In effect, whenever Arianespace causes damages to the Agency's launch site it will have to assume liability and pay for all damages it produces. This is also true with regard to damages caused by third parties to the Agency. Within the meaning of the Convention, a third party would include Arianespace's customer and CNES, among others. Thus, in event that the satellite causes damages to the Agency's launch facilities Arianespace will assume the risks vis à vis the Agency. In order to manage these risks assumed by Arianespace, the launch carrier takes out insurance and passes the cost of this insurance to its customers. This insurance covers what Arianespace considers is the maximum probable loss that the ESA may suffer in a launch: 400,000,000 French francs. Therefore in the launch services agreement Arianespace includes the following language in the clause dealing with insurance requirements, which is fully analyzed below. Suffice it here to quote the relevant part of this clause. It generally reads as follows:

 

“Arianespace shall, for the Launch, take out an occurrence basis type insurance policy at Customer's cost to protect itself and Customer against liability for property and bodily harm which Third Parties may sustain and which are caused by the Combined Space Vehicle or part thereof. In said insurance policy the natural and corporate bodies hereafter shall be named as assured: “...”4. The European Space Agency "E.S.A.", but only in its capacity as owner of certain facility and/or outfits located in the Centre Spatial Guyanais in Kourou and made available to Arianespace and/or C.N.E.S. for the purpose of the preparation and the execution of the launches...”

 

              Notice that this insurance policy is included within the general insurance policy that Arianespace takes out. In that insurance, Arianespace has to extend protection to the ESA for damages to its facilities, but there is no need to acquire a new and separate policy to cover these risks. This, nonetheless, increases the price of the policy for the customer, who is ultimately forced to assume through this insurance the cost of holding the ESA harmless for the damages it, Arianespace or CNES may cause to the ESA.

 

              With regard to damages caused by the ESA to Arianespace, the launch services provider has agreed to assume these risks and bear all damages. Indeed, it gave up making any claims to the ESA for damages it may suffer which are caused by the use of the Agency’s goods.

 

C.        Third Party Risks

 

              Third party risks are distributed in Arianespace launch services agreements on a two-layered basis. In the first level, Arianespace requires the customer to assume the risks up to the amount of 400 million French francs through insurance taken by Arianespace and paid for by the customer. In the second level, the French government provides full indemnification to Arianespace above 400 million French francs.

 

1.         First Layer: Insurance

 

              Due to the importance of this clause in the Arianespace agreements, it is worth quoting the language generally used by the French carrier:

 

"Arianespace shall, for the Launch, take out an occurrence basis type insurance policy at Customer's cost to protect itself and Customer against liability for property and bodily harm which Third Parties may sustain and which are caused by the Combined Space Vehicle or part thereof. In said insurance policy the natural and corporate bodies hereafter shall be named as assured:

 

1. The government of France

 

2. The Centre National d'Etudes Spatiales "C.N.E.S." and any launching state as per Convention of March 29, 1972 related to the international liability damage caused by spacecraft.

 

3. The auxiliaries of any kind, whom Arianespace and/or the C.N.E.S. would call for in view of the preparation and execution of the launching operations.

 

4. The European Space Agency "E.S.A.", but only in its capacity as owner of certain facility and/or outfits located in the Centre Spatial Guyanais in Kourou and made available to Arianespace and/or C.N.E.S. for the purpose of the preparation and the execution of the launches.

 

5. The firms, who have participated in the design and/or in the execution and/or who have provided the components of the Launch Vehicle, of its support equipment including propellants and other products either liquid or gaseous necessary for the functioning of the said Launch Vehicle, their contractors, subcontractors and suppliers.

 

6. Customer and Third Party Customer(s) of Arianespace on whose behalf Arianespace executes the launch services as well as their co-contractors and subcontractors.

 

7. When they act in the scope of their activities, the Officers and Directors, the legal representatives, the Managing Director, the employees, agents, as well as the interim staff employed by Arianespace or by the Assured mentioned in hereabove Paragraph 1 to 6 (included).

 

Said insurance coverage shall come into effect as of the day of the Launch, and shall be maintained for thirty-six (36) months or for so long as all or part of the Combined Space Vehicle remains in orbit, whichever period is shorter.

 

The insurance policy shall be taken out in the amount of 400,000,000 French francs.[15]

 

              1.1               Purpose

 

              As can be seen in the above quoted clause, it is Arianespace that undertakes to procure the insurance to protect from third party liability, but it is the customer that actually has to pay for it. The reason for this mechanism lies in the fact that the space insurance industry has proven to be quite volatile. Indeed, space insurance is a "specialty line and only a relatively small community within the totality of the insurance industry is actively involved in providing insurance for space launches."[16] In the early 1980's, right before the risk allocation system for Arianespace was conceived, the space insurance industry suffered a number of serious losses due to launch failures and the loss of payloads.[17]

 

              1.2               Acquisition of Insurance

 

              In light of these characteristics of the space insurance market, it is believed that if Arianespace directly negotiates the premiums for its customers with the insurance companies it may obtain better prices than if satellite operators individually intend to procure space insurance. This is especially so in the case of start up, small companies or companies from developing countries with little experience negotiating with the space insurance industry. Additionally, this is beneficial for all satellite companies in the event of a crisis of the space insurance market, which, as analyzed above, may occur somewhat frequently. Unlike NASA, Arianespace has no authority to waive the cost of the insurance to certain entities that find it more difficult to obtain insurance, either because of their financial situation or because of market conditions.[18]

 

              1.3               Type of Insurance

 

              The kind of insurance contemplated in the launch services agreement is an occurrence type, i.e., that insurance which requires notice of a reportable occurrence to the insurer as soon as practicable. Within the meaning of insurance, an occurrence is an incident which is sufficiently serious to lead the insured to believe that it might give rise to a claim for damages covered by the policy.

 

              1.4               Damage

 

              The insurance has to protect against liability for property and bodily harm that may be suffered by third parties. Although not always expressly mentioned in the launch services agreement, it is obvious that liability for death also has to be covered by the insurance. Under the quoted section of the agreement, liability, which should be covered in the insurance, is that caused by the combined space vehicle, i.e., the Ariane, the payload assist module, and their parts.

 

              1.5               Beneficiaries

 

              Apart from certain entities such as the French government, CNES or ESA fully analyzed within the category of second party risks, the insurance policy has to include as insured Arianespace, the customer, companies which participated in the design and execution, or companies that provided certain components to the launch vehicle, and the contractors and subcontractors of the customer and Arianespace. It is worth recalling that contractors and subcontractors are protected against claims which may be filed against them on the grounds of the product liability theory.

 

              Although not specifically mentioned, suppliers of the customer should also be named as insured. Indeed, the agreements generally establish that the suppliers of the launch company should be included in the insurance policy. However, we understand that the spirit of this provision extends to all suppliers of component parts of the satellite. In effect, we are of the view that the concept of supplier is included within the meaning of the phrase "contractors and subcontractors."

 

              According to the quoted article, the insurance will also include as additional insured the officers, directors, legal representatives, managing director, employees, agents and interim staff of Arianespace and the customer and their contractors and subcontractors. In order to be covered by the policy, these people must have acted in the scope of their activities at the time of the occurrence of the accident which caused damages. It is to be noted that this policy does not qualify as life insurance for these people. In actuality, it protects them from liability claims made by third parties.

 

              1.6               Period

 

              The effective period of the insurance coverage commences with the launch and ends at the earlier of the end of the thirty-sixth month as from the launch, or as long as a part or all of the combined space launch vehicle is in orbit.[19] Controversies may arise for the determination of the moment when the space vehicle, or rather a component part, ceases to be in orbit. Since a part of a launch vehicle, or any other space object for that matter, may remain in outer space for years it is sometimes difficult to determine the moment when the insurance coverage has ended. Following Mireille Couston, if the satellite causes damages to a third party once the insurance policy has expired, the customer will have to face these damages.[20] Indeed, for example, in the event OF an accident occurring after the thirty-sixth month period where debris from the satellite cause damages to a third person on Earth, the customer will have to compensate these damages. In the author’s opinion, however, the customer will only have to pay for damages up to 400,000,000 French Francs, for the governmental indemnification covers any claim above that amount.

 

              1.7               Insurance Cap

 

              The insurance requirements have been capped at the amount of  400,000,000 French francs. In effect, Arianespace has to hire an insurance policy of only 400,000,000 Ff. According to a statement made by Douglas A. Heydon before the US House of Representatives, the historical basis for Arianespace's requiring the customer to obtain 400,000,000 French francs coverage is simply that when Arianespace began writing its first contracts the only model available was NASA. At that time, in the 1970's, NASA required a coverage of US$ 100,000,000. The French Franc was four to the dollar, which equaled 400,000,000 French francs. [21]

 

2.         Second Layer: Government Indemnification

 

              Claims for third party liability which exceed 400,000,000 French francs are assumed by the French government through indemnification. In effect, following NASA's distribution of risks and assignment of liability system, in the event of a claim by a third party filed against the user, Arianespace takes full responsibility for these risks and agrees to cover its customers. In turn, the French government has undertaken to hold Arianespace harmless from all these claims exceeding 400,000,000 French francs.[22]

 

              As in the NASA system, governmental indemnification constitutes a fundamental risk-sharing instrument aimed at protecting Arianespace's customers for claims above the level of insurance. Through this indemnification the customer is relieved from the risks of having to face claims above 400,000,000 French francs. This indemnification does not presently cost a single Franc to French taxpayers, for the government will only have to make a payment in the event of a catastrophic accident, which is rather unlikely to occur.

 

III.      Conclusion

 

              In light of the risks which commercial space launches entail, risk management has achieved considerable significance in the space industry. In the commercial space launch sector the risk-allocation system, in particular the management of legal space risks, has become quite standardized and highly regulated, thus allowing practically no possibility of deviating from the system stemming from this regulation. Under the Arianespace risk-sharing regime the management of legal risks is limited to the prescriptions of agreements executed at the national and Agency levels and the provisions of the contracts, which are neither easily nor frequently modified by the participants.

 

              The above analysis has shown that the first-party regime is quite comprehensive and it is characterized by the transfer of risk to the user and by the launcher's limitation of liability. However, the third party regime places the customer in a very advantageous position, especially given the low levels of liability insurance required. The second party regime provides a favorable situation for both the launcher and the carrier as a result of the assumption of liability by the French government motivated by its desire to maintain French leadership in space.

 

 

 

 

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[1] . J. Trieschmann, R. Gustavson & G. Sandra, Risk Management & Insurance, 9th ed. (Cincinatti: South Western College Publishing, 1995) at 4.

[2] D. Maniatis, "The Law Governing Liability for Damage Caused by Space Objects: From State Responsibility to Private Liability", (1997) XXII Ann. Air & Sp. L. at 373; B. A. Hurwitz, State Liability for Outer Space Activities (Dordrecht: Martinus Nijhoff, 1992) at 39; B. Cheng, Studies in International Space Law (Oxford: Clarendon Press, 1997) at 330; M. D. Forkosch, Outer Space and Legal Liability (Dordrecht: Martinus Nijhoff, 1982) at 48.

[3]V. Kayser, Legal Aspects of Private Launch Services in the United States, (LL.M., Thesis, McGill University, 1991) [unpublished], at 136.

[4] J. Hermida, Norms governing launch services by NASA and commercial US private companies, (LL.D. Thesis, Catholic University of Cordoba, Doctorate of Laws Thesis 2000) at 126 [unpublished].

[5] These objectives are also the same ones sought by NASA and the US private industry for the implementation of the US first party risk- distribution system.

[6] M. Couston, Droit Spatial Economique (Paris: SIDES, 1994) at 245.

[7]E. Loquin, "La gestion contractuelle des risques de l'exploitation commerciale de l'espace", in P. Kahn, ed., L'Exploitation commerciale de l'espace: droit positif, droit prospectif, (Dijon: Litec Credimi, 1992) at 173.

[8] P. D. Bostwick, “Liability of Aerospace Manufacturers: MacPherson v. Buick Sputters into the Space Age”, (1994) 22 J.Sp.L. at 80.

[9]In these latter cases, it is unquestionable that the prohibition to make claims is restricted only to the contractors and subcontractors of the other party, thus allowing one party to sue its own contractors and subcontractors.

[10] Convention on the International Liability for Damage Caused by Space Objects, March 29, 1972, 961 U.N.T.S. 187, 24 U.ST. 2389, T.I.A.S. No. 7762 [hereinafter the “Liability Convention”].

[11]Declaration by Certain European Governments Relating to the Ariane Launcher Production Phase signed by states participating in the Ariane production phase, VOL.II-BIS/G02V [hereinafter the “Production Declaraion”], article 3.8. This Declaration, engineered by the French government, entered into force in April 14, 1980 and was signed by states participating in the Ariane production phase.  According to the Declaration, the participants decided to entrust an industrial structure, Arianespace, with the execution of the Ariane launcher production phase. The objective of this production phase was to meet the launch requirements of the world market subject only to the following conditions: (i) that it should be carried out for peaceful purposes in conformity with the ESA Convention and the Outer Space Treaty, and (ii) that ESA and the participant states should have priority over third party customers. Arianespace was thus assigned the manufacture, marketing and launch of the Ariane launchers.

[12]Declaration by Certain European Governments Relating to the Ariane Launcher Production Phase signed by states participating in the Ariane production phase, VOL.II-BIS/G02V, article 4.1 [hereinafter the “Convention”].

[13]G. Lafferranderie, "Responsabilité juridique internationale et activités de lancement d'objets spatiaux au CSG", (1994) 80 ESA Bulletin at 58.

[14] Convention between ESA and Arianespace signed May 15, 1981, ESA/C(81)11.

[15] STANDARD ARIANESPACE LAUNCH SERVICES AGREEMENT (SAMPLE), (UNDATED), [UNPUBLISHED].

[16]Commercial Space Launch Act Amendment of 1988, Report of the Senate Committee on Commerce, Science and Transportation on H.R. 4399, SR 100-593, Oct. 7, 1988, US Government Printing Office, Washington, 1988 at 14.

[17] Bender, R., Space Transport Liability: National and International Aspects (The Hague: Martinus Nijhoff, 1995) at 132.

[18]J. Hermida, Commercial Space Law: International, National and Contractual Aspects (Buenos Aires: Ediciones Depalma, 1997) at 206.

[19] A. A. Cocca, “Prospective Space Law”, (1998) 26 J.Sp.L. at. 52.

[20] Couston, supra note 6 at 249.

[21] Subcommittee on Space Science Applications of the Committee on Space Science and Technology, US House of Representatives, 100th Congress 2nd Session, February 16, 17, 1988, US Government Printing Office, 1988 at 285.

[22]W. Thomas, “Launch Service Contracts”, 29 ESA Bulletin at 50.