Authors: Pamela L. Meredith* and Marshall M. Lammers**
Published: December 2013
Description: The commercial satellite industry has come of age since its inception in 1965. Today, the industry consists of numerous satellite operators, large and small, in the United States and internationally – vying for shares of a growing global market for satellite capacity, data, and a variety of services.
Despite substantial consolidation in the U.S. satellite industry over the past decade and relatively few new U.S. entrants in recent years, the need for replacement satellites and satellite fleet expansions nonetheless have resulted in a steady flow of satellite procurements with related transactions, including satellite purchase contracts, launch services agreements, loan facility agreements, satellite transponder leases, and satellite insurance policies. Also contributing to these transactions have been several new satellite operators on the international stage. With the exception of transponder leases, these satellite contracts are typically valued at over $100 million and sometimes even in the billions of dollars.
Disputes arise from time to time over the interpretation of these contracts, e.g., when a launch fails, a satellite is defective, or one party terminates or defaults on the contract. While these disputes are usually settled, occasionally, they end up in arbitration.
*Ms. Meredith chairs the Space Law Practice Group of Zuckert Scoutt & Rasenberger, L.L.P. She represents and advises clients in satellite contract disputes and arbitration and has also served as an expert witness and counsel.
**Mr. Lammers is a counsel in the Space Law Practice Group.