Hong Kong — a superconnector and one of the best places to offer professional legal services to resolve disputes — has the credentials to become a center for professional services of space commercialization, thus embracing the era of the NewSpace economy, writes Jessica Chen.

Safe landing!

China Central Television's live broadcast was exciting and a relief, as the Shenzhou XX mission crew — comprising three taikonauts whose return was delayed by "tiny cracks" in their original return capsule — touched down in the Inner Mongolia autonomous region on Nov 14.

After spending more than six months in low earth orbit docked to the Tiangong space station, the travelers were supposed to have left the Tiangong space station on Nov 5, but were delayed after the spacecraft absorbed an impact, apparently from a small piece of space debris, rendering the capsule unable to bring them home safely.

"Since everything in low earth orbit moves with high velocity, even a few grams of debris moving at 7.06 kilometers per second has the same destructive force as a hand grenade," said Quentin Parker, director of the Laboratory for Space Research at the University of Hong Kong.

That said, just a lollipop, when floating in space orbit, would be destructive enough to punch a hole in a space station's metal exterior.

Confronting space risks

The Shenzhou XX crew, forced to activate contingency procedures following a suspected debris strike, has reframed talk of how international law, arbitration and mediation systems can cope with the risks and disputes generated by a rapidly expanding space economy.

As megaconstellations proliferate in the low earth orbit, with private actors increasingly financing and operating space infrastructure, questions about liability, enforcement and cross-border dispute resolution have become more urgent for nations, corporations, insurers and regulators alike.

The outer reaches of space are governed by a family of treaties designed in the early era of space exploration. The Outer Space Treaty establishes the shared norm that space activities are to be conducted for peaceful purposes, and that countries bear a shared responsibility for national space activities, says Anthony Neoh, who co-chairs the Asian Academy of International Law (AAIL).

The Liability Convention clarifies that liability for damage caused by space objects typically rests with the launching nation, but only in a framework that's largely nation-centric and often slow to translate into direct remedies for private companies and investors, according to Daniel Lam, former chief executive of eBRAM (Online Dispute Resolution).

Critics argue that while these instruments provide essential guardrails, they do not readily empower private actors to secure prompt compensation or enforce rights when collision-caused damages occur, particularly in a cross-border commercial context. This is precisely the kind of scenario that threaten to make debris incidents more frequent, as the orbital environment gets more crowded with privately funded satellites.

The need for a more direct private-rights approach to debris-related disputes, or at least a robust bridge from national responsibility to private enforcement, remains a central regulatory question that will again push the Hong Kong Special Administrative Region to center stage.

"Hong Kong is a superconnector whose functions go beyond converging funds or brains to problem-solving capacity through a set of effective regulatory and administrative frameworks that's trusted by both worlds," Neoh tells China Daily at his office in a historic building in the heart of the city.

"In Hong Kong, a connector's role encompasses both the ability to liaise and the obligation to implement the social-economic apparatus, making it the best place to provide professional legal services in solving disputes," says Neoh who was called to the English bar in 1976 and began his law practice in 1980 after a distinguished career in the Hong Kong civil service.

He favors the SAR's hosting a title registration center for commercial spacecraft (including satellites) to further elevate its status as an international financial center.

Neoh's experience in the implementation of "one country, two systems" has helped shape Hong Kong's securities market in his capacity as chairman of the Securities and Futures Commission during the SAR's early days. He says the business-driven city can do the work in the commercialization of space with its solid infrastructure in finance and common law practices.

"If the next step is to finance space assets in Hong Kong, having a registered ownership system would be very useful. Hong Kong's geopolitical considerations are also well managed within its commercial environment, and there's broad recognition that Hong Kong has a sound legal framework and robust legal protection."

Neoh said the AAIL has met with different sectors of the community to discuss the issue. Hong Kong, with its enriched track record of success in registration services for commercial ships and aircraft, is well suited to become a fledgling hub for commercial space industries.

"This reflects the unique advantage of 'one country, two systems'," says Neoh — a world-renowned expert in financial regulation and risk management. He said he believes it will not take much time, perhaps five years or less, to make Hong Kong an international title registration center for commercial spacecraft.

First, legislation will need to be passed with support by the central government. Second, the center will need time to be populated by registrations to create commercial critical mass, according to Neoh.

Building legal bridges

Mediation offers a flexible, confidential and faster path to settling complex, multiparty space disputes. Lam and Valentin Uvarov, founder and director of the Russia Research Center for Space Economy and Policy, told a forum in Hong Kong last month that mediation provides a uniform framework to recognize and enforce mediated resolutions across borders, and builds up confidence for private actors to resolve space disputes without resorting to protracted litigation.

The forum, titled "The Gravity of Law: Arbitration's Role in the NewSpace Era", was jointly organized by the Orion Astropreneur Space Academy and AAIL, marking a fresh step by business and legal circles to embrace the NewSpace economy.

For space investments and restructuring scenarios, mediation can be a particularly valuable tool to salvage viable business models and preserve critical services like satellite communications during times of financial stress.

The International Organization for Mediation (IOMed), which officially launched in Hong Kong in May, marked a bold step by the SAR to provide trustworthy value-added alternative dispute resolution (ADR) services. The city's legal and financial infrastructure, built on common-law traditions, deep liquidity, sophisticated capital markets, and a longstanding arbitration culture, positions itself as a natural hub for space ADR activity in Asia, Uvarov said.

Neoh says that by developing a dedicated space-arbitration track within regional arbitration centers, training specialized panels and aligning insurance, securitization, and dispute-resolution practices, Hong Kong could facilitate cross-border space disputes and restructurings, bridging the Chinese mainland's space ambitions with global markets.

"A very good starting point is this year's Policy Address, which emphasizes the development of the space economy in Hong Kong," says Zhao Yun, professor of law at the University of Hong Kong and representative of the Regional Office for Asia and the Pacific at the Hague Conference on Private International Law. He noted that, as some local NGOs are beginning to advocate for the concept of the space economy, it would be advisable for the city to bid to host the International Astronautical Congress — a major annual event that covers all aspects of space-related issues, including a space law symposium.

An SAR government source said Hong Kong is building an international law center in the Wan Chai district, adjacent to the IOMed headquarters — a Grade-2 historic building constructed in 1932. According to the source, there will be a place dedicated to space-law services.

Professionals and legislators who have been prominent advocates of Hong Kong's space economy say the region's strength lies not in launching rockets, but in leveraging intellectual property, financial services, and regulations to de-risk space investments. The point underscores the need for regulatory clarity and a capable framework to attract patient capital and enable blockchain-enabled asset tokenization, as well as real-world financing tools.

Neoh and veteran lawmaker Regina Ip Lau Suk-yee say a long-term strategy is expected to be hammered out to connect the low-earth-orbit economy initiatives with Hong Kong's financial ecosystem, allowing the city to serve as a global intermediary for space finance and risk transfer.

They call for Hong Kong to be made a space dispute resolution center. Neoh says the urgency to integrate space-law curricula into universities and professional training programs, and create standardized ADR clauses is tailored to space agreements.

Multidisciplinary expertise — lawyers, engineers, policy-makers and space scientists — need to address disputes concerning debris, ownership and operational liability.

The modern space economy requires integrated education, cross-border collaboration, and new governance structures, including possible regional collaboration networks and dedicated expert panels, to advise arbitrators and judges, says Lam.

Industry practitioners and potential investors, meanwhile, stress the practicalities of space insurance in an era of crowded orbits and rising debris. The exponential growth in space debris has aroused global attention on the possible "Kessler syndrome", a theoretical scenario in which the number of objects in low earth orbit becomes so high that the probability of collisions increases, leading to a cascading effect of a self-perpetuating cycle of collisions.

"Humanity has roughly a 10?year window to take coordinated action and avoid the mutual destruction caused by the Kessler syndrome," Parker said, emphasizing Hong Kong's potential as a trusted hub for international space law and alternative solutions.

"The NewSpace industry and commercialization of space demand clearer responsibility allocation, robust data sharing and prelaunch risk disclosures," says Mahesh Harilela, family council convenor of the Harilela Group — an investor who has been watching the NewSpace economy.

The Shenzhou XX's delayed return turns out to be a current-case example of why an evolved, multifaceted dispute resolution regime is essential for a space economy that's both increasingly commercial and globally interconnected.

"On Earth, we have national boundaries. But, in space, where is the boundary?" asks Lam.

There's already a consensus among politicians and academia that Hong Kong and the broader Asia-Pacific region can play a pivotal role in building the space ecosystem, and turning legal and financial infrastructure into real competitive advantage for space investment and innovation.

Contact the writer at jessicachen@chinadailyhk.com