UN Outer Space Treaties and Soft Law

The international legal framework for space activities is of considerable influence on the legal and regulatory environment in Japan. Japan has ratified or acceded to the four United Nations treaties on outer space:

• the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (the Outer Space Treaty);
• the Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space (the Rescue Agreement);
• the Convention on International Liability for Damage Caused by Space Objects (the Liability Convention); and
• the Convention on Registration of Objects Launched into Outer Space (the Registration Convention).

In contrast, Japan has not ratified or acceded to the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (the Moon Agreement), under which private ownership of the Moon and other celestial bodies and their natural resources is prohibited.

The Japanese government also respects non-binding principles and declarations (so called “soft laws”) established by international organisations, such as the Space Benefits Declaration, the Space Debris Mitigation Guidelines, and the Guidelines for the Long-term Sustainability of Outer Space Activities.

Bilateral/Multilateral Frameworks for Co-Operation in Space Activities

The Japanese government is also keen to co-operate with other countries advanced in space technology under bilateral or multilateral frameworks. For example, Japan has been a member of the International Space Station programme since 1985. Japan signed the Artemis Accord in 2020 and works closely with more than 50 member countries in relation to the Artemis Program – an international lunar exploration programme. In addition, the Japanese government signed with the United States government the Framework Agreement for Cooperation in the Exploration and Use of Outer Space in 2023, which covers intellectual property rights protection, cross-waiver, scientific data sharing, and the effort to exempt taxes and fees on necessary imports and exports in furtherance of the co-operation. Furthermore, JAXA and ESA signed the Joint Statement on Next Big Cooperations in 2024, outlining plans for major co-operation missions in areas including planetary defence, Earth observation, low Earth orbit, exploration and space science. Dialogue and discussions on co-operation in space activities are also underway with France, India, and Australia.

Japan’s space industry is expanding, with over 100 start-up companies engaged in various space-related business activities. These companies operate across a diverse range of fields, including the utilisation of satellite data and technology, satellite infrastructure development and operation, transportation, on-orbit services, space exploration and resource extraction, as well as space tourism.

More than 30 of these start-ups focus on the use of satellite data. This sector shows synergy with cutting-edge technologies such as artificial intelligence (AI). These companies are attracting funding not only from venture capital funds, but also from major corporations outside the traditional aerospace and defence industries, as well as from public sources.

The legislative landscape in Japan is evolving in parallel with these developments. The Satellite Remote Sensing Act and the Space Resources Act, as described in 2.2 Legal System and Sources of Space Law and Regulation, are responses to this industry expansion. Moreover, the Committee on National Space Policy published an interim report on amendments to the Space Activities Act in March 2025. It aims at supporting the anticipated increase in commercial space operations by Japanese companies.

The space industry in Japan has traditionally developed mainly in response to demand from the national government. However, since the 2000s, the importance of commercial space development by the private sector has been recognised, and the government has encouraged the private sector to actively participate in the space industry.

Such governmental policy was materialised by the enactment of the Basic Space Act (enacted in 2008), which states that the government shall take measures to promote business activities related to space development and use by the private sector. In addition, the Act on Launching of Satellites, etc. and Operation of Satellites (enacted in 2016, the “Space Activity Act”) and Act on Ensuring Appropriate Handling of Satellite Remote Sensing Data (enacted in 2016, the “Satellite Remote Sensing Act”) established the legal framework regarding the licence system for private operators to conduct launch businesses, satellite operation businesses, and businesses using satellite remote sensing devices. Through these acts, the legal framework for private operators to participate in outer space businesses has been established in Japan.

Public demand still accounts for the majority of the domain of space equipment manufacturing. However, in the space utilisation industry, especially in the fields of the satellite communication and broadcasting business, Japan has some of the world’s leading companies. In addition, several private companies have entered the launch service business, and new entrants have emerged in the development of microsatellites, on-orbit services, exploration of space resources, the establishment of a lunar economy, and entertainment in outer space. In this way, the movement of private companies to participate in the space industry is now increasing in Japan.

General Legal System

The legal system in Japan is based on civil law. Thus, the statute laws are the basic source of law, and case law is not strictly binding. In Japan, the Supreme Court can accept appeals of cases where decisions conflict with Supreme Court precedents, and thereby the uniformity of the interpretation of laws in courts is to be achieved. However, since appeals are not always filed for all cases, and the Supreme Court may not necessarily accept all appeals of lower court decisions that may be contrary to Supreme Court precedents, Supreme Court precedents only have a de facto binding power.

Legal System Regarding Space Law

As for space law in Japan, statute laws are the basic source of law.

The following is a summary of domestic laws regarding space activity in Japan.

Basic Space Act

The Basic Space Act provides the basic principles for the development and use of space, including compliance with international treaties, peaceful use, and promotion of industry, as well as the responsibilities of the government in realising these principles. It also stipulates that the government shall formulate a basic plan for space development and utilisation (the “Space Basic Plan”), and that the Strategic Headquarters for Space Development shall be established under the Cabinet to promote national policies on space development and use.

Space Activity Act

The Space Activity Act (i) establishes the licence system for the launching of rockets and operation of satellites conducted by private entities (see 2.4 Role of the State in the Licensing Process for Space Activities and 2.6 Role of the State in the Launching Process), and (ii) provides the legal structure of compensation for damages caused from space activities (see 2.8 Insurance and State Measures on Liability for Damages). About ten years have passed since its enactment, and a review for amendment of the Space Activity Act has been underway. The intermediate plan for such amendment was published in March 2025, and the amendment is scheduled to occur in 2026.

Satellite Remote Sensing Act

The Satellite Remote Sensing Act establishes the licence system for the use of satellite remote sensing devices using a domestic radio station and also provides regulations regarding restrictions on the provision of data obtained by satellite remote sensing devices to third parties (see 3.1 General Rules on Space Activities).

Space Resources Act

The Act on the Promotion of Business Activities for the Exploration and Development of Space Resources (enacted in 2021, the “Space Resources Act”) provides requirements for obtaining a licence for space resources exploration and development by private entities, as the add-on requirements for licences under the Space Activity Act. It also provides that operators can acquire ownership of space resources by meeting certain requirements.

Case Law Regarding Space Activity

There have not been many lawsuits regarding space activities in Japan yet. In addition, when a dispute arises, it tends to end in alternative dispute resolution or settlement in many cases. Therefore, there are not yet many case precedents publicly available in the field of space law.

Public institutions related to space policy in Japan are as follows. Essentially, the Cabinet Office plays a central role in formulating space policy, while Japan Aerospace Exploration Agency (JAXA) plays a role as a player in space activities, such as space-related research and development, launch and operation of satellites, and support for private entities participating in space activities.

Strategic Headquarters for Space Development

The Strategic Headquarters for Space Development is established in the Cabinet and is responsible for (i) drafting the Space Basic Plan and its implementation, and (ii) researching and deliberating key policies on space development and use, and promoting the implementation of these policies.

Cabinet Office

The Cabinet Office oversees planning, formulation, and general co-ordination of policies on space development and use. In addition, the Cabinet Office is responsible for the development and operation of the Quasi-Zenith Satellite System. The Space Policy Committee is established in the Cabinet Office, which deliberates on important policies related to space development and use.

JAXA

JAXA is established as one of the national research and development agencies responsible for space-related policies. The Cabinet Office, Ministry of Internal Affairs and Communications (MIC), Ministry of Education, Culture, Sports, Science and Technology, and Ministry of Economy, Trade and Industry (METI) are in charge of JAXA. JAXA focuses on (i) academic research and technological development in space science, (ii) the development, launching, tracking, and operation of satellites, etc, and (iii) assisting research and development related to outer space by private entities. JAXA’s medium- to long-term goals (covering a period of five to seven years) shall be decided by the competent ministers based on the Space Basic Plan.

In Japan, obtaining a regulatory licence is required for the launch of rockets and operation of satellites. This section describes the licence for operation of satellites, and the licence for launching rockets is discussed in 2.6 Role of the State in the Launching Process. Furthermore, additional procedures are required for remote sensing (see 3.1 General Rules on Space Activities), and exploration of space resources.

Licence for Operation of Satellites under the Space Activity Act

When operating a satellite using (i) a control facility in Japan, (ii) a control facility on board a ship or aircraft of Japanese nationality or (iii) a control facility on board a satellite over which Japan has jurisdiction, it is necessary to obtain a licence for each satellite from the Prime Minister under the Space Activity Act. In relation to the licence, a “satellite” is defined as “an artificial object which is used by putting it in the Earth’s orbit or beyond the orbit, or placed on a celestial body other than the Earth”. Thus, “satellites” include not only normal satellites used on the orbit but also rovers, etc, used on celestial bodies. The operation of satellites, subject to licence under the Act, means “to detect the position, attitude and condition of a satellite and to control these using a satellite control facility”. Since the operation of satellites is broadly and generally defined as described above, this licence is basically required when an activity using an artificial object is to be conducted in outer space.

Any person who intends to obtain the licence has to submit information regarding the location of the satellite control facility, the orbit of the satellite if it is to be used in an orbit, the purposes and methods of use of the satellite, the configuration of the satellite, the details of the measures to be taken upon the termination of the control, and other plan for the operation of the satellite. The criteria for issuing licences include, for example, whether the purposes and methods of the satellite meet the basic principles of the international treaties and the Basic Space Act, and whether the configuration and the control plan of the satellite are sufficient from the perspective of preventing pollution of outer space and ensuring safety. According to the published guidelines, the standard period required for the examination of the licence application for the operation of a satellite is about 15 days to three months.

Supervision of Satellite Operators

The Prime Minister may request reports from satellite operators who obtained a licence for satellite operations and inspect their offices as necessary. Furthermore, the Prime Minister may give guidance, advice and recommendations, which have no binding power, to satellite operators to the extent necessary to ensure compliance with international treaties and public safety, and may take necessary measures against a satellite operator if the satellite operator does not comply with the plan submitted at the time of obtaining the licence. Through these mechanisms, satellite operators are expected to be supervised by the government.

Other Procedures Regarding Satellite Operation

In addition to the above procedures under the Space Activity Act, a satellite operator is required to submit a notification to the Cabinet Office regarding the registration of a space object in accordance with the Registration Convention and related UN recommendations when a satellite is placed into or beyond orbit.

A person who intends to install a radio station and use radio waves in Japan must obtain a licence from the MIC in accordance with the Radio Act. When using radio waves for the purpose of communication with a satellite, it is necessary to obtain a licence under the Radio Act for both the radio station on the ground that communicates with the satellite and the radio station on board the satellite (a “satellite station”). When a person intends to obtain a licence for a satellite station, the person shall submit information of the orbit or the position, range of movement, launch schedule and period of use, etc, of the satellite.

International co-ordination of frequencies will be carried out by the MIC with the International Telecommunication Union in the process of granting the licences above. This international co-ordination shall begin approximately two years prior to the launch of the satellite, which is a high hurdle for doing business with satellites.

The examination of granting licences under the Radio Act includes the feasibility check of frequency allocation in order to prevent conflicts of frequencies. The MIC publishes the table of frequencies, which shows frequencies to be allocated for each purpose of use, and frequencies will be allocated according to this table.

Licence for Launch under the Space Activity Act

When launching satellites, etc, from (i) a facility in Japan or (ii) a facility on board a ship or aircraft of Japanese nationality, it is necessary to obtain a licence from the Prime Minister in accordance with the Space Activity Act for each launch. The term “satellites, etc” means satellites and a launch vehicle of satellites, and the meaning of a “satellite” here is the same as that described in 2.4 Role of the State in the Licensing Process for Space Activities.

Any person who applies for a licence has to submit information regarding the design of the rocket, the location of the launch facility, a plan showing the flight path of the rocket and measures to ensure safety, the number of satellites to be launched and purposes and methods of the satellites, etc. The criteria for issuing a licence include requirements that the rocket design, flight path and launch facilities have a certain level of safety, and that the methods and purposes of satellite conform to the basic principles of the international treaties and the Basic Space Act. Under the Space Activity Act there is also a certification for launch vehicle models and conformity certification for launch facilities, simplifying the application procedures for a launch licence when using a launch vehicle or a launch facility that has been pre-certified. According to published guidelines, the standard period required for the launch licence application is usually four to six months, but one to three months when using a launch vehicle model that is pre-certified.

Supervision of Launch Providers

Like the case of satellite operators, there is a supervision mechanism for launch providers. The Prime Minister may request necessary reports from launch providers, persons who have obtained certification for a launch vehicle model, and persons who have obtained conformity certification for launch facilities, and may also inspect their offices. The Prime Minister may provide guidance, advice and recommendations to them, which have no binding effect, to the extent necessary to ensure compliance with international treaties and public safety, and may also take necessary measures against a relevant operator if there is a risk that the launch vehicle or launch facility will no longer meet safety standards.

JAXA’s Role in Satellite Launches

JAXA also plays a role in satellite launches. JAXA not only launches satellites developed by itself, but also provides opportunities to launch small satellites developed by private companies, universities, and other research institutes into space as piggyback payloads.

International Treaties

As described in 1.1 International Legal and Regulatory Developments, Japan has ratified or acceded to the Outer Space Treaty, the Rescue Agreement, the Liability Convention, and the Registration Convention, but has not ratified or acceded to the Moon Agreement. As for multilateral agreements, Japan has signed the International Space Station Intergovernmental Agreement (IGA) and the Memorandum of Understanding on International Space Station, and is also a signatory to the Artemis Accords.

Role in COPUOS

Japan has participated in COPUOS since its inception, and at the 60th session of the Legal Subcommittee, Professor Setsuko Aoki became the first Japanese person, and the first woman, to chair the Subcommittee.

Domestic Legal Framework to Implement International Treaties, etc

Under the Basic Space Act, Japan’s space activities are to be conducted in accordance with international treaties, including those regarding the exploration and use of outer space. In addition, pursuant to Article 6 of the Outer Space Treaty, in order to ensure that domestic space activities, including those by private operators, are conducted in accordance with the provisions of the Outer Space Treaty, the Space Activity Act stipulates that the purposes and methods of use of satellites may not interfere with the implementation of international treaties regarding development and use of outer space, as a condition for issuing a licence for launch or operation of satellites. This mechanism ensures private operators conduct space activities in accordance with international treaties, including the Outer Space Treaty.

Furthermore, international soft laws are also taken into account in the criteria for issuing these licences. For example, the criteria for issuing licences for the launch or operation of satellites require the undertaking of detailed measures to diminish space debris, based on international guidelines for the control of space debris (the relevant guideline under the Space Activity Act clearly refers to the IADC guideline as one of such guidelines). In addition, the licence criteria for the operation of satellites include taking measures to prevent the deterioration of the global environment due to materials from other celestial bodies and preventing environmental pollution of other celestial bodies, which must be in accordance with the planetary protection guidelines stipulated by COSPAR.

Rules Regarding Responsibility With the Activities of Private Entities, etc

In the event that the space activity of a private entity in Japan causes damage to a person in a foreign country, and Japan compensates the damage in response to a claim for damages from the government of the foreign country against Japan, there is no provision in Japan’s space law regarding the conditions under which the Japanese government may claim for reimbursement to the domestic private entity. Even based on general laws such as the Civil Code, it is not clear what facts can satisfy the requirements for such claims for reimbursement.

The Space Activity Act provides for measures to secure compensation for two types of damages: “Damage Caused by Falling Rockets, etc” and “Damage Caused by Falling Satellites, etc”.

Damage Caused by Falling Rockets, etc

“Damage Caused by Falling Rockets, etc” means damage to human life, body or property caused on the ground surface, water surface, or in a flying vehicle such as an aircraft in flight by the fall, collision or explosion of (i) a satellite and its launch vehicle before satellite separation and (ii) a launch vehicle after satellite separation. From the viewpoint of providing swift compensation to the victims, the Space Activity Act provides that only the launch provider is directly liable for the Damage Caused by Falling Rockets, etc. In other words, the manager of the launch facility, the manufacturer of the launch vehicle, the purchaser of the launch service, and the satellite manager are not directly liable to the third party for such damage; provided, however, that this does not preclude the launch provider from a claim for reimbursement against these parties. The launch provider is subject to strict liability (ie, liable even without negligence) for the Damage Caused by Falling Rockets, etc.

In order to secure the financial resources to pay for such damages, the Space Activity Act provides that the launch provider must obtain insurance as well as enter into a “Compensation Contract for Damages Caused by Falling Rockets, etc” with the government for each launch in an amount determined by the ordinance as satisfactory to protect the victims in consideration of the circumstances of the launch. These measures must be in place in order to obtain a launch licence. Under the Compensation Contract for Damage Caused by Falling Rockets, etc, the government will compensate for damages that are not covered by private insurance, such as damages caused by terrorism. Furthermore, as a measure of industrial support, the Space Activities Act provides that private operators may enter into an agreement with the government under which the government will compensate for damages up to JPY350 billion in the event that the amount of actual damages exceeds the amount covered by the aforementioned measures.

Damage Caused by Falling Satellites, etc

“Damage Caused by Falling Satellites, etc” means damages to human life, body or property caused on the ground surface, water surface, or in a flying vehicle such as an aircraft in flight by the fall, collision or explosion of a satellite. The liability of the Damage Caused by Falling Satellites, etc, is also a statutory liability that arises even without fault, but unlike the Damage Caused by Falling Rockets, etc, no system exists for concentration of liability. In addition, unlike the Damage Caused by Falling Rockets, etc, there is no obligation for satellite operators to take particular measures to ensure compensation for damages, and no government compensation system exists.

Damage Caused in Outer Space

Damage caused in outer space in cases where a rocket or satellite collides with another space object in space is not included in the Damage Caused by Falling Rockets, etc, or the Damage Caused by Falling Satellites, etc, and there are no special provisions for such damage under the Space Activity Act. Therefore, there is no obligation for launch providers and satellite operators to take measures to ensure compensation for damages and there is no government compensation system for these damages. In light of the increase in the number of satellites, whether it is necessary to take measures to secure compensation for such damages in outer space is under discussion.

Under Japanese law, no specific regulations currently govern very high altitude such as the stratosphere. In addition, since there are no clear definitions of “space” and “aviation”, the boundary between space and aeronautical space is not distinct.

Which of space laws or aviation laws apply to objects in very high altitude depends on whether such objects fall under the definition of “satellites, etc.” under the Space Activities Act (see 2.4 Role of the State in the Licensing Process for Space Activities) or “aircraft” under the Aviation Act. The term “aircrafts” is defined by the Aviation Act as “airplanes, rotary-wing airplanes, gliders, airships, and other devices specified by subordinate regulations that can be used for aviation with people on board”, but the definition of “aviation” does not exist. Therefore, the definition of “aircrafts” is not clear after all. In this regard, referring to the definition of the Chicago Convention, “aircraft” under Japanese law may be interpreted to mean “any machine that can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the Earth’s surface.” However, some objects cannot be clearly included in “aircraft” even by such definition. For instance, suborbital rockets do not fall under “aircrafts” due to their use of rocket engines, nor “satellites” since they are not launched on or beyond Earth’s orbit. Therefore, the current discussions on amendments to the Space Activity Act include how to treat suborbital rockets and rockets launched from balloons.

With respect to the licensing system for space activities in Japan, please see 2.4 Role of the State in the Licensing Process for Space Activities for satellite management, and 2.6 Role of the State in the Launching Process for rocket launches. This section describes the regulations on obtaining and utilising remote sensing data.

Remote Sensing

Summary

The Act on Ensuring Appropriate Handling of Satellite Remote Sensing Data (the “Remote Sensing Act”, Law No 77 of 2016) sets forth (i) the system of permission for the use of satellite remote sensing instruments using radio equipment in Japan and (ii) the regulations on the provision of certain remote sensing data obtained by satellite remote sensing instruments to third parties.

Scope

While the Remote Sensing Act regulates observations on the Earth’s ground or water surface, this Act does not regulate remote sensing instruments to observe outer space or celestial bodies. In addition, remote sensing data that does not reach the specified criteria of distinguishing accuracy is not subject to the Remote Sensing Act. For example, (i) raw data with the distinguishing accuracy of two metres or less for optical sensors and (ii) raw data with the distinguishing accuracy of three metres or less for SAR sensors are subject to the regulation of the Remote Sensing Act.

Obligations

Operators of remote sensing instruments must (i) obtain a certain licence and/or permission under the Remote Sensing Act in advance and (ii) comply with the following disciplines in order to obtain and maintain the said licence and/or permission:

• take measures of security control to prevent leakage, loss, or damage of remote sensing data;
• take measures of, among others, encryption to prevent access by third parties other than persons with the licences and/or permission;
• shut down the remote sensing instruments when the corresponding satellite deviates from the authorised trajectory; and
• keep records of transmission/reception to/from the remote sensing instruments and records in the case of provision of remote sensing data to a third party.

Remote sensing data may, in principle, be distributed only among (i) persons who have obtained licence and/or permission under the Remote Sensing Act or (ii) government agencies in Japan, the United States, Canada, Germany, and France.

In addition, recipients of remote sensing data are required to comply with the same safety management obligations as the operators of remote sensing instruments.

The Prime Minister of Japan may order the prohibition of the provision of remote sensing data to third parties, otherwise normally allowed, by specifying the scope of data and the period of time. This is the Japanese version of the so-called “shutter control” by the US President by which the sale or provision of remote sensing data of a specific region may be restricted at any time by presidential decree if there is a risk of disadvantage to the country.

Tenure Security for Space Activities

In Japan, there is no regulation on the tenure security or its revocation in general. With respect to cybersecurity, the establishment of security measures for satellites is considered in the review process of space activity licences under the Space Activities Act. The Ministry of Economy, Trade and Industry (METI) has published the Guidelines for Cyber Security Measures for Civil Space Systems Ver. 2.0, which is legally non-binding but expected to be complied with (see 4.3 Cybersecurity and Space with respect to the Guidelines for Cyber Security Measures for Civil Space Systems Ver. 2.0 ).

In Japan, the Space Activities Act sets forth a licensing system for (i) rocket launches and (ii) satellite management. The Act requires, during the licensing review process, that the purpose and method of satellite utilisation comply with the basic principles of the Basic Space Act in Japan and the space treaties, that the following anti-collision and space debris reduction measures be taken, and that it be ensured that there is no risk of interference with public safety.

For rocket launches:

• appropriate measures to prevent debris generation in orbit; and
• appropriate measures during the rocket’s orbital injection stage to prevent debris generation.

For satellite operations:

• mechanisms to prevent accidental scattering of equipment during satellite operations;
• measures to avoid collisions with other satellites; and
• debris reduction measures at the end of the mission, such as de-orbiting and re-orbiting.

Service satellites providing in-orbit services are also subject to the review described above, provided that the satellite management facility is located in Japan. Due to the inherent risk of collision associated with in-orbit services, which often involve approaching or rendezvousing with other satellites, specific licensing guidelines, including the guideline for preventing collisions with artificial satellites published in February 2025, have been established for satellites performing such activities.

The above guidelines (i) indicate the rules of service satellites or on-orbit services using such satellites which the operators must, in principle, meet, considering the following aspects, and (ii) specify the particular items that an on-orbit service provider must, in principle, present to prove that these rules have been met in the event of examination for a permit to manage such a satellite:

• prevention of infringement of rights against the target;
• security of measures to be taken against the target as an on-orbit service;
• ensuring necessary information disclosure to countries and other satellite operators;
• technical requirements for the structure and management plan of the service satellite; and
• establishment of an operational system to manage the service satellite

For example, concerning the first aspect, the operator is required to have authorisation or consent from the owner of the target satellite or the other person who has title to the target satellite to perform on-orbit services; the specific items to be presented by the operator include (i) the target satellite’s registration information; (ii) an agreement between the operator and the service recipient in which the service recipient is required to represent and warrant that the service recipient has the necessary title to the target satellite; and (iii) information on the owner and/or manager of the target.

Operators’ General Obligations

Operators are subject to the requirements described in 3.2 Principles of Non-Interference and Prevention of Harmful Interference.

ESG Guidelines

There are no ESG guidelines for space activities in Japan.

Lunar Heritage Sites or Scientific Research Zones

Japan is a signatory to the Artemis Accord, which commits to preserving humanity’s outer space heritage, including human or robotic landing sites, artifacts, spacecraft, and other evidence of activity on other celestial bodies.

Intellectual Property Rules

Japan has no specific intellectual property rules applying to space activities and assets.

Article 26 of the Japanese Patent Act provides that “[i]f specific provisions on patents are established by a treaty, those provisions prevail”. However, it has been questioned whether the IGA (Inter-Governmental Agreement) is not included in the “treaty” set forth in Article 26 of the Japanese Patent Act (unlike the Paris Agreement regarding industrial property rights and TRIPs).

As described in 3.1 General Rules on Space Activities, the Remote Sensing Act regulates the remote sensing data. The Remote Sensing Act does not regulate all space data, but only (i) observations of the Earth’s ground or water surface and (ii) remote sensing data that exceed the specified criteria of spatial resolution (ie, data more accurate than the threshold set forth therein). Please see 3.1 General Rules on Space Activities with respect to the regulations in detail.

There is no specific act, regulation, or guideline in Japan relating to space data spaces. Based on publicly available information, Japanese space agencies such as JAXA do not currently operate any space data spaces.

The Ministry of Economy, Trade and Industry (METI) has published the “Guideline for Cybersecurity Measures in Private Space Systems”, which outlines key cybersecurity measures that should be taken, or are recommended to be taken, by various stakeholders. The scope of the guideline includes satellite owners, satellite operation businesses, satellite data platform providers, satellite data service providers, satellite data users/satellite communication users, and satellite development businesses (excluding launch facilities, which are explicitly outside the scope of the guideline).

This guideline is intended to be used (i) by businesses involved in the space industry as a reference when implementing their own cybersecurity measures, and (ii) by governments, municipalities, and private entities which are procuring space systems, to assess whether an enterprise satisfies basic cybersecurity requirements. While not legally binding, this guideline is considered to be a practically important soft law.

The Basic Space Act stipulates, as a basic principle, that space development and use must be conducted in consideration of its impact on the environment. The act also stipulates that it is the responsibility of the government to take necessary measures to promote space development and use in harmony with the environment, and to endeavour to ensure international co-operation for the preservation of the space environment.

The licence system under the Space Activity Act is considered to ensure that space activities in Japan are appropriate from the perspective of protecting the space environment. An operator who intends to launch a satellite or operate a satellite is required to obtain the licence under the Space Activity Act, and the criteria for issuing the licence include that the purposes and methods of the use of satellites to be launched or operated should not interfere with the implementation of international treaties, by which it is required that satellites used for space activities conform to the regulations for space environment protection in the international treaties, including Article 9 of the Outer Space Treaty.

Furthermore, taking measures to protect the space environment is specifically incorporated into the examination criteria for space activity licences. For example, regarding licence criteria for the operation of satellites, appropriate measures should be taken to prevent global environmental deterioration due to materials originating from other celestial bodies and to prevent environmental pollution of other celestial bodies.

The measures required to prevent the deterioration of the environment of the Earth and other celestial bodies are in accordance with the planetary protection guidelines established by COSPAR. The protection of the space environment is being pursued by requiring adherence to international treaties and soft law on space environment protection as a prerequisite for participation in space activities.

For the purpose of taking necessary measures such as formulating plans for adaptation to climate change and providing information on climate change, the Climate Change Adaptation Act has been enacted in Japan. The Act stipulates that, in order to promote adaptation to climate change, the government must make efforts to promote the observation, monitoring, prediction, and assessment of climate change and its effects, as well as the development of technologies to adapt to climate change, and the “observation” is interpreted to include observations using satellite remote sensing technology.

The Space Basic Plan formulated in June 2023 based on the Space Basic Act mentions as one of the goals for the next ten years to contribute to solving global issues such as climate change, etc, and to drive the achievement of Sustainable Development Goals through methods using data from remote sensing and the Quasi-Zenith Satellite System, etc.

As an example of government efforts to tackle climate change, several Earth observation satellites aimed at addressing climate change and other issues, are being operated by JAXA and other public organisations. For example, GOSAT-2, launched in 2018, which can observe global carbon dioxide, carbon monoxide, and methane, is operated to monitor long-term changes in greenhouse gases. GCOM-C, launched in 2017, is operated to improve the accuracy of future climate change predictions through long-term observations of various physical quantities that influence the Earth’s climate, such as the impact of aerosols on the amount of solar light reaching the Earth’s surface and the ability of organisms to absorb carbon dioxide.

Like the protection of the space environment, reduction of orbital debris is also addressed through the licensing mechanism for launching or operating satellites under the Space Activity Act. The licence criteria for launch require appropriate measures to diminish on-orbit debris and to remove the rocket booster from the protected area of the orbit. The licence criteria for the operation of satellites also require that appropriate measures be taken to diminish debris generation, such as prevention of unintentional release of objects, prevention of crushing of satellites and appropriate ways of termination. These debris minimisation measures and termination measures for launch vehicles and satellites are based on the COPUOS and IADC guidelines.

In Japan, Astroscale, a private space enterprise listed on the Tokyo Stock Exchange, is working to provide in-orbit services, particularly removal of space debris. The government is supporting Astroscale’s commercialisation of space debris removal services by providing subsidies for research and development of related technologies.

In principle, space activities are taxed in the same manner as normal business activities in Japan.

In general, corporate income tax (or the income tax in the case of a natural person) and the consumption tax (VAT) are imposed on space activities as described below.

Corporate Income Tax

The corporate income tax is levied on the profits (revenues less expenses) earned during the fiscal year (or the calendar year in the case of a natural person). The effective tax rate of the corporate income tax is approximately 30%.

Consumption Tax (VAT)

When goods are transferred (typically sold) or services are rendered, 10% of the consideration is charged as the consumption tax. However, it should be noted that:

• no consumption tax is imposed on export transactions; on the other hand, consumption tax is imposed on import transactions; and
• to facilitate co-operation in space activities between Japan and the USA, such as the Artemis Accord, the consumption tax on imports of goods and other items necessary for Japan-US space co-operation is exempted from taxation under Article 5 of the Framework Agreement on Space Cooperation between Japan and the USA.

Business operators may credit the consumption tax imposed on their purchase of goods or services against the consumption tax on their sales with certain conditions (as a result, business operators pay the net tax amount to the government).

While not exclusive to or specifically designed for space activities, the R&D tax credit rules and open innovation tax incentives can be leveraged to encourage investment in space-related businesses. Additionally, the angel investor tax system is available for individual venture investments in this sector. However, it is important to note that these tax incentives are temporary measures.

R&D Tax Credit Rules

This R&D tax credit rules allow a company to credit a certain tax credit ratio (1% to 14%) of the amount of its expenses relating to research and development against its corporate income tax amount. Under this system, the greater the research and development amount, the higher the applicable tax credit ratio, thereby encouraging companies to increase their R&D investment. However, there is a ceiling on the amount of tax credit that can be claimed, determined by the company’s corporate income tax.

Open Innovation Tax Incentives

A company may, subject to certain conditions, deduct 25% of the amount invested in start-ups from its corporate income tax (with a minimum and maximum limit). Previously, the deduction was limited to the acquisition of newly issued shares (the New Investment type), but the tax reform in 2023 made the acquisition of outstanding shares from existing investors (the M&A type) also eligible.

Angel Taxation

This programme is available only to individual investors. In general, investors can choose from the following three types of preferential treatment.

Preference Type A

At the time of investment, the amount invested is deducted from the amount of income for the same year (up to JPY8 million or 40% of income, whichever is lower). However, since the acquisition price of the stock is reduced by the amount of deduction, the amount equivalent to the deduction is also subject to income taxation when the stock is transferred in the future. As a result, this tax incentive is no more than tax deferral.

If a loss is incurred at the time of transfer, the amount of loss can be offset against the gains arising from other stock transfers over the following three years.

Preference Type B

At the time of investment, the full amount of the investment is deducted from gains on transfers of other stocks in the same year or the subsequent year (without an upper limit). However, since the acquisition price of the acquired stock is reduced by the amount of deduction, the amount equivalent to the deduction is also subject to income taxation when the stock is transferred in the future. As a result, this tax incentive is no more than tax deferral. Just as with Preference Type A, if a loss is incurred at the time of transfer, the amount of loss can be offset against the gains arising from other stock transfers over the following three years.

Special Type for Pre-Seed or Seed Investment

At the time of investment in companies in the pre-seed or seed stage, the amount invested is deducted from the gains on transfer of other stocks in the same year or the subsequent year (up to JPY2 billion). Unlike the above, the acquisition price of the stock is not reduced, so the amount of deduction is effectively tax-free.

Income Tax

As with other goods, if a profit is made on the sale of space assets, the profit is subject to income taxation; on the other hand, if a loss is incurred, the amount of income on which the income tax is imposed is reduced by the amount of loss.

Consumption Tax (VAT)

Consumption tax is imposed at 10% of the consideration for the sale of assets or other goods or provision of services in Japan.

Consumption tax is not imposed on transactions for exporting space assets. On the other hand, a consumption tax is imposed on the importation of space assets.

If the transfer of space assets is made in outer space after the launch, the consumption tax would not be imposed since the transfer of assets occurs outside of Japan.

“NewSpace” – space start-ups – is a growing industry in Japan and attracting interest from both public and private sectors. The Japanese government has set an ambitious target to double the size of the private space business market from JPY4 trillion in 2020 to JPY8 trillion by early 2030s (JPY0.6 trillion in the space equipment industry and JPY7.4 trillion in the space solutions industry).

Large investments are flowing into the Japanese space industry from domestic and overseas venture capital funds.

There are some cases of spin-offs. JAXA supports spin-off ventures established through investments by JAXA staff to conduct businesses using JAXA’s intellectual properties and knowledge gained from JAXA’s operations.

Both the private and public sectors are actively investing in space activities in Japan.

Private funds

Private funds can be categorised into equity and debt investment. In Japan, JPY29.4 billion of investment was made in total in 2024 and over JPY200 billion has been raised in Japan from 2015 to 2024. Equity is a main funding resource particularly for start-ups at the early stage. Not only venture capital funds but also “sogo-shosha” (ie, Japanese trading companies) and financial institutions are important fund providers in the space business. In addition, there have been some cases where Japanese space business companies succeeded in initial public offerings and listing on stock markets. Regarding debt fundings, some late-stage start-ups have raised funds through loans from financial institutions, including the largest Japanese commercial banks.

Public funds

The Japanese government actively supports the space industry through significant subsidies, particularly to start-ups, to encourage the space industry as a growing industry. One of the main subsidies is the “Space Strategic Fund” established in 2024, which targets space business companies, start-ups, universities, and national research institutes. The government plans to allocate JPY1 trillion over the next ten years. In March 2025, the Fund selected the first set of development themes, which consists of over 20 technology development themes from the fields of transportation, satellite and exploration and reaches JPY300 billion in total. Another subsidy, focused more on start-ups generally, is the Small/Start-up Business Innovation Research Scheme (the “SBIR Scheme”), which promotes R&D-type start-ups, including the space industry, that contribute to solving social problems.

A governmental organisation can be a player in equity investments. Equity investment in private companies by JAXA was legalised in 2021. JAXA has invested in projects, such as satellite data businesses and spaceplane developments.

Some municipal governments use the “Furusato Nozei” (hometown tax) programme to encourage the space industry in their municipalities. This allows taxpayers to contribute to any municipalities (other than where they live) in return for a tax credit from income tax and residence tax, which is expected to provide additional income to sparsely populated areas. Taiki Town in Hokkaido, for example, successfully utilised this programme to crowdfund its spaceport project.

Reform to Attract Investment for Space Activities

The Japanese government is dedicating efforts to increase investment in start-ups, including the space industry. Prime Minister Kishida declared “the first year of start-up creation” in 2022 and various frameworks to support start-ups have been launched. Below are examples that facilitate fundraising by start-ups in various stages.

Pre-seed/seed stage

• establishment of a credit guarantee framework that does not require a personal guarantee by managers; and
• tax exemption for reinvestment in start-ups.

Early/middle stage

• expansion of investment in venture capital by public funds;
• support in research and development of deep tech;
• improving stock option regulations; and
• expansion of public procurement from start-ups.

Later stage

• promotion of M&A through the open innovation tax incentives to expand opportunities to co-operate with large companies and diversify exit strategies; and
• development of secondary markets for unlisted shares.

Separately, as a support measure specific to the space industry, the Ministry of Economy, Trade and Industry (METI) and Organization for Small and Medium Enterprises and Regional Innovation (SME Support, JAPAN) have organised annual business matching programmes for the aerospace industry since 2014.

FDI Regulations in Japan

Prior filing requirement

Under the Foreign Exchange and Foreign Trade Act of Japan (FEFTA), a foreign investor who intends to conduct a restricted investment is obliged to complete a prior filing with the Minister of Finance and the relevant competent national authority where a target company’s business falls under a designated business sector.

Restricted investments subject to such prior filing requirement include:

• the acquisition of 1% or more of the shares of a listed company or one or more shares of an unlisted company;
• consent to the appointment of a foreign investor or a related person as a director or auditor; and
• a proposal for or consent to the transfer or abolition of a business in an industry that requires prior notification.

Designated business sectors subject to such prior filing requirement are categorised into two types: core designated business sectors and non-core designated business sectors. Space-related manufacture, such as a rocket development, and the relevant software development, are classified as a “core designated business sector”, to which more stringent restrictions regarding the exemption from the filing requirement apply, as explained below.

Exemption from the prior filing requirement

Exemption from the prior filing requirement may be available in certain circumstances. If the foreign investor is a foreign financial institution, the prior filing requirement is fully waived. If the foreign investor falls under a general investor or qualified sovereign wealth funds (SWF), the following rule will apply.

Non-listed targets

Where the target company is not a listed company and is in a designated business sector, the exemption is available only when the target company is in the non-core designated business sector and the foreign investor complies with all the following requirements:

• The foreign investor and its closely related person(s) will not serve as directors or audit and supervisory board members.
• The foreign investor will not propose the transfer or abolition of a business in the relevant designated business sector to the target company’s shareholders meeting.
• The foreign investor will not access sensitive confidential information relating to a business in the relevant designated business sector.

Given that emerging space business companies are usually non-listed start-ups in a core designated business sector, foreign investors interested in the Japanese space industry should note that the prior filing requirement will be applicable in most cases.

Listed targets

Where the target company is a listed company and is in a non-core designated business sector, the prior filing requirement is fully waived. Where the target company is a listed company and is in a core designated business, a foreign investor who acquires less than 10% of the issued shares of the target company is eligible for the exemption if they further comply with the following requirements: (i) they will not participate in the target company’s board meeting regarding their business; and (ii) they will not make a written proposal requesting any response from the target company with a time limit.

Sanctions

Non-compliance with the prior filing requirement (eg, closing a deal before a stipulated waiting period expires, misrepresentation in a prior filing, non-compliance with an order by the government) leads to enforcement actions to rectify the violation. Criminal charges, including fines and imprisonment, may also be imposed.

The documentation processes for fundraising in the NewSpace industry vary depending on the method of financing. Broadly, fundraising is classified into equity finance and debt finance, each with its own documentation practices and legal considerations.

Equity Finance

For unlisted space start-ups, equity finance typically involves the issuance of shares to investors. The process often begins with investor-led due diligence (including document submissions and interview processes, if necessary), followed by the execution of key agreements:

• investment agreement – outlining the terms and conditions under which the investor(s) subscribes to the company’s shares;
• subscription agreement – providing for the actual purchase of shares by the investor(s); and
• shareholders’ agreement – setting forth the rights and obligations among existing and new shareholders post-investment.

Given that securities disclosure obligations under the Financial Instruments and Exchange Act are burdensome, start-ups commonly rely on the “private placement exemption” for offerings to fewer than 50 investors with resale restrictions.

As the company grows, the initial public offering and public offerings thereafter may be an option to raise larger amounts of capital. This entails strict due diligence and comprehensive regulatory and documentation processes involving the stock exchange, underwriters and professional advisers. Required documents include listing application materials, securities registration statement and prospectus, underwriting agreement and investor presentation materials.

Debt Finance

Debt finance typically takes the form of loans. Key documents typically include a loan agreement and security documents.

Corporate Finance

In cases where the space business is operated by a well-established and creditworthy company, corporate finance would be an available option. Loan documentation in such cases may be relatively straightforward, with fewer covenants or warranties, and often without the need for collateral.

Project Finance

Where the project itself is deemed bankable despite limited corporate credit, project finance is an option. This non-recourse financing structure relies on cash flow generated by the project itself to service the debt. In Japan, project finance has been used in space-related infrastructure projects, such as the Ministry of Defence’s X-band satellite communications programme, and the Cabinet Office’s Quasi-Zenith Satellite System, both of which took the form of a private finance initiative (PFI).

Key documentation considerations in project finance include:

• risk allocation – identifying and allocating risks across project phases (eg, including provisions for cost overruns caused by satellite delivery delays or manufacturer insolvency, potentially mitigated through performance guarantees or insurance);
• stable revenue – requiring the borrower to execute long-term service agreements with users to ensure stable revenue over the loan period; and
• lender step-in rights – granting lenders the contractual right to intervene in project management (so-called step-in rights) if the performance deteriorates but it is necessary to continue the business itself.

As collateral is typically provided over the entire project, collateral documents are also an essential part of documentation processes. While establishing a security interest over satellites in space is theoretically achieved via a chattel mortgage or assignment, there is a legal issue over how to satisfy the “delivery” requirement for perfection. Some consider that such requirement may be achieved through handing over control capability on the ground facility, but there is no legislation or prevailing precedent, which leaves legal uncertainty regarding effective security arrangements.

Companies in the space industry face unique due diligence challenges in the context of fundraising and M&A transactions. These challenges are closely tied to the specific nature of space-related business and require careful evaluation by investors and legal advisers alike.

Structure of Early-stage Investment and Monetisation

For businesses engaged in the development and manufacture of spacecraft, a large amount of initial investment is necessary. In addition, there tend to be long lead times for generating profits in such business. This prolonged pathway to monetisation can cause difficulties in assessing the mid- to long-term business outlook in the due diligence process.

Dependency on Uncontrollable Events

In cases where a company’s revenue is contingent on the successful manufacture and launch of a satellite, there is an inherent risk due to the company’s inability to control critical aspects of the supply chain and the launch provider. The profits can be significantly and adversely affected by an unexpected change in manufacturing timeline or launch schedule.

Regulatory and Licensing Risks

The launch and operation of satellites are subject to licence and stringent regulations. Consequently, space businesses face the risk that (i) failure to obtain the necessary licences prevents a company from operating its business, or (ii) additional measures required by the relevant regulatory authorities (mainly the Cabinet Office) as conditions for approval could result in increased costs. These risks need to be carefully assessed during the due diligence process as they may materially impact the feasibility and cost structure of the business.

There are no special insolvency proceedings in Japan uniquely applicable to the space industry. Accordingly, companies operating in the space sector are subject to the same legal framework for insolvency and restructuring as businesses in other industries. The choice of procedure typically depends on the financial condition of the company and the potential for business recovery.

Court-Involved Insolvency Procedures

When a business is unlikely to be rehabilitated, bankruptcy proceedings (hasan tetsuzuki) is the main route. In this process, the company’s remaining assets are liquidated and distributed among creditors in accordance with statutory priorities. This effectively results in the dissolution of the company.

On the other hand, if the company is considered to have a viable path to recovery, it can utilise civil rehabilitation (minji saisei) or corporate reorganisation (kaisha kousei) procedures. These court-supervised frameworks allow for the formulation and implementation of a rehabilitation or reorganisation plan, respectively, aiming to preserve the business as a going concern while addressing its debt obligations.

Out-of-Court Workouts

Where court involvement may not be desirable — for example, when the publication of a certain insolvency proceeding may adversely affect the value of a business — out-of-court workouts are an option for rehabilitation. They can provide a more flexible and expedited resolution with the benefit of confidentiality. The Japanese Bankers Association has published useful guidelines for such cases, including the “Guidelines for Multi-Credit Out-of-Court Workouts” and the “SME Restructuring Guidelines”, which may be referenced to facilitate negotiations between debtors and creditors in a transparent and structured manner.

Securities markets are key venues where later-stage start-ups raise funds from a wider range of investors. Since 2023, four space business companies have listed on the Growth Market of the Tokyo Stock Exchange (TSE): iQPS (development and manufacture of satellites and sale of satellite image data), ispace (development of rovers and landers for lunar exploration), Astroscale (in-orbit servicing, including life extension and active debris removal) and Synspective (SAR data sales and solution services).

In addition, the Financial Services Agency and the TSE have made reforms to the venture funds market so that start-ups can have wider access to funding. This market was originally established in 2001 as a market for investment corporations mainly investing in unlisted venture companies. However, the excessive regulatory burden has prevented venture funds from being listed on the market. In 2023, the TSE relaxed the market rules, including the portfolio restrictions in relation to listed shares, share buybacks and disclosure obligations. Japan Growth Capital Investment Corporation invested in Astroscale and Synspective and plans to apply for the TSE venture funds market in the future.

Japan has no specific law governing intellectual property rights related to space activities. Therefore, intellectual property created through space activities is subject to the same regulations as intellectual property created through non-space activities. This means that even inventions made in outer space can be protected under the Patent Act of Japan if they are properly filed in Japan pursuant to the Patent Act. However, under the international principle of territorial application, the effect of the Patent Act does not extend beyond the territory of Japan. Accordingly, in principle, patent infringement committed in outer space is not protected by Japanese law.

However, the Patent Act stipulates that “where a treaty provides otherwise with respect to patents, such provisions shall apply”, and therefore exceptions to the aforementioned principle may exist where special provisions are applicable under a treaty. For example, Article 21 of the International Space Station Intergovernmental Agreement provides that inventions implemented on the flight elements of the Space Station are deemed to have been made in the territory of the registering country. Accordingly, it can be considered that the Patent Act of Japan may apply to patent infringements occurring on Japanese flight elements of the ISS.

On the other hand, in the case of patent infringement occurring on other space objects or in outer space where no such treaty exists, there are currently no adequate measures for protecting intellectual property rights. In practice, it might be possible to receive protection under the Patent Act by carefully drafting patent claims at the time of filing in a manner that the invention can be patented for implementation in Japanese territory, even if part of the patent is implemented in outer space. Additionally, you may argue that an infringement has occurred within Japan by focusing on the assembly process or other steps implemented within the territory in Japan. That said, without specific legislation, there are limitations on the protection of intellectual property rights in space.

Overall, Japanese space companies tend to file few patent applications. In the space industry, the percentage of patent applications in Japan filed by domestic entities accounts for only approximately 55%, while applications from Europe and the USA account for approximately 40%. The number of patent applications filed overseas by Japanese companies remains relatively low. One reason behind this is the fact that outer space projects have been mainly led by the government and there have been few private players, so the need to protect business with patents has been limited. In addition, space equipment has traditionally been developed on a one-off basis, so there has been little motivation to seek patent protection. However, the large number of patent applications filed in Japan by overseas companies, mainly from Europe and the USA, may hinder the space activities of Japanese companies and research institutions in the future. In addition, with the emergence of systems like constellation satellites, which are designed for mass production, and given the increase of players in space activities, there are growing potential needs for patent protection. In light of these changes of environment, the Japanese government is emphasising the importance of intellectual property strategy in the domestic space industry.

There are no specific laws regarding enforcement of intellectual property rights related to space activities.

As mentioned in 8.1 Territorial Patent Law v International Space Law, it is considered difficult to apply domestic patent law to activities conducted in outer space or to space objects unless there is a special treaty or you can argue that some production was conducted in Japanese territory. As a result, if products are manufactured in outer space and used there, it is considered difficult to apply Japanese patent law. Some advocate the need for legislative measures, but no concrete discussions on legislation or other measures have been made so far.

It is common to choose arbitration as the agreed dispute resolution method in space-related commercial contracts between private enterprises, especially when the contract includes non-Japanese parties. Arbitration offers several advantages, such as the confidentiality of proceedings and decisions, which is beneficial from the standpoint of maintaining business secrets. Additionally, arbitration allows for the selection of arbitrators by mutual agreement of the parties, which is advantageous for resolving disputes requiring specialised expertise. In space-related contracts, depending on the countries where the parties are based, London, New York, and Singapore are often chosen as the arbitration venue.

When arbitration is conducted in Japan, the Arbitration Act is applicable. This act is based on the Model Law on International Commercial Arbitration by the United Nations Commission on International Trade Law (UNCITRAL). Under the Arbitration Act, arbitral awards are given the same effect as final court judgments, and the grounds on which a court can annul an arbitral award are limited.

Japan is a signatory to the New York Convention, which is an international rule on the recognition and enforcement of arbitral awards in countries other than the place of arbitration. Awards made in other signatory countries of the Convention are recognised and enforced in Japan, except for certain limited grounds for refusal.

In Japan, we are not aware of arbitration cases in which a foreign investor has initiated arbitration against the Japanese government or private companies.

There is no publicly disclosed litigation case related to space-related business in Japan. However, there have been a handful of cases in the past where civil mediation initiated by the court was used to resolve disputes related to satellite launch failures. In general, the merits of civil mediation are more simplified procedures, lower costs, and quick resolution, compared to judicial procedures.

One notable case involved the National Space Development Agency of Japan (NASDA, which has merged into JAXA) in 1999, when the launch of the H-II Rocket No. 8 failed. The Ministry of Transport, which outsourced the launch of the rocket, a multi-functional transportation satellite, refused payment for the outstanding launch fees due to the failure. Through the civil mediation by the Tokyo District Court, NASDA and the Ministry had reached an agreement to separate NASDA’s obligations specified in the launch contract into the rocket manufacturing aspect and the launch service aspect. Consequently, it was finally settled that only the launch services obligation had not been performed, and the Ministry agreed to pay only for the portion of fees corresponding to the rocket manufacturing.

Another dispute resolved through civil mediation occurred in 2016 between JAXA and NEC Corporation. Although the X-ray astronomy satellite, “Hitomi (ASTRO-H)”, was successfully launched and placed into orbit, it disintegrated due to an attitude anomaly. JAXA’s investigation revealed that one of the primary causes of the accident was a programming error by NEC in setting the attitude control parameters for the satellite’s engine. JAXA filed for civil mediation against NEC, and the mediation concluded with NEC agreeing to pay JPY500 million to JAXA.

The anticipated expansion of space-related business as well as an increase in participating enterprises may cause more disputes in the future. From a preventative perspective, it is crucial to clarify potential points of contention within contracts. It is also vital to agree on dispute resolution mechanisms that align with the interests of the parties involved. Considerations may include:

• Choosing Arbitration or Mediation: Unlike judicial procedures, which are generally operated in public, arbitration and mediation are typically confidential, offering privacy.
• Determining Appropriate Jurisdiction or Venue: When companies located across multi-jurisdictions are involved in a project, it is important to decide which jurisdiction or arbitration venue is most suitable.