UNIDROIT 2010 - Study LXXIX - Preliminary Study


Informal Consultation Meeting on “Third party liability for Global Navigation Satellite System (GNSS) services”. Rome, 22 October 2010. An instrument on third party liability for Global Navigation Satellite System (GNSS) services: a preliminary study (prepared by the UNIDROIT Secretariat) - March 2010






The Proposal


In 2005, the Governing Council of UNIDROIT was seized of a proposal to examine the possibility of preparing an international instrument for liability resulting from GNSS malfunctioning.


In the years that followed, the proposal was explained in more detail. The positions for and against were illustrated respectively by Professor Sergio Carbone1 and Dr Hans-Georg Bollweg,2 both members of the UNIDROIT Governing Council. The UNIDROIT Secretariat subsequently prepared a background document which illustrated the situation as regards the different services available and the work that had already been done by other organisations such as the ICAO.3

In essence, according to the proposal

  • a legal regime is needed to balance the economic sustainability required by operators and the adequate compensation that victims of accidents might be entitled to;
  • the proposed instrument should cover all issues of liability, irrespective of the type of application. It should not be limited to aviation;
  • the present regime is inadequate because:

– the 1972 Convention on International Liability for Damage Caused by Space Objects treats only physical damage;


– the 1944 Chicago Convention on International Civil Aviation: Article 28 relates only to navigation and not to all other areas in which satellites are utilised;


– the relevant rules are inadequate as regards the question of sovereign immunity in the context of the provision of GNSS services by States or State-owned entities; and


– the studies conducted by ICAO have shown that the problem of liability exists and that the solutions given by domestic law are both conflicting and insufficient.


A specific legal regime might include the following:


(a) certification of providers of GNSS Services as “qualified providers”;


(b) channelling of liability to qualified providers;


(c) strict liability for damage resulting from failure or malfunction of GNSS services, subject to a limitation ceiling;


(d) liability limits according to a global limitation per year, per incident or pro capita, with the ceilings possibly set at different levels depending upon the services provided;


(e) supplementary compensation;


(f) a special regime for open services, distinguishing between:


– open services as a free common utility (at user risk) and
– open services for commercial exploitation (subject to the same rules as other GNSS services);


(g) the GNSS operator only subject to qualified providers’ rules when it supplies services in the market-place;


(h) immunities for publicly regulated services in certain circumstances (specific defence or security applications);


(i) measures against unqualified providers and producers of uncertified equipment.



Objections raised against the project


The arguments invoked against the proposed project are essentially five:

  • the development of a legal framework to govern the implementation of GNSS has been on the Work Programme of the Legal Committee of the International Civil Aviation Organization (ICAO) for many years; in particular the issue of liability was examined by the Secretariat Study Group on Legal Aspects of CNS/ATM Systems, which reported to the 33rd ICAO General Assembly in 2001. After several years of not making any progress on this project, in 2007 the 36th ICAO General Assembly downgraded the priority of the project from 1 to 3;
  • with the European Union set to commence GALILEO operations in 2013, there would not be enough time to draft a Convention and secure sufficient ratifications;
  • the only operational commercial navigation system covered would be GALILEO since other systems are military;
  • an international Convention covering only one operational entity would be unique, as it would be an international Convention to cover a regional navigation system, and it remains to be seen if and when other commercial systems might start to compete with GALILEO; and
  • the European Commission is examining the possibility/necessity of preparing a third party liability regulation in this area.


The Initial Research conducted by the UNIDROIT Secretariat


At its 88th session (2009), the Governing Council entrusted the Secretariat with the preparation of a detailed feasibility study focusing on gaps in liability resulting from the malfunctioning of satellite-based navigation systems. The findings of that study were that 

  • none of the current international rules governing liability for space activities apply to third party liability; and that
  • special liability regimes established by the various international conventions on the carriage of goods or persons have numerous gaps.


  • none of the carriage Conventions would apply as such to GNSS failure;
  • existing regimes can present gaps in protection;
  • a number of accidents provoked by GNSS failure or malfunction could fall outside the scope of application of the existing instruments;
  • the transport operator maintains a right of recourse in respect of the GNSS signal provider; and
  • all the instruments provide for a limitation of compensation, leading plaintiffs to potentially be induced to address the GNSS provider directly in order to obtain higher compensation.

In particular:

  • a) it is not entirely clear to what extent a carrier may be exempt from liability for damage ultimately attributable to GNSS failure;
  • b) it is not entirely clear to what extent a claimant that has been compensated within the limits of an existing Convention may sue the provider of a GNSS signal for the amount not compensated by the carrier; and
  • c) it is not entirely clear, in either case, whether the insurer (cargo or carrier) may have direct course of action against the signal provider.



  • there may be instances of liability that are left uncovered, leading potentially to either

– unlimited liability or no liability at all,

 – whilst in other instances liability would be limited to a set amount and no further compensation could be directly or indirectly obtained.


A new instrument on GNSS-related liability could

  • either be superimposed on the existing instruments; or
  • be a supplement to those Conventions for the amount of damage that exceeds their respective liability limits; or
  • be conceived to co-exist with the current carriage Conventions.


Possible Approaches


Three possible approaches have been identified by the proponents of the project:



– which considers that the current liability regime under domestic law adequately addresses GNSS liability issues; and

– that the development of a universal liability system is neither feasible nor desirable;



– which considers that a universal liability system or convention should be worked out; and



– which proposes a contractual approach accompanied by a framework agreement containing some uniform rules, including rules on liability;

– in this context some feel common rules should be mandatory for all parties concerned; while

– others lean towards mere recommendations.





In the course of the preliminary work conducted so far, the UNIDROIT Secretariat has organised a series of informal meetings:


1) An Informal consultation meeting on “Third Party Liability For Global Navigation Satellite Systems (GNSS) Services” was held on 22 October 2010. The purpose of that meeting was to assess the possible interest in the preparation of an international instrument on third party liability for GNSS Services. The meeting was attended by representatives of the Governments of China, the Czech Republic, Germany, Italy, the Russian Federation, the United States of America, and the Commission of the European Union, as well as by academics and members of the international space communities.


The participants discussed in particular whether an international instrument might, following the example of most liability instruments, set a liability limit which would also help the insurability of satellite activities and cover aspects such as liability channelling, provision for supplementary compensation to guarantee satisfactory recovery of losses and provide criteria for identifying the competent jurisdiction. Whilst expressing differing views on the topic, notably by reason of the legal and political complexities involved, the participants conveyed their general interest in continuing consultations.


The presentations included:

Reflections on the Legal Framework for TPL for GNSS (Prof. Dr. Lesley Jane Smith, LL.M., Leuphana Universität Lüneburg,Weber-Steinhaus & Smith, Bremen);


Policy Aspects of Third Party Liability in Satellite Navigation. Preparing a Roadmap for Europe (Matxalen Sánchez Aranzamendi, Resident Fellow European Space Policy Institute (ESPI))




Third-party liability for Global Navigation Satellite System (GNSS) services (UNIDROIT Secretariat) .


2) The second meeting was held on the occasion of the fifth session of the Committee of Governmental Experts for the Preparation of a draft Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets (Rome, 21-25 February 2011), in the form of a briefing session to inform participants in the session of the basic elements of the proposed project on third party liability for GNSS and to seek their views on its desirability and feasibility. Attendees included members of the delegations of Canada, China, Colombia, the Czech Republic, Germany, Hungary, Indonesia, Italy, Japan, Kenya, Mexico, Saudi Arabia, Slovenia, the United Kingdom and the United States. Also present were representatives of the European Centre for Space Law, the European Space Agency (ESA), the International Bar Association (IBA) and the International Institute of Space Law. At this briefing, Professor Carbone and Mr Walter Vasselli (Finmeccanica, Italy), illustrated the proposal and answered questions from the audience.



The presentation by Mr Vasselli was:

A Legal Regime for Third Party Claims Relating to the Malfunctioning of GNSS. Initiatives for new legislation and indications for further developments (Mr Walter Vasselli, Head of Compliance and Regulation, Finmeccanica Legal and Corporate Affairs) .


3) On 11 November 2011, the UNIDROIT Secretariat organised a third informal consultation meeting with representatives of interested Governments, international organisations (both inter-Governmental and non-Governmental), insurance, and industry, with a view to defining the possible scope of a future project and clarifying its essential features.


The programme of the meeting, which was devoted to “Risk Management in GNSS Malfunctioning”, included:


1) a general presentation of the proposal to examine the possibility of preparing an international instrument for liability resulting from GNSS malfunctioning: reasons, why the current system is insufficient (Prof. Anna Masutti, Senior Partner, Studio Legale AS&,T (Rome), and University of Bologna, Italy, member of the team preparing the original proposal made to UNIDROIT),


2) a general presentation of technical data: what can go wrong and what the risks are (Dr Renato Filjar, member of the Council of the Royal Institute of Navigation, and external Assistant Professor at the Faculty of Engineering and the Faculty of Maritime Studies, University of Rijeka, Croatia)


3) a presentation on how the maritime insurers deal with questions of liability for GNSS malfunctioning (Mr David Bolomini, International Group of P&I Clubs)


4) a presentation on risk management: the EUROCONTROL system (Ms Caroline Mantl, Senior Legal Expert, EUROCONTROL)


5) an illustration of a developed system and how it deals with risk management: the GPS. Could the GPS non-liability system apply equally to the other GNSS systems? (Professor Henry Gabriel, Elon University, Greensboro, North Carolina (USA) and member of the UNIDROIT Governing Council)


The meeting closed with a round table discussion on whether the question of liability for GNSS malfunctioning is a European or global problem.



6) Report on the meeting


Carbone S.M. - E. De Maestri, “The Rationale for an International Convention on Third Party Liability for Satellite Navigation Signals”, in: Uniform Law Review, 2009, 38.


Bollweg H.G., “Initial considerations regarding the feasibility of an international Unidroit instrument to cover liability for damage caused by malfunctions in global (navigation) satellite systems”, in: Uniform Law Review, 2008, 917.


UNIDROIT Secretariat, “An instrument on third party liability for damages caused by Global Navigation Satellite System services: a preliminary study”, (Study LXXIX – Preliminary Study (2010), also issued as Document CD(89)7 Add. 1 (2010)).


Mr Vasselli made PowerPoint presentations at both informal meetings, the first entitled “A legal regime for third party claims relating to the malfunctioning of GNSS in Europe. Initiatives for an EU Regulation on civil liability and compensation for damage relating to Galileo and Egnos – indications for research at international level”, the second “A Legal Regime for Third Party Claims Relating to the Malfunctioning of GNSS Initiatives for New Legislation and Indications for Further Developments”.



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