5.3.5 Insurance Space ventures are high risk endeavors. Since the ISPO is international, and will not be incorporated under any national law, the Signatories will not be able to avail themselves of the protection afforded by limited liability. Therefore, exposure to risk, through other instruments, takes on increased importance. The ISPO will purchase insurance, negotiate for liquidated damages and/or manufacturer/contractor/subcontractor warranties in order to cover the following risks: • inexcusable delays by contractors or launching parties • nonperformance • prelaunch storage • launch procedures up to, but not including, intentional ignition • intentional ignition to delivery in orbit • inorbit insurance against system and subsystem failures • third party liability • collision of registered space objects with other space objects • damage to terrestrial objects Cross-waivers To control for risks within the membership of the ISPO, each Signatory and the ISPO shall be required to waive all claims against all other Signatories with the following exceptions: death, dismemberment, bodily damage, and willful acts including sabotage. Contractors and subcontractors may also be invited to join this reciprocal regime for those risks not expressly provided for with insurance, liquidated damages, and/or warranties. 5.3.6 Dispute Resolution Mediation, Litigation, and Arbitration are methods of resolving disputes. Mediation is an informal means of dispute resolution where the mediator acts as a neutral facilitator to aid the parties in resolving their own dispute. The mediator does not act as a decision-maker but rather as a neutral party who does not render judgments. It is therefore not an assured method of achieving closure of the dispute. Litigation is pursued by means of the judicial process. It is a formal process which utilizes the courts established by governments. International litigation is especially complex, costly, and time consuming. Arbitration is pursued by non-governmental private bodies following a process which is similar to litigation. The salient differences between litigation and arbitration are that the parties in an arbitration choose their decision-makers, who are therefore often experts in their fields, thereby relieving the parties of the burden and expense of educating the decision-makers about the technological subject matter of the dispute. Since it is a private contractual matter, the parties are not subject to the docket schedules of the various court systems. By contractual means they can also choose the law that will govern the dispute and the location of the arbitration. These contractual aspects of arbitration can substantially reduce the significant uncertainty usually associated with international dispute resolution. For the reasons stated above, arbitration is recommended for the ISPO, especially due to the complex, technical and international nature of the transactions contemplated. Because of the importance of the dispute resolution mechanism, the following draft is offered for consideration of the Signatories for incorporation in the ISPO Charter at the ISPO Founding Conference: Arbitration Unless otherwise settled by the Signatories, all disputes between a Signatory and the ISPO which may arise out of, or in connection with, the ISPO, or for the breach of any contract or agreement to which the ISPO organization is a party, shall be finally settled by arbitration.
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