The Iran conflict is already triggering force majeure claims across global supply chains. The space industry operates under the same legal and contractual frameworks, but with far greater structural exposure.

India just provided the clearest example of how that risk materializes.

On March 31, 2026, AsiaSat lost its authorization to provide satellite capacity in India. India's National Space Promotion and Authorisation Centre withdrew approval for AsiaSat's AS-5 and AS-7 satellites, citing national security concerns tied to AsiaSat's ownership by CITIC Group, a Chinese state-owned entity.

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The decision was not a commercial judgment. It was a sovereign geopolitical act directed at an ownership structure. Broadcasters including Zee Entertainment and JioStar, part of Reliance Industries, have had to scramble for alternative capacity. Zee has already migrated to Intelsat and ISRO's GSAT satellites.

AsiaSat has responded by firing a bilateral investment treaty trigger notice at the Indian government and sending arbitration notices to its broadcasters. The disputes are now live. And the contractual questions they will force into arbitration are ones the commercial space industry has never had to answer before.

The space sector is structurally more exposed than it realizes

Force majeure clauses in commercial space agreements typically enumerate government actions, export license denials, sanctions regimes, and regulatory prohibitions as qualifying triggering events. The assumption behind most of that drafting is that these events are unlikely edge cases. They are not edge cases anymore.

The space industry is uniquely vulnerable to geopolitically induced force majeure for three reasons that do not apply to most other sectors.

First, performance under space contracts requires regulatory approvals from multiple sovereign jurisdictions simultaneously — any one of which can be revoked for reasons entirely unrelated to commercial conduct.

Second, the technology involved is dual-use by nature; the same propulsion system servicing a commercial telecommunications satellite may fall within the scope of munitions controls.

Third, insurance and financing arrangements in the sector are often conditioned on export compliance clearances, so a single sanctions escalation can trigger cascading defaults across an entire capital structure at once.

India's 2024 guidelines made this exposure explicit. They require foreign satellite operators to work through Indian entities, factor in geopolitical ties when assessing operators, and limit service approvals to a satellite's operational life or five years, whichever is shorter.

The regulatory architecture embeds geopolitical considerations as standing grounds for revocation and non-renewal of authorizations, creating structural exposure for foreign operators at each five-year re-authorization cycle regardless of prior commercial performance.

AsiaSat's situation is not an anomaly. It is an early example of a structure that will generate more disputes as more governments follow India's approach.

The Iran parallel is already generating claims

The AsiaSat case illustrates what happens when geopolitics terminates market access cleanly through a regulatory decision. The U.S.-Iran conflict presents the same structural risk across the entire space value chain, but through a more complex and dangerous mechanism.

Since tensions escalated, commodity companies have already begun invoking force majeure. QatarEnergy declared force majeure to avoid penalties for missed contracted deliveries. Aluminium Bahrain suspended deliveries, citing shipping risks through the Strait of Hormuz.

The contractual mechanisms being invoked across those sectors are identical to those embedded in commercial space agreements.

For the space industry specifically, the exposure runs through U.S. export control law — principally the Export Administration Regulations and the International Traffic in Arms Regulations — which imposes comprehensive restrictions on the transfer of space technology involving sanctioned jurisdictions.

Iran remains one of the most heavily sanctioned jurisdictions globally. Launch service agreements, satellite manufacturing contracts, spectrum coordination arrangements, and orbital insurance policies are all vulnerable.

The compounded risk that practitioners are not yet discussing clearly enough: a sovereign ban that is itself a breach of sanctions does not automatically become force majeure.

The very act of invoking force majeure to excuse performance may expose an operator to sanctions liability if the performance they are excusing was already legally prohibited. That is not a theoretical risk. It is an active exposure for any operator with supply chain connections to the region.

What competent drafting looks like now

AsiaSat's position in its broadcaster disputes illustrates the cost of inadequate drafting. Its argument — that contracts were not India-specific and customers could continue using bandwidth to provide services elsewhere — was contractually plausible but commercially unworkable for broadcasters who had no legal alternative.

The gap between what the contract technically permitted and what the regulatory environment actually allowed is where the dispute lives.

Force majeure clauses in commercial space agreements need to specifically enumerate sanctions regime changes, export license revocations, and government-mandated service terminations as qualifying events.

They need to specify notice obligations, mitigation duties, and termination rights that flow from each type of triggering event separately. Geopolitical risk cannot be treated as boilerplate contingency language that lawyers negotiate down during a deal and never revisit.

The commercial space sector has long presented itself as an industry that transcends political borders. The legal reality of the AsiaSat dispute and the Iran conflict is that this aspiration, however legitimate, must be balanced against rigorous contractual foresight.

The disputes are already in motion. The drafting conversations should have started earlier.

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