Deepsea Mining Companies Bring Landmark Claims Against The International Seabed Authority Alleging Violation Of Contractual Rights And Due Process Failings

Nauru Ocean Resources Inc (NORI) and Tonga Offshore Mining Ltd (TOML) have each filed claims pursuant to the United Nations Convention on the Law of the Sea (UNCLOS) against the International Seabed Authority (ISA) following their identification by the ISA as possibly non-compliant with their respective contracts for deep-sea exploration in the Pacific Ocean (the Exploration Contracts). Both companies are subsidiaries of Canada's The Metals Company (TMC). The claims have been filed before the International Tribunal for the Law of the Sea (ITLOS).

The companies are sponsored by their respective Pacific island states – Nauru and Tonga – under UNCLOS’s framework regulating activities in the "Area" (meaning the seabed and ocean floor and subsoil thereof, beyond the limits of national jurisdiction). Each sponsoring State is responsible for ensuring the companies' compliance with international law.

The Exploration Contracts with the ISA relate to the Clarion-Clipperton Zone (CCZ), an area rich in polymetallic nodules containing copper, manganese, nickel and other materials of critical importance to the energy transition and the electronics sector. The Exploration Contracts each cover approximately 75,000 square kilometres and were granted in 2011 and 2012 respectively. NORI and TOML have both applied for an extension.

The draft Exploitation Regulations, which will govern exploitation of mineral resources in the Area, have been under development by the ISA since 2014 and remain unfinalised. As a consequence, companies investing in exploration activities – including NORI and TOML – do not have certainty as to the regulatory regime that will govern any subsequent exploitation activities. The nature and ongoing existence of the contractual protections granted in relation to exploration are therefore particularly important – a point raised by multiple companies applying for extensions.

These claims against the ISA arise in the context of tension in the international deep-sea mining regime. In April 2025, US President Donald Trump signed an Executive Order aimed at fast-tracking mining permits for seabed minerals in areas beyond United States national jurisdiction, effectively permitting commercial exploitation in the Area outside the international regulatory framework established under UNCLOS and overseen by the ISA. TMC, through its US subsidiary, has applied for a consolidated exploration license and commercial recovery permit relating to polymetallic nodules in the CCZ.

The challenges associated with the competition for governance and economic exploitation of the Area are unlikely to resolve themselves soon, particularly as there is no committed timeline for finalising the Exploitation Regulations. The arguments made in, and outcome of, the claims brought by NORI and TOML will be of significant interest to other commercial parties contemplating or participating in deep-sea mining activities outside areas of national jurisdiction, and to their investors. The implications of these developments for commercial parties are discussed further below.

The Claims against the ISA at ITLOS

The claims concern actions by the ISA Council and the ISA's Legal and Technical Commission (LTC) in connection with an inquiry into the companies’ possible non-compliance with their contractual obligations under their Exploration Contracts, including the obligation to comply with applicable law (including UNCLOS). The two claims differ slightly in emphasis. NORI focuses more prominently on the impact of the inquiry on its application to extend its Exploration Contract and also alleges inconsistencies in the ISA’s treatment of NORI’s extension application compared with other applicants. TOML focuses more heavily on the overall harm caused by the inquiry to its legitimate interests in its Exploration Contract and its record of compliance with the ISA's regulatory framework, alleging that TOML is already prejudiced in its ability to participate in the inquiry through the ISA's failure to provide TOML with information.

However, the substance of each claim can be considered together - the companies allege in summary that: 

1. their identification as requiring "specific attention to possible non-compliance" was taken without lawful procedural basis and in breach of procedural fairness, transparency, due process and the ISA's criteria and methodology for identifying contractors at risk of non-compliance (the due process ground); and
2. the ISA has breached its obligation under the Exploration Contracts and UNCLOS to exercise its powers and functions in good faith.

Each claim is accompanied by a request for provisional measures, ordering that, unless and until the alleged procedural defects of the inquiry have been remedied, the ISA should not take any decision that would have the effect of prejudging, refusing or otherwise adversely affecting the companies' applications for an extension of their Exploration Contracts.

Broader regulatory and geopolitical context and implications for UNCLOS States 

The ISA, which comprises 168 member states plus the European Union, was established in 1994 under Part XI of UNCLOS and its implementing agreement to regulate deep-sea mining activities in international waters. The ISA’s main functions are to (i) adopt regulations for exploration and exploitation activities in international waters and (ii) consider and approve contract applications for such activities. We discuss the regulatory framework for deep-sea mining further here. 

Approximately 90 per cent of UN Member States have ratified UNCLOS, which asserts that the Area and its resources are the “common heritage of mankind” and are “vested in mankind as a whole”. This approach prevents exploitation by only the most financially and technically capable States. The UNCLOS States Parties demonstrate a diversity of views on the question of exploitation of the seabed through deep-sea mining, including the pace at which it should be permitted.

The United States, which has never ratified UNCLOS, cannot sponsor exploration by a commercial party under the UNCLOS regime. It does not accept that the seabed mining provisions of UNCLOS represent customary international law and has moved towards unilateral permitting of deep-sea mining activities in the Area. The US approach directly challenges the exclusivity, if not the legitimacy, of the UNCLOS deep-sea mining regime. In response to the Executive Order, the ISA Secretary-General Leticia Carvalho asserted that “no state has the right to unilaterally exploit the mineral resources of the [deep sea] outside the legal framework established by UNCLOS”.

In the context of a global race to secure supplies of minerals and against the backdrop of the delay in developing the Exploitation Regulations, the US's actions cannot be regarded in isolation and may influence the behaviours of other States, including UNCLOS States Parties. 

The implications for an UNCLOS State Party of engaging with a separate regulatory regime – including through the participation of a commercial party with the nationality of that UNCLOS State Party – are yet to be explored (e.g. TMC's US subsidiary has applied for a licence under the US regime, whereas TMC's parent company is Canadian, i.e. has the nationality of an UNCLOS State Party). Article 139 of UNCLOS provides that States Parties shall have the responsibility to ensure that activities in the Area, including by natural or juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals, are carried out in conformity with UNCLOS.

Implications of the recent developments for Commercial Entities

The progress and outcome of the claims against the ISA and the ongoing development of the Exploitation Regulations are significant for commercial entities with interests in deep-sea exploration and mining. In particular:

• Regulatory uncertainty and project risk: The combination of unfinished Exploitation Regulations, US unilateral permit issuance, the possibility in due course of other States taking a unilateral approach and the scrutiny of the ISA's decision-making in the ITLOS proceedings all contribute to a climate of significant regulatory uncertainty. Commercial entities should conduct rigorous due diligence on the regulatory environment applicable to any proposed deep-sea mining activity, including an assessment of the risk that operations conducted outside the UNCLOS framework may attract, including by way of legal challenge.
• State intervention in activities of their nationals in the Area: For any commercial party embarking on activities outside the UNCLOS regime (including by way of a licence granted by the US or another State), there is a risk that its home state of nationality may intervene in those activities consistent with its Article 139 obligations.

Conclusion

The regulatory landscape for deep-sea mining is at an inflection point. With the ISA Exploitation Regulations still in development and no settled timeline for their finalisation, and the US unilateral framework directly challenging the UNCLOS regime, the progress and outcomes of the ITLOS proceedings will be watched closely by commercial parties, sponsoring States and environmental stakeholders alike.

Commercial entities operating in, or contemplating entry into, the deep-sea mining sector should engage proactively with the evolving legal and regulatory environment, ensuring that their contractual rights, corporate structures and compliance strategies are positioned to withstand heightened scrutiny from multiple directions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.