Ireland’s proposed ratification of EU-Canada trade deal unconstitutional as Irish law stands, Supreme Court rules

The government and Dail’s proposed ratification of a major trade agreement between the EU and Canada is unconstitutional as Irish law now stands, the Supreme Court has ruled by a four to three majority.

The ratification of the Comprehensive Economic Trade Agreement (Ceta) would “breach the judicial sovereignty of the State” contrary to the Constitution, the majority held.

[ Taoiseach says Ceta ruling shows referendum not required to ratify trade deal ]

The creation of a tribunal system under Ceta, with power to make enforceable decisions on disputes between Canadian investors and EU member states, creates a “parallel jurisdiction” in breach of Article 34, which requires justice shall be administered in courts established by law in the manner provided for by the Constitution, Ms Justice Elizabeth Dunne said.

She and five colleagues agreed the government might cure the unconstitutionality and ratify the Ceta if certain amendments to the Arbitration Act are effected.

Irish exports to Canada could double in five years, according to report

---

‘We can have trade without investor courts’: Greens’ anti-Ceta faction are not for turning

---

Suspended Green TD indicates he would vote against Coalition over Ceta trade deal

---

TD’s case over Ceta shines a light on contentious investor courts system

---

Mr Justice Gerard Hogan said the amendments are necessary because Ceta, as of now, means investor tribunals may make enforceable awards to investors without the High Court having any power to examine if such awards respect the constitutional identity and values of this State and EU law. The High Court would need to be expressly invested, by legislation, with this power, he said.

Mr Justice Peter Charleton, the only judge who disagreed with that possible solution, said the investor tribunal system involves ceding legislative sovereignty and gives the tribunal system powers “without limit” which “cannot be exercised on any democratic basis”.

While Irish law will be a matter of fact for the Ceta tribunals, the reality is that, through tribunal decisions, “a new system of law applying to Canadian investors in Ireland will arise”, he said.

The solution proposed by his colleagues is “insufficient” and may not be possible because it required a protocol to the Ceta which is “fundamentally contradictory” to the agreement, he said.

The court on Friday allowed an appeal by Green Party TD Patrick Costello, represented by John Rogers SC, with Donnchadh Woulfe BL, instructed by FP Logue solicitors, over the High Court’s rejection of his challenge to the constitutionality of the proposed ratification of Ceta.

Agreed between Canada and the EU in 2016, the Ceta is primarily a trade treaty designed to reduce tariffs and increase trade between the two parties. It came into force provisionally in 2017, but all national parliaments in EU states need to ratify the deal before it can take full effect.

The section not yet in force, which is dependent on EU member state ratification, is concerned with investment protection and was the focus of Deputy Costello’s case.

It provides for an arbitral process, including an appeal body, under which investors may sue and get enforceable compensation from member states over laws and other measures curtailing their freedom of action as investors.

Mr Costello claimed this involved a constitutionally impermissible transfer of State sovereignty, would negatively impact on the State’s ability to make policy, particularly environmental regulations, and could not be ratified by the Dáil without being approved by the people in a referendum.

He secured a direct appeal to the Supreme Court after the High Court dismissed his case last year. All seven judges gave individual judgments on the appeal on Friday.

All rejected the State’s argument that ratification of Ceta is an obligation necessitated by EU membership making it immune from constitutional challenge.

Four – Ms Justice Dunne, Mr Justice Charleton, Ms Justice Marie Baker and Mr Justice Hogan – ruled ratification would breach Article 34 because it would infringe Irish juridicial sovereignty by permitting an international tribunal to make binding decisions enforceable in Irish law.

The Chief Justice, Mr Justice Donal O’Donnell, Mr Justice John McMenamin and Ms Justice Ann Power, disagreed with that finding.

Three judges – Judges Charleton, Baker and Hogan – ruled ratification of Ceta would offend Article 5 of the Constitution and the democratic nature of the State by permitting interpretation and therefore amendment of Ceta by the Ceta Joint Committee without democratic oversight.

All except Judge Charleton held that ratification by the government and Dail would not breach the Constitution if provisions for enforcement of awards of the Ceta tribunal under the Arbitration Act were amended in a manner proposed by Mr Justice Hogan.

After the judgment, Deputy Costello said the case showed deals like Ceta are complex agreements not just about trade. “We welcome trade, it is the investor courts that are the dangerous bit.”

“”For the court to say clearly today that these investor courts infringe on our own courts sovereignty and independence and function is a really strong, powerful statement.”

If the Government opts to amend the Arbitration Act to allow for ratification, he would still have concerns about the “chilling effect” of investor courts on Ireland’s ability to pass progressive legislation, including concerning the environment and workers’ rights, the TD said