LAST UPDATE | 11 Nov 2022

THE SUPREME COURT has ruled that the Comprehensive Economic and Trade Agreement (Ceta) cannot be ratified by the Oireachtas unless legislation is changed.

The seven-judge court made the ruling shortly at 11am today in a challenge taken against the State by Green Party TD Patrick Costello, who had argued that Ceta is unconstitutional.

In its judgment, the Supreme Court ruled that the Constitution of Ireland precludes the Government from ratifying Ceta as Irish law night stands – by a majority of four to three.

However, the Court – by a majority of six to one – also ruled that certain amendments of the Arbitration Act 2010 would, if affected, permit ratification without breaching the Constitution.

If the legislation is amended, a referendum on the matter could be avoided. The Court said that is a matter for the Oireachtas.

Ms Justice Elizabeth Dunne, Mr Justice Peter Charleton, Ms Justice Marie Baker and Mr Justice Gerard Hogan were the majority in the four-three ruling. The Chief Justice Donal Gerard O’Donnell, Mr Justice John MacMenamin and Ms Justice Ann Power were the minority.

Mr Justice Charleton was the sole dissenter on the point related to amending the Arbitration Act.

Ceta, a trade deal between the European Union and Canada, is primarily designed to reduce tariffs and increase trade between the two regions.

The agreement was reached between Canada and the EU in 2016. It came into force provisionally in 2017, but all national parliaments in EU countries need to ratify the deal before it can take full effect.

The Supreme Court ruled unanimously that the ratification of Ceta was not an obligation necessitated by membership of the EU, and as such it could be constitutionally challenged.

The Court also indicated it would grant costs in favour of Costello, pending either side contesting this.

In a statement released today, Costello said the ruling is “a significant moment in protecting the integrity of our courts system and our constitution”.

“This case raised important questions in relation to binding legal mechanisms which would grant corporations greater ability to potentially sue the State,” the TD stated.

Reacting to today’s ruling, Taoiseach Micheál Martin said: “The preliminary assessment is that a referendum will not be required, an amendment to domestic legislation will suffice – but, of course, we have to do a detailed assessment of the judgment”.

Martin told reporters in Blackpool that the Attorney General will assess the ruling “in good detail”, before the Government makes “a clear decision on that”.

Martin added that he is in favour of free trade, saying that agreements made by the European Commission to date “have been advantageous to Ireland in terms of our economy”.

“I’ve been very consistent that free trade is an essential, core element of Irish economic policy and has been since the 1960s,” he said.

Investment Court System

Costello, a TD for Dublin South Central, had warned that Ceta could impact Ireland’s ability to introduce environmental regulations.

He also argued that the deal could not be ratified without a referendum as it runs contrary to Articles 15 and 34 of the Irish Constitution.

One of the concerns raised by various opponents to the deal is the establishment of a new Investment Court System (Ceta Tribunals) that could see private companies sue member states over regulatory decisions.

“This Investor Court System would be unconstitutional as it transfers vital elements of the State’s sovereignty to external institutions not accountable to the Irish legal system. Investor Courts are a real threat to climate action and progressive public policy.” pic.twitter.com/ybivq1VtAr

— Patrick Costello TD (@Costellop) November 11, 2022

Costello argued that the Investor Court System would be unconstitutional as it transfers vital elements of the State’s sovereignty to external institutions not accountable to the Irish legal system.

Costello’s concerns included the fact there is no limit on the value of compensation which may be awarded under the investor tribunal system and neither it, nor an appellate tribunal, will be composed of judges appointed under the Constitution.

In his judgment, Mr Justice Gerard Hogan wrote that, in its current form, Ceta tribunal awards are “in substance converted almost automatically into judgments enforceable in this State in circumstances where the High Court has been deprived of its capacity to supervise such awards on the ground that they respect the constitutional identity and values of this State, together with our general duty to uphold the coherence and integrity of EU law”.

He added: “This fundamental constitutional objection would accordingly be cured if the Oireachtas were to amend the 2010 Act so that the High Court were to be expressly invested with this power in respect of the enforcement of decisions of the Ceta Tribunal.”

‘A significant moment’

In his statement, Costello also said that Investor Courts “are a real threat to climate action and progressive public policy”.

“We can see the detrimental effect of Investor Courts in the Netherlands and Italy, both states being sued for billions through the Energy Charter Treaty when they tried to stop burning fossil fuels.”

Costello continued: “We were required to have a referendum to establish the Court of Appeal, to sign up for the International Criminal Court and will need one to establish a new patent court. Today’s ruling states that such a process would be required to establish the Investor Court System which is provided for under Ceta.

“Now that the Supreme Court has decided a referendum is required to ratify Ceta it is up to the Cabinet to decide the timing of when such a referendum will be. I look forward to a vigorous campaign.”

As outlined above, if the Arbitration Act 2010 is amended a referendum on the matter could be avoided.

In September 2021, Costello lost a High Court challenge on the matter.

In that ruling, Ms Justice Nuala Butler said the ratification of Ceta was a political question and not a constitutional one.

“Ceta does not entail an unconstitutional transfer of the State’s sovereignty. Consequently, ratification of Ceta through Article 29.5.2 is constitutionally appropriate and permissible. It is a matter for the Dáil as to whether it is politically desirable to do so,” the judge stated at the time.

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With reporting by Rónán Duffy