High Court dismisses Ceta challenge by Green Party TD Patrick Costello

The High Court has dismissed a challenge by Green Party TD Patrick Costello over the constitutionality of aspects of the Ceta EU-Canada trade deal.

In a detailed and lengthy judgement dismissing the action, Ms Justice Nuala Butler said she was satisfied that Mr Costello had "not established that the ratification of the 2016 Ceta in the manner proposed would be clearly unconstitutional".

The judge, who heard the case over several days last July, gave her decision in the Dublin South Central TD’s challenge against the constitutionality of the agreement that provides for “investor courts”. The function of the investor courts is to decide complaints by Canadians who invest in EU member states.

In his proceedings against the Government of Ireland, Ireland and the Attorney General, Mr Costello claimed the protections for Canadian investors in chapter 8 of Comprehensive Economic Trade Agreement (Ceta) usurp and supplant the law-making function of the legislature and the judicial competence of the Irish courts as set out in Articles 15 and 34 of the Constitution.

Chapter 8 provides for an investor protection and investor tribunal system.

If ratified, a code of rules will come into force under which Ireland will be bound by restrictions relating to establishment of investments by Canadian investors here.

Mr Costello’s concerns included 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.

He was further concerned about the potential ratification on the Ireland’s ability to introduce regulation, particularly in the environmental sphere.

The State, he argued could be made liable for damages for loss suffered by a Canadian investor as a result of Irish environmental regulations.

Ceta’s ratification could, Mr Costello further claimed, have a chilling effect of the State’s willingness to introduce desirable regulations, regarding the environment.

There was no mechanism under Ceta reserved for the Irish courts via appeal or judicial review to determine whether the investor tribunal/appellate tribunal established under Ceta has given due weight to the rights of Ireland, he claimed.

Executive power

The respondents denied the disputed provisions involve a transfer of sovereignty and contend, inter alia, Ceta creates rights and obligations at the level of international law but is not part of the domestic law of the state.

They also rely on EU law. They argued that Ceta involves an exercise of the executive power of the State to enter into an international agreement which, they argued, is fully compatible with the Constitution.

In her judgement Ms Justice Butler said that Ceta “did not entail an unconstitutional transfer of the State’s sovereignty.”

Ratification of the agreement, through Article 29.5.2 was constitutionally appropriate and permissible, she said.

“It was a matter for the Dáil as to whether it is politically desirable to do so,” the judge added.

The judge said that the Ceta is an international agreement, which if ratified, will bind the state as a matter of international law.

However, under its own terms, Ceta, if ratified, “will not have a direct effect in Ireland and cannot be invoked before the Irish courts.”

The judge held that tribunals set up under Ceta will not have jurisdiction to declare any provision of Irish law or any act taken by an Irish authority to be invalid.

As Ceta will operate only at the level of international law its provisions cannot be characterised as laws made for this State, which would be in breach of Article 15.2 of the Irish Constitution.

The decision-making power under the Ceta does not, the judge added “amount to a power to make laws for this State.”

Decisions made by bodies established under the Ceta agreement cannot be characterised as laws.

The judge accepted that the jurisdiction to be exercised by tribunals established under Ceta do have the characteristics of justice.

However, such tribunals will not be an administration of justice under the Irish constitution, because the disputes these tribunals will determine are not justiciable under Irish law.

This is because they will be determined only as matters of international law, the judge said.

While investors will have a choice of which jurisdiction to bring their claims, bringing a claim before a Ceta tribunal does not amount to a subtraction of jurisdiction from the Irish Courts, the judge said.

Consequently, the judge said that the creation of Ceta tribunals is not contrary to the Irish Constitution, the judge added.

The judge also said that Mr Costello did have the legal standing to bring this claim aimed at preventing the ratification of Ceta by the method proposed by the State.

However, he was not permitted to make arguments specifically invoking the rights and interests of other third parties, who may wish to bring proceedings if and after Ceta is ratified.

The judgement was delivered electronically on Thursday and the matter will return before the court next month for final orders.

Speaking afterwards, Mr Costello said he would take time to study the judgement before deciding on whether to appeal.

There were significant issues in the case “that need to be considered further and would benefit from being clarified by the Supreme Court”.

“The reality is Ceta and the investor court system remain a huge concern, and put simply are a threat to meaningful climate action and other progressive policies required across the EU,” the TD said.