High Court: Constitutional challenge to CETA by Green Party TD rejected
The High Court has rejected a constitutional challenge to the Comprehensive Economic Trade Agreement (CETA) made between the EU and Canada. The action was brought by Mr Patrick Costello, a Green Party TD, who claimed that CETA would adversely affect the State’s ability to make environmental regulations.
About this case:
- Citation: IEHC 600
- Court:High Court
- Judge:Ms Justice Nuala Butler
The plaintiff made a number of significant claims about the nature in which the CETA would operate, including that the terms of the CETA would interfere with State sovereignty and that CETA Tribunals would be engaged in an impermissible administration of justice within the State. However, each of these claims were rejected by the court based on an analysis of the CETA terms and the case law.
The following is a highly-abridged summary of the issues in the case. The CETA was agreed between Canada and the EU in October 2016 and was due to be ratified by Ireland as a member state of the EU. The CETA was a highly technical document which governed trade provisions between the parties.
The provisions of the Agreement included safeguards for Canadian investors in the EU. The word “investment” was given a broad definition in the CETA, meaning that it could apply to any asset held in a member state. The CETA also provided that Tribunals would be set up to adjudicate upon any claims that an investor might have against a member state and provide compensation.
The Agreement also provided for a Joint Committee to be established, which would be the administrative body of the CETA and would be able to make binding decisions on parties under the Agreement.
The essential claim made by Mr Costello was that the provisions of the CETA provided for a transfer of State sovereignty which was impermissible without a referendum. It was argued that the CETA delegated law-making and judicial powers away from the State and therefore breached Articles 15.2 and 34.1 of the Constitution.
The State submitted that the CETA was an international agreement which did not have binding, direct effect on domestic law. As such, it was argued that legislative authority was not required for the State to enter the Agreement.
Delivering judgment in the case, Ms Justice Nuala Butler began by examining the interaction between international law and the Constitution. The court held that the CETA did not affect the law-making or judicial power of the State. First, the court considered the terms of CETA and held that it explicitly provided that the Agreement would not have domestic effect within member states. The Agreement only operated at the level of international law, the court said.
Secondly, the court held that Irish constitutional law had established that the ratification of an international treaty did not give that treaty domestic effect within the State. The court considered In Re O Laighleis  IR 93 and J. McD v. PL  2 IR 199, holding that the CETA only created rights and obligations as a matter of international law.
The court was also not satisfied that the CETA required a delegation of State sovereignty which would have been inconsistent with Crotty v. An Taoiseach  IR 713. The court considered the comments in Pringle v. Ireland  3 IR 1 and noted that there was a significant difference between the CETA, which was a technical trade agreement, and the treaty in Crotty, which required the future coordination of foreign policy on an unlimited range of issues. In contrast, the policies and scope of CETA were clearly set out and therefore the limit on the Government’s discretion had not been exceeded, the court said.
The court said that:
“Crotty cannot be read as simply precluding the entry by the State into international agreements which will curtail the ability of the State to act in a manner contrary to those agreements. […] To limit the State’s ability to enter into such agreements purely because they may influence how the Government or the Oireachtas may choose to act in light of the international commitments thereby entered into would restrict rather than protect its sovereignty.”
Administration of justice
On the issue of whether the CETA Tribunals would be engaged in an impermissible administration of justice, the court considered the test for an administration of justice outlined in McDonald v. Bord Na gCon  IR 217 and more recently in Zalewski v. Workplace Relations Commission  IESC 24.
The court was satisfied that the first three limbs of the McDonald test (subject-matter, decision and finality) were met. The court held that the fundamental question was whether the establishment of the new dispute resolution mechanism under the CETA subtracted from the Irish courts’ traditional jurisdiction.
On balance, the court did not believe that the Irish courts’ jurisdiction was interfered with by the CETA, stating that no clear analogy could be drawn with the facts in Zalewski. Rather, the CETA was an international agreement which did not represent a legislative choice made by the State in a domestic sense. Owing to the international nature of the Agreement, disputes under CETA could never fall within the exclusive jurisdiction of the parties and therefore could not be a subtraction of the Irish courts’ jurisdiction.
The court noted that many of the plaintiff’s concerns had already been answered by the CJEU in Opinion 1/17 30th April, 2019. The CJEU held that the CETA Tribunals did not form part of the judicial system of the parties. The CJEU emphasised that the CETA Tribunals did not adversely affect the EU legal order. It stated that the Tribunals operate within the international sphere and that parties retain a significant margin of appreciation to introduce public interest measures without attracting liability under CETA.
The court also agreed with the State that the CETA Tribunals would not be administering justice within Ireland because the disputes in the Tribunals would not be justiciable under national law. The court accepted a submission that international law was not justiciable by the Irish courts unless expressly provided for by the Oireachtas.
The court stated: “The disputes to be determined by the CETA Tribunal are non-justiciable, not because they are inherently incapable or unsuited to judicial resolution but because the Irish courts do not have jurisdiction to apply the law to which they are subject.” The court reached this conclusion because CETA was expressly framed as not being directly effective and because it was outside the judicial systems of the parties.
Further, the fact that a Canadian investor may have a choice of pursing a claim in the CETA Tribunal or in the Irish courts was not a subtraction of jurisdiction, the court said.
Finally, the court considered submissions made by the State on the entitlement of the plaintiff to raise the constitutional challenge to the case. The court determined that there was no difficulty with Mr Costello raising hypothetical arguments about potential consequences of the ratification of the CETA (Cahill v. Sutton  IR 269).
However, the court accepted that Mr Costello could not raise equality arguments in respect of a putative Irish investor versus a putative Canadian investor. The argument was one which could be made by a future Irish investor after ratification of the CETA and therefore it should not be raised by the plaintiff in the proceedings.
The court rejected the constitutional challenge to the ratification of the CETA on the basis that Mr Costello failed to establish that the ratification would be clearly unconstitutional.