Ms Justice Baker said the proposed ratification of the EU-Canada trade agreement CETA was incompatible with the finality of Irish court decisions and the democratic nature of the State, but could be permitted if the Arbitration Acts were amended.
Her judgment, delivered on 11 November 2022 as part of the Supreme Court’s consideration of Patrick Costello’s appeal, concluded that CETA was not necessitated by Ireland’s EU membership and that ratification would not breach the Constitution’s protection of legislative sovereignty. Baker J agreed with other judges that CETA’s investor dispute mechanism could impermissibly affect judicial sovereignty.
The central concern in her analysis was that an investor could pursue a claim before a CETA tribunal after unsuccessfully litigating the same dispute in Ireland. Although CETA requires an investor to discontinue an ongoing domestic case, Baker J said it did not prevent a later claim following the conclusion of domestic proceedings. The tribunal could make an award based on the same facts under different standards.
Baker J said enforcement of a CETA award in Ireland would be “almost automatic”, with only narrow grounds for refusal. She considered that an Irish court could therefore be required to enforce an award that materially conflicted with a final Irish court decision or a fundamental principle of Irish law. She also raised concern that a tribunal might have to resolve disputes about the meaning of domestic law, despite CETA treating that law as fact and limiting the tribunal’s authority to interpret it.
She distinguished this concern from the effect on legislation. While CETA awards could have a chilling effect on government decisions, she agreed that this did not make ratification impermissible under Article 15 of the Constitution, which protects the Oireachtas’s legislative role.
Baker J also considered the CETA Joint Committees’ power to issue binding interpretations of the agreement. She said that power could alter CETA’s meaning without full agreement by member states or domestic oversight, affecting the democratic nature of the State.
In answering the appeal questions, Baker J said ratification was compatible with Article 34 insofar as it did not impermissibly withdraw disputes from Irish courts, but incompatible with the finality of their decisions. She answered that ratification was incompatible with Article 5, which concerns the democratic nature of the State, and said an amendment to the Arbitration Acts could provide a way forward by allowing Irish courts, in certain cases, to review an award before enforcement. The judgment records Baker J’s answers; it does not itself enact that proposed amendment.