EU-Canada trade does not mean ‘surrender of sovereignty’, tribunal said

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An EU-Canada trade deal under which “investor courts” can award damages against Ireland to Canadian investors does not mean a “wholesale handing over of sovereignty” here, government lawyers at the High Court.

Michael Cush SC said that the whole TD Green Party Patrick Costello affair on certain aspects of CETA (Comprehensive Economic and Trade Agreement) can be resolved by “a good understanding” of the distinction between international obligations of the State on the one hand and the effect of CETA on Irish domestic law on the other.

While it is fair to say that CETA creates rights and obligations at the level of international law, it is not part of the internal law of the state, he argued.

Mr. Costello has placed great emphasis on the possibility of recognition and enforcement by a tribunal established under CETA of damages awarded to Canadian investors against Ireland, he said. Although the state has accepted CETA so provides, that does not make CETA part of national law, as no Canadian investor can go to an Irish court and seek an order under CETA, said the lawyer.

Rather, a disappointed investor may go to a CETA court and complain that Ireland is failing to comply with CETA’s obligations under international law.

If correct, this investor could get a court award against Ireland, he said. If the investor is not paid, the investor can go to an Irish court and seek recognition and enforcement, not under CETA, but rather under the Arbitration Act, said the lawyer.

Administration of justice

Catherine Donnelly SC, also for the State, said the court is not engaged in the administration of justice here as defined by the Constitution. Irish courts decide justiciable disputes in accordance with the law, i.e. national law, and international law is not justiciable in national courts unless it has been implemented by the ‘Oireachtas, she argued.

CETA does not give Canadian investors any rights other than those they already have under Irish law, including property rights, she argued. There is no “re-enactment of sovereignty”.

There may be an administration of justice at the international level, but it is not an administration of justice within the meaning of article 34 of the Constitution, argued Ms. Donnelly. An investor who takes Ireland to court will have to establish a CETA violation.

The lawyer was making submissions during the continuing hearing before Judge Nuala Butler of the proceedings brought by Mr Costello against the Government of Ireland, Ireland and the Attorney General.

The case raises important constitutional questions regarding the power of the executive to ratify CETA, as well as questions of EU law raised by the defense.

The Dublin South Central TD claims that the protections for Canadian investors usurp and supplant the legislative function of the legislature and the judicial jurisdiction of the Irish courts, as provided for in Articles 15 and 34 of the Constitution.

Pay level

His concerns include that there is no limit on the value of compensation that can be awarded under the investor court system and neither it, nor an appeals tribunal, will be composed of judges appointed under the Irish Constitution. There is no mechanism under CETA reserved for Irish courts by appeal or judicial review to determine whether the investor court / appellate court established under CETA has given due regard to the rights of the ‘Ireland, he said.

He believes the impact of investor protection measures is such that CETA must be put to the Irish people in a referendum.

The gist of CETA is a trade treaty designed to reduce tariffs and increase trade between the EU and Canada. The trade element has been provisionally ratified by the EU and Canada and has been applied since September 2017.

Chapter Eight of CETA, at the center of Mr. Costello’s case, provides for a system of investor protection and investor courts. If ratified, a code of rules will come into force whereby Ireland will be bound by restrictions on the establishment of investments by Canadian investors here.

The hearing continues on Friday.

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