Arbitration (Amendment) Bill 2025: Second Stage
Seanad Éireann — 2026-05-06
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Michael McDowell (IND), National University of Ireland

I welcome the Minister of State. I want to put on record my total opposition to the passage of this legislation. I believe it to be unnecessary, legally dishonest and potentially calamitous for Irish interests. As a preliminary point, I wish to state that I do not believe any Irish interest is served by our ratification of CETA. The free-trade elements of CETA have already been in operation for nine years. In that time, Irish exports to Canada have quadrupled and Canadian exports to Ireland have increased from €3 billion to €10 billion annually. What is at issue here is the loss of sovereignty in respect of the protection of investors via a court system which would have the capacity to overrule decisions of the Irish courts.
This Bill and the ratification of CETA are wholly unnecessary for the promotion of tariff-free trade between Ireland and Canada or, indeed, between Ireland and Chile. It is dishonest to suggest otherwise. When former Deputy Patrick Costello challenged the proposal to ratify CETA, I fully supported him. The Supreme Court, by majority, ruled that the proposed ratification was unconstitutional. Currently, 17 EU member states have ratified CETA, while ten, including Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia, have not.
The grossly offensive part of this Bill is that it seeks to permit Ireland to ratify a treaty on foot of a passage in one of the judgments of the Supreme Court, that of Mr. Justice Gerard Hogan, which commanded majority but not unanimous support in the Supreme Court, to the effect that the amendment of the Arbitration Act 2010 to permit the High Court to render any awards made by the arbitral court or by the appeal arbitral court provided for in CETA unenforceable if enforcing the award would compromise "the constitutional identity of the State or fundamental principles of our constitutional order" or "our obligation to give effect to EU law ... and to preserve its coherence and integrity". At paragraph 235 of the Hogan judgment, it is suggested that the Irish courts could render unenforceable any such decision which is "at odds in some material way with the legislative juridical autonomy of the State". Those grounds find some reflection, but not adequate reflection, in the proposed section 25A to be inserted in the Arbitration Act 2010.
This Bill is grossly defective, and probably deliberately so, in that the recasting of paragraph 235 of Mr. Justice Hogan's judgment is reduced to the following ground for unenforceability, namely that the award would compromise "the constitutional order of the State". That ground is utterly vague and unexplained. Does it mean, for instance, that a decision by the Oireachtas which affected any Canadian investment adversely by statute would always trump or defeat an arbitral court award under CETA? What is the constitutional order of the State? I believe that the Bill is fraudulent insofar as Ireland would, if it ratifies CETA, be bound by any subsequent decision of the European Court of Justice, ECJ, as to whether invocation by Ireland of its constitutional order was a permissible basis for non-implementation of an award. The folly of assuming that the Irish courts would be autonomous in such circumstance to determine such an issue and would not be subject to being overruled by the ECJ is obvious. Under Article 29 of the Constitution any ECJ ruling that Ireland might not invoke its constitutional order as grounds for non-enforcement of an arbitral award would be binding on the State and on the Supreme Court. If the ECJ decided this ground was not valid, we would have to surrender it. As Dr. Oisin Suttle of Maynooth University's department of law has observed, Ireland is subject to EU law in relation to its obligations under CETA. Only Canada or the EU as a whole can terminate CETA. In his words, "It is Ireland’s choice to be bound by the treaty but once bound, it will take the EU and its member states, acting together, to terminate it." Even if the treaty were terminated, obligations in relation to investors and being subject to the investment court system would remain in place for a further 20 years.
The fundamental problem with assuming that amending the Arbitration Act to permit non-enforcement on constitutional order grounds is that the ECJ would very likely rule against such a decision by the Irish court. Far from preserving Irish juridical sovereignty, the provisions of the new section 25A would render it extremely likely to be swept aside later at EU court level. Unfortunately, the safety valve proposed in Mr. Justice Hogan's judgment is probably worthless if disapproved of by the European Union and by its courts. Nor are we informed - and this is an important point - as to whether the reservation embodied in section 25A will be explicitly provided for in Ireland's ratification process, whether by means of some protocol or reservation.
I draw the Minister of State's attention to the minority judgment of Mr. Justice Charleton, at paragraphs 61 and 62, where he, very credibly, states that any suggestion that Ireland's invocation of section 25A would trump the decision of the arbitral courts is lacking in credibility. The likely outcome is that we would be told that this section is inoperable as a matter of European law. If it is not part of our ratification, section 25A is virtually worthless as a guarantor of Irish juridical sovereignty. I do not hear from the Minister of State or the Government any proposal whatsoever to add to Ireland's ratification of this treaty an exception protocol or reservation of the kind suggested by this amendment to the 2010 Act.
The Government proposes to subvert our constitutional independence with a rickety and threadbare circumvention of the pure meaning of CETA in order to permit Ireland to ratify CETA during its Presidency and to satisfy Canadian interests on the occasion of premier Mark Carney's forthcoming visit to Ireland. That is a disgraceful basis on which to legislate in haste without addressing the points that I am raising and the other grave and dangerous pitfalls implicit in this Bill that deserve to be carefully considered during further debate in this House. There are many reasons for this House to fulfil its function to carefully scrutinise this Bill and to avoid any guillotine being imposed in the context of its passage. I hope to return to those issues on subsequent Stages of this House's consideration of the legislation.
Globalisation has gone so far, but the defences against globalisation are the granular defences established by nation states in their constitutions. This Bill proposes to give investors in Canada and Ireland, but particularly Canadian investors, the right to tell Ireland what to do, even if our Legislature and Government differ from their views. This is an elevation of capital investment to an unnecessary height. It is conferring on it status on a pedestal, which is unnecessary.
The following point is hugely important. It is not in our interests to do this for the reason I am about to outline. It may well be that Canadian investors would suspect that the Bulgarian Supreme Court might do them down. It is perhaps credible that they would suspect that many of the European states are not to be trusted as guarantors of investors' rights. However, the point is that Ireland has an existing comparative advantage because the Canadians trust us and, as the Supreme Court stated, we trust them. We trust their courts; they should trust our courts. They should not in those circumstances seek to impose, in the interests of capital investment in Ireland, the right to have decisions foisted upon the Irish people against the wishes of the Irish Legislature.

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Source: Houses of the Oireachtas. Licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). The Official Report is revised after first publication; the fetch timestamp below identifies the version quoted.

Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2026-05-06/debate/main
Retrieved: 2026-08-14T04:54:54+00:00
Sitting date: 2026-05-06