Arbitration (Amendment) Bill 2025: Committee Stage
Seanad Éireann — 2026-05-20
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Michael McDowell (IND), National University of Ireland

None of them say it. None of them say, "This Act is clearly unconstitutional because we have written that into it." Nobody has ever made such a brazen attempt to put a fig leaf on a proposal which is either redundant or meaningless.
My second point is that the Bill purports to say that these orders are not enforceable in the State but are enforceable everywhere else. Every asset of the Irish State anywhere in the world is amenable to an action. Let us suppose that we have reserves in banks in Spain, New York or Switzerland, or gold reserves held here, there or anywhere, they are all amenable to actions in those states if they are the means whereby damages or whatever are awarded to a Canadian company. Every single asset of the Irish State abroad is amenable to it. The Irish State is amenable in any jurisdiction which accepts jurisdiction in litigation to a declaration that it is in breach of CETA and that it is liable to an investor in Ireland.
The formula that has been chosen here actually is that it would not be enforceable in the Irish State, but that excludes the vast majority of jurisdictions across the world where it is enforceable. If Ireland wants to fight a case, it has to persuade the Spanish, Swiss or German courts that Ireland signed up to this agreement on the basis that nothing in it could be enforced if it infringed the constitutional order in Ireland. If the Spanish, Swiss or German courts decide that this is a strange ground being offered as to why it should not be enforced, what might a European Union member state do? If it did not reject it outright and say it was rubbish, it would refer it to the European Court of Justice to decide whether this is a legitimate ground for contesting enforceability, in Spain, France, Germany or wherever else, of the CETA court judgment. This is the fundamental problem with Mr. Justice Hogan's formulation. What will the European Court of Justice make of this? The Government has signed up to an agreement. The Minister has said that the Arbitration Act, which is a local statute, permits him not to have it enforced within Ireland. Is that consistent with CETA, as ratified by all the other member states and now as part of European Union law? I would put my entire life's savings, such as they are, on the proposition that the Court of Justice of the European Union would rule that Ireland has signed the agreement and is bound by it. It would rule that no amendment, this way or that, either before or after it was signed, can vary Ireland's liability under it. No domestic legislation can have that effect.
I will develop this point, if I may. If this is effective, it will be effective in three years' time as well. If we suddenly woke up and said, "We forgot about the Bill that was presented to us in 2025 but we are now going to introduce the same protection." If it is good law in European law terms, it should be capable of being done before or after we ratify this agreement and before it becomes binding on Ireland. For instance, would it be unlawful to repeal the Arbitration Act with this in it if the effect of that was to lay Ireland open - because we have ratified CETA - to an action which this particular formula seeks to make unenforceable?
This brings me to a second, fundamental objection I have to this. The Minister and the Government have not said, at any point, that when it ratifies CETA it is done subject to the reservation that none of it is enforceable in Ireland, but all of it is enforceable outside Ireland against Ireland. Is the Government going to put a protocol in or a reservation in our signature to the treaty that it cannot effect the so-called constitutional order in Ireland, whatever that formula means? Is anybody seriously suggesting that we are going to do that and get away with it? One of the things we have to tease out here on Committee Stage is whether it is the intention of the Government to ratify CETA without qualification, or is it the intention of the Government to say that it has a reservation here?
I see the Minister of State nodding his head to the first proposition and shaking his head to the second. There will be nothing on paper if Ireland ratifies CETA to show this particular reservation has been made domestically as part of domestic jurisdiction in Ireland. Anybody looking at CETA with Ireland's ratification attached to it will see nothing about our constitutional order in it. There is no protection whatsoever for somebody whose job it will be thereafter to adjudicate on whether, in any particular case, an order of the CETA court or CETA appellate court is enforceable in Ireland. There will not be a trace of it in international law. It will all be found in domestic law, and in the insertion of an obscure section, namely section 25A, into the Arbitration Act 2010.
This is fundamental. If Ireland is going to ratify and execute the CETA agreement and is not going to say," By the way, back in Dublin we signed and enacted this little change by way of amendment to our Arbitration Act, which makes some possible outcomes unenforceable in Ireland", and does not make that a condition or qualification of our ratification of this agreement, it will not be worth a damn as a matter of international law. This is a fraud. If we are telling the Irish people that we have this protection internally against enforcement in Ireland but that, at the same time - and this is the crucial point - we are saying that we did not make this clear to all the other states at the time we adhered to this agreement and that we never said that our ratification was subject to a protocol or reservation along these lines and if that is the basis on which we are going to move forward, then it is completely worthless.
Selling a worthless proposition of that kind to the Irish people is a very suspect thing to do. Let us imagine what will happen if an action is brought against Ireland by a Canadian company in the French courts - if France is foolish enough to ratify this as well, I have to qualify that - or the German courts, of course, Germany has ratified it. Is a German court going to say, "Well sorry, this is the agreement. Where in the agreement does it say that you can opt out by virtue of some particular adjudications of the arbitral court, by reference to the provisions of the Irish Constitution?" The Irish lawyers are going to say, "Well, it doesn't actually, but in the Dáil and the Seanad, the Irish people were led to believe that this would be effective.". The German court will say, "Sorry, we have to interpret the treaty as we have it. If you had this problem about its enforceability on particular grounds, you should have stated that as part of your ratification process." If someone waves a copy of Mr. Justice Hogan's decision or a copy of the legislation before the court, it will say, "That is a piece of domestic legislation. We cannot consider the treaty - the CETA agreement - by reference to a piece of domestic legislation enacted in Ireland after Ireland signified its agreement to this treaty."
It will not be possible to do that in pursuance of some kind of way out of the Supreme Court's general finding in the case brought by Patrick Costello to the effect that the ratification of the agreement, as it stood, was unconstitutional. I have to express surprise at the Supreme Court's acceptance of this formula, not merely because it was not submitted to the court for adjudication, not merely because it was outside the scope of the litigation put before it or because it was, in effect, considering in advance a situation that might or might not arise depending on what the Oireachtas did but because the whole idea that section 25A cures an unconstitutionality in terms of ratifying the CETA agreement is mistaken and incapable of being stood up before any tribunal. It is ineffectual and wrong.
The other thing we have to bear in mind is that once we put our head into this particular jurisdictional noose and stand on the platform, it will be for others to pull the lever thereafter. Ireland cannot get out of this agreement, except by leaving the European Union. We are stuck with it, and we are stuck with the jurisdiction of the European Court of Justice to determine what the agreement means. It will no longer be a domestic entitlement of the Irish court system or of the Irish people, even by referendum, to say whether or not particular judgments of the arbitral court or arbitral appeal court are enforceable in Ireland. That is of huge significance. Once we ratify this, it will become part of the European furniture. We cannot get out of or denounce this agreement unless the whole of the EU decides to denounce it. Let us be clear about that. Unlike with most treaties, Ireland will not be in a position to state that it is denouncing the agreement, that it is not longer effective and that, for whatever reason, it has decided to exit it. Once this becomes ratified by all the member states that are party to it, including Ireland, the European Union will be the only body capable of reversing out of it. Individual member states will only be able to get out of their obligations under it, which last for 20 years no matter what happens, by leaving the European Union.
Let us be clear that this is going to be the law. It is not my version of the law; that is what we are going to do. We are going to put ourselves in a position where once this becomes part of the furniture of the European Union in terms of its trade portfolio of agreements, we cannot get out of, change or do anything else about it, unless all the other member states agree. We will no longer have an individual, sovereign right to effectively renounce or denounce this agreement under the international law relating to treaties. That is hugely significant.
Dr. Oisin Suttle, a member of Maynooth University's department of law, has said that once CETA is adopted, Ireland will become subject to EU law in respect of its obligations under the agreement and that only Canada or the EU, as a whole, can terminate it. 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." As already stated, even if the treaty was terminated by the EU, for whatever reason, obligations in respect of investors and the investment court system provided for in the agreement, will remain in place for a further 20 years.
Why do we want to do this? This is the fundamental problem I have with this. If this were necessary to attract trade or investment from Canada or to permit trade or investment from Ireland into Canada that would otherwise not occur, an argument could be made that this was a good thing from Ireland's point of view. Let us say, for instance, that there were Canadian firms lining up to invest in Ireland saying that, until we became party to CETA, they were not going to invest and they would not trust our system to protect them if they made an investment in Ireland. If that were a plausible scenario, then fine. Then the people, through the Legislature, would have to ask where the balance lay there. Is there a whole load of investment that is not going to take place or is going to go elsewhere other than Ireland if we do not accept this proposition, and is the only way to attract that investment to accord rights to investors from Canada to have these supraconstitutional rights of enforcement against Ireland? If that was the question we had to decide, I would sit down and say we should examine it in detail. However, let us also be clear that the free trade aspects of CETA have been in operation for nine years. During that period, Irish exports to Canada have quadrupled and Canadian exports to Ireland have increased from €1 billion to €10 billion annually. What do we want on top of that? What is the issue with us not accepting that these arbitral investment courts should be in place? What has it prevented happening that otherwise would happen?
That is where we come to the fundamental absurdity of Ireland not thinking of its own self-interest. If I were a Canadian investor or the chief executive of a major Canadian company and I had to choose between Ireland and, say, Bulgaria as the location for my €10 billion investment in a huge piece of national infrastructure or whatever, I would say Ireland was a pretty rock-solid place. The Judiciary is independent and respected. The common law system and its principles as known in Canada apply in Ireland, too. The Irish courts are predictable. I would get as fair a hearing in the Irish courts as we would in the arbitral court. However, what we are doing here is effectively saying we are all Bulgaria or Slovenia. We are all as doubtful in the minds of investors as the most doubtful party to this agreement and for that reason, any investor is to be given the same rights against Ireland as it has in respect of the dodgiest state. Who is actually asking for this? Are there Canadian companies saying they would love to come to Ireland but the system of law is insufficient protection for them? Not merely do I not believe that; I believe that is an absurd proposition and in those circumstances, it should not be entertained as a reason.
The flip side of that coin is that if there is any Irish company - there are many Irish companies investing in North America - saying it is a bit worried about the Canadian system and how it may confiscate or completely compromise the company's investment if it invested in Canada and that there would have to be a special arbitral court before investing in Canada, then I have never heard of such an Irish group of would-be investors. The idea is simply grotesque.
Some people have come with a slightly old-fashioned view about sovereignty. Some people have stated that we cannot compromise our sovereignty in any way. We do compromise our sovereignty by international trade agreements to which we are a party, but in all of those agreements, except this one, we are free to say that if it comes to Ireland, say, nationalising the road system in which Canadians have invested or whatever it is - getting rid of toll roads owned by Canadians or something like that, if it comes to a decision of that kind - and we are told this would violate an international agreement, we can actually denounce that agreement as a matter of international law and say that, in future, toll roads are susceptible to nationalisation. If the Canadian investors in the toll road system came to Ireland and said they had effectively been expropriated or seriously damaged by the new legislation brought in in Ireland, which violated their rights as investors, the Irish High Court or Supreme Court would look at that proposition and see if it was true. If they had been short-changed by the actions of the Irish State or whatever, they would be entitled to compensation because they did a deal that guaranteed this would not happen.
That would be fine but this is essentially different. It is fundamentally different in that we are saying, for the first time, that Ireland is agreeing that no matter what the Irish courts think of a dispute or their own neutrality in a dispute, an investor has the right to go to an investment court and obtain a judgment that will be enforceable in Ireland or anywhere else in the world. That is what we are doing, and we are being told it is all right to do this because the Arbitration Act has been amended and a court before which such a claim is brought in future can ask itself the question in Ireland, as regards a case brought in Ireland, whether enforcement of the order would, in some sense, jeopardise Ireland's constitutional order. It is not worth the paper it is written on because anybody who is dissatisfied or institutes a claim in Ireland, for instance, and who does not go to Europe directly can, if they get a negative outcome in the courts, demand, as of right, that the European Court of Justice should adjudicate on whether section 25A of the Arbitration Act is sufficient as a matter of European law to withhold enforcement of the agreement in Ireland. Anybody who is dissatisfied with an Irish court's decision on this matter, where section 25A is invoked, is entitled, as of right, to ask the European Court of Justice if it is valid and whether it gives Ireland a way to ignore and fail to enforce in Ireland the award of the investment court.
You cannot predict everything but I can predict one thing about the European Court of Justice, having appeared there on occasion. That court will throw out the Irish objection on its backside and tell us, sorry, but we signed this agreement, we had the opportunity not to sign the agreement, nobody forced us to sign the agreement and we never wrote into the agreement that section 25A applied as a special protocol to Ireland, yet we are now waving an Act that was passed some time in 2026 in front of the court's nose and telling it that the Act lets us off the hook on constitutional grounds.
That is what the Government is predicting the European Court of Justice will say, namely, that it never thought of that one and, goodness, section 25A of the Arbitration Act gives Ireland an out on this. The chance of the European Court of Justice accepting that proposition is, to put it mildly, absolutely zilch.

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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/2026-05-20/debate/main
Retrieved: 2026-08-14T04:54:58+00:00
Sitting date: 2026-05-20