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Ireland's political and cultural magazine
October-November 2025 53
Clause and effect
CETA’s investor-court system could let
Canadian-backed investments sidestep
Ireland’s new FDI-security screening —
creating legal and economic risks.
By Edmund Honohan
B
efore our Presidents sign a Bill
into law, they may refer it to the
Supreme Court for a
constitutional check – after it has
passed both Dáil and Seanad.
There is no comparable option for proposed
executive actions; a citizen must challenge
them instead.
When Government moved to ratify the
2016 EU-negotiated Comprehensive
Economic and Trade Agreement (CETA) with
Canada, Green Party TD Patrick Costello
sought a court declaration that ratification
was unconstitutional, either because of the
treaty’s substance or because Government
was treating ratification as an executive act
under Article 28 of the Constitution which
defines executive functions.
In late 2022, seven written Supreme Court
judgments (about 185,000 words) produced
a split decision with the majority reasoning
that because CETA awards would be
(essentially) automatically enforceable in
Ireland through domestic law, the treaty
would improperly transfer the administration
of justice away from Irish courts, which would
be a loss of “juridical sovereignty”. The risk
that a CETA tribunal might issue an award that
would then be enforced within the State in a
way that infringed Ireland’s constitutional
identity or fundamental constitutional
principles made ratification unconstitutional.
Six of the seven suggested that amendment
of the Arbitration Act could allow ratification
The Court did not rule on CETA’s policy
merits. Judges Hogan and Charleton warned
that investor rulings could aect areas such
as planning, land zoning, licensing, taxation
and rent control, and that today’s amplified
purchasing power of investment capital
touches assets of national significance. This
all seems to be of limited concern to the
Government: asked in September 2025 about
CETA giving too much power to private
companies, the Taoiseach rejected the
argument, saying “I was never overly
concerned about that. it was just a classic left
wing. eh, sort of far left approach to these
things”.
A recent article by Miguel Mota Delgado of
the European University Institute spells out
how things have changed in the decade since
CETA was conceived.
Alongside its free-trade commitments, the
EU now relies on tools that restrict or shape
trade and investment in order to protect
critical assets. These security concerns are
driven above all by the war in Ukraine,
growing dependence on foreign technology,
and the risks posed by strategic investment
from outside the Union, particularly from
China. A good example is the EU Regulation
of 2019 that created a framework for the
screening of foreign direct investment into
the Union, transposed into Irish law last year.
Screening is the systematic review of certain
investments by non-EU entities — such as
companies from outside the Union, including
EU subsidiaries ultimately controlled abroad
— to check whether they could threaten
“security or public order”. In practice, it
allows national governments — in Ireland’s
case the Minister for Enterprise — to block,
attach conditions to, or monitor investments
in sensitive areas.
Given Ireland’s tax history – think Apple
rulings – Brussels already watches our
administrative decisions closely for signs of
regulatory leniency. That scrutiny will extend
naturally to how Ireland exercises its
screening powers, making any weakness
under CETA all the more problematic.
Here is the present risk, step by step:
Since 2019 the EU has required member
states to screen certain foreign investments
for security and public-order risks.
Ireland is implementing that regime
through ministerial decisions.
CETA grants Canadian investors special
dispute-resolution rights before an
international tribunal.
Combined, this creates a real risk that
Canadian-owned – or Canadian-fronted –
investments could in eect bypass Irish
screening, or expose the State to costly
claims if regulation later tightens.
That dynamic could encourage non-
Canadian investors to set up a paper presence
in Canada and route deals through it to gain
CETA protections, even if the investment
poses risks to Ireland’s economic security.
The incentive is strong: CETA allows investors
to bypass Irish or EU courts and sue the State
before an international tribunal if screening
decisions go against them. The mere threat
of such claims can weaken political will to use
screening powers robustly. Worse, because
ten EU member states have still not ratified
CETA, Ireland could become one of the more
exposed jurisdictions — small, open, and
attractive to treaty shopping — where foreign
investors exploit treaty rights to dodge the
Union’s screening regime. That does not only
endanger Ireland’s position but risks
creating a back door into the wider Single
Market, leaving the EU’s collective security
weaker.
The Supreme Court’s recent judgment
sharpened this danger. It confirmed that
CETA’s investor–state system is constitutional,
but also made clear that new legislation will
be needed to give tribunal awards eect in
Irish law. Once enacted, that legislation would
lock in investor rights that could collide
directly with the EU’s strategic screening
framework.
Ireland therefore needs explicit assurance
that CETA will not undercut its screening
powers. At stake are not just Ireland’s
sovereignty and control over critical
infrastructure, but the integrity of the EU’s
wider security regime.
Edmund Honohan has been the Master of
Ireland’s High Court
OPINION
