knowledge 7 January 2026 |

Investor-State Disputes on the Horizon? CETA & the Arbitration (Amendment) Bill 2025

On 1 December 2025, the Arbitration (Amendment) Bill 2025 (the “Bill”) was published.

The Bill, as it stands, will amend the Arbitration Act 2010 by inserting a new Section 25A, which will enable ratification of certain international agreements concerned with protecting investment, including the Comprehensive Economic and Trade Agreement (“CETA”) between Canada and the European Union (the “EU”) and its Member States.  While CETA entered into force provisionally on 21 September 2017, meaning that certain important mutual benefits under CETA can already be availed of by businesses, including the reduction in tariffs and access to public procurement opportunities, Ireland has yet to ratify CETA.  This is now being addressed in the Bill.

The Bill also proposes to give effect to the Advanced Framework Agreement between the EU and its Member States and the Republic of Chile, and any international agreement prescribed by order of the Minister for Foreign Affairs under section 25A(5). 

The Irish Government’s original ratification method for CETA was found unconstitutional by the Supreme Court in Costello v Government of Ireland.¹  To remedy the constitutional issues identified by the Supreme Court in Costello, the Bill sets out the circumstances in which awards made under CETA will be unenforceable in Ireland.  The Bill also provides for the enforcement of awards made pursuant to CETA.  

• Section 25A(2) provides that awards made pursuant to an international agreement to which that section applies (including CETA) will be enforceable in Ireland by leave of the High Court in the same manner as a judgment or order of the High Court and with the same effect.  Such award may only be enforced under section 25A. 
• Section 25A(3) clarifies that an award is not, and never was, enforceable in the State if enforcing the award would compromise (a) the constitutional order of the State, or (b) the autonomy of the legal order of the EU.  These grounds are based on those identified by the Supreme Court in Costello.
• Section 25A(4) confirms that there is no appeal from any determination by the High Court in relation to an application to enforce an award under section 25A(2) other than to the Supreme Court under Article 34.5.4 of the Constitution (i.e. there are exceptional circumstances warranting an appeal). 

The Bill has completed Dáil Éireann, Second Stage and is advancing along the further legislative stages required before it can be enacted.

Important Provisions of CETA

CETA aims to liberalise and facilitate trade and investment, as well as to promote a closer economic relationship between the EU and Canada.

When CETA enters into force in Ireland, it will prohibit a range of domestic measures by Ireland or Canada which affect investors from the either party. Among the prohibited measures will be:

1. Introducing measures limiting market access to the opposite party’s investors (Article 8.4(1));
2. Treating the opposite party’s investors less favourably than the party’s own investors (Article 8.6);
3. Abusive treatment of the opposite party’s investors (Article 8.10.1(e)); and
4. Expropriating investments by the opposite party’s investors, unless for a public purpose, under due process of law, in a non-discriminatory manner and with prompt, adequate and effective payment of compensation (Article 8.12(1)).

The amendment to the Arbitration Act 2010 and the ultimate ratification of CETA will not undermine Ireland’s right to regulate for legitimate policy objectives in that Article 8.9 of CETA affirms that states’ domestic regulations to achieve legitimate policy objectives, but which negatively affect an investor’s investment, will not constitute a breach of CETA.

Dispute Resolution under CETA

Disputes over the application of CETA and breaches of CETA will be adjudicated by a permanent first-instance CETA Tribunal.  A permanent Appellate Tribunal will also be established to review decisions delivered by the first-instance CETA Tribunal. 

On 27 March 2025, the European Council adopted its decision on the position to be taken on behalf of the EU within the CETA Joint Committee (composed of representatives of the parties to CETA) regarding the adoption of a decision setting out supplemental rules on expedited procedures for the resolution of investment disputes between investors and states, in particular for natural persons and small and medium-sized enterprises.

Article 1 of the proposed new rules provides that their objective is to “increase accessibility” and “reduce the costs” of resolving investment disputes in particular for individual claimants and SMEs, by (a) setting out supplemental rules for investors, in particular natural persons or small and medium sized enterprises, to request access to expedited procedures, for the resolution of investment disputes, and (b) establishing expedited procedures for the resolution of investment disputes.

The new rules have yet to be adopted by the CETA Joint Committee.

Comment

The Bill marks an interesting milestone in Ireland’s legal history by, for the first time, addressing how awards made in specified investor-state dispute procedures, whether CETA or otherwise, could be enforced.

The only international agreement ratified by Ireland up to this point that exposes Ireland to liability in an investor-state arbitration is the Energy Charter Treaty (“ECT”). Ireland has not yet been a respondent to arbitration proceedings under the ECT and has begun the formal process of withdrawing from the ECT.  There are notable differences between the dispute resolution mechanisms under each treaty which are likely to be of interest to stakeholders. Firstly, under the ECT investors can sue states on the basis of the effects of states’ domestic regulations to achieve legitimate policy objectives. This was identified as a shortcoming with the ECT but is less likely to occur under CETA due to the explicit affirmation in Article 8.9 of CETA of parties’ right to regulate within their territories to achieve legitimate policy objectives and that such regulation will not amount to a breach of CETA. Secondly, unlike under the ECT, investors will be able to bring an action under CETA even if legal proceedings have already been initiated against Ireland in the Irish Courts, provided the investor withdraws the proceedings in the Irish Courts.

Given the strong links between Canadian and Irish businesses, it is a positive development that, upon the ratification of CETA, investors will have the option of recourse to the CETA tribunal system, in addition to the robust protections offered in each nation’s respective courts.

If you need more information or advice on CETA, investor-state disputes or the Arbitration (Amendment) Bill 2025, please get in touch with your usual McCann FitzGerald LLP contact.