Appeal No. 339/2012

IpsofactoJ.com: International Cases [2012] Part 11 Case 9 [SCIre]


SUPREME COURT OF IRELAND

Coram

Thomas Pringle

- vs -

Government of Ireland

Denham CJ

Murray J

Hardiman J

Fennelly J

O’Donnell J

McKechnie J

Clarke J

19 OCTOBER 2012


Judgment

Denham CJ

  1. Thomas Pringle, the plaintiff/appellant, referred to as “the appellant”, appealed to this Court the judgment of the High Court (Laffoy J.), delivered on the 17th July, 2012, and the orders made on foot of the said judgment which were perfected on the 18th July, 2012.

  2. On the 24th July, 2012, and on the 26th July, 2012, as a matter of urgency, this Court heard submissions on three issues arising in the appeal. The three issues were:–

    1. Whether the European Stability Mechanism Treaty, done at Brussels on the 2nd February, 2012, referred to as “the ESM Treaty” involves a transfer of sovereignty to a degree that makes it incompatible with the Constitution, when one applies the principles set out by this Court in Crotty v An Taoiseach [1987] I.R. 713, such that a referendum amending the Constitution is necessary to permit the State to ratify the ESM Treaty on behalf of Ireland.

    2. Whether the Supreme Court should refer to the Court of Justice pursuant to Article 267 of the Treaty on the Functioning of the European Union, referred to as “the TFEU”, the question of the validity of European Council Decision 2011/199/EU of 25th March 2011, referred to as “the European Council Decision”, and the question of whether Ireland, by entering into and ratifying the ESM Treaty, would undertake obligations incompatible with the Union Treaties.

    3. Whether the Supreme Court should grant an interlocutory injunction, pending the final determination of these proceedings, restraining the State from ratifying the ESM Treaty.

  3. The Court considered these three issues and gave its ruling on the 31st July, 2012, and reserved its reasons for publication in judgments to be delivered at a later date.

    1. On the first issue considered as a matter of urgency, the Court was of the opinion that the ESM Treaty does not involve a transfer of sovereignty so as to make it incompatible with the Constitution, when applying the principles set out in Crotty v An Taoiseach [1987] I.R. 713, referred to as “Crotty”, such that a referendum amending the Constitution is necessary to permit the State to ratify the ESM Treaty on behalf of Ireland. The decision of the Court was to treat the ESM Treaty as one which does not involve any impermissible transfer of powers from the Executive.

    2. On the second issue, the Court made a reference seeking a preliminary ruling to the Court of Justice of the European Union on a number of questions arising on the validity of the European Council Decision and querying whether a member state of the European Union whose currency is the euro is entitled to enter into and ratify an international treaty such as the ESM Treaty; and querying if the European Council Decision is held as valid, is the entitlement of a member state to enter into and ratify an international agreement such as the ESM Treaty subject to the entry into force of that Decision. As a consequence of the reference, issues raised by this aspect of the appeal were adjourned until the Court receives the ruling of the Court of Justice.

      The Court of Justice has agreed to apply the accelerated procedure to the reference. The provisional date for the oral hearing by the Court of Justice is the 23rd October, 2012.

    3. On the third issue, the Court noted that the appeal by the appellant of the refusal of interlocutory relief by the High Court was then, because of the Court’s ruling on the first two issues, a relief sought pending the determination of the reference for preliminary ruling by the Court of Justice. Consequently, as regards the EU law issues, while the fundamental test is that stated in Campus Oil Ltd v Minister for Industry and Energy (No. 2) [1983] I.R. 88; it should be informed by decisions of the Court of Justice, including the joined cases of C–143/88 & C–92/89 Zuckerfabrik Süderdithmarschen AG v Hauptzollamt Itzehoe and Zuckerfabrik Soest GmbH v Hauptzollamt Paderborn ECR I-415 as well as C-465/93 Atlanta Fruchthandelsgesellschaft mbH v Bundesamt für Ernährung and Forstwirtschaft [1995] ECR I-3761. Applying the relevant criteria, the Court was not satisfied that it was appropriate to grant an injunction. In particular, it was considered that should the appellant be successful on the preliminary reference then that would be an adequate remedy.

    Consequently, the Court refused the application for an interlocutory injunction restraining the State from ratifying, approving or accepting the ESM Treaty, pending the final determination of the proceedings.

  4. It was stated that judgments on the matters referred to in paragraph 3(i) and (iii) above would be delivered at a later date. This is my judgment on the two issues.

    There are other issues on the appeal, but it was not considered necessary to have those issues determined urgently, and therefore, those issues, which are referred to later in this judgment in the section “High Court Judgment”, were not before the Supreme Court at this time.

  5. Constitutional Issue

  6. The first issue is whether the ESM Treaty involves a transfer of sovereignty to a degree that makes it incompatible with the Constitution, when one applies the principles set out by this Court in Crotty, such that a referendum amending the Constitution is necessary to permit the State to ratify the ESM Treaty on behalf of Ireland

  7. Background

  8. The background to these proceedings was set out by the learned High Court judge in the judgment of the 17th July, 2012. I gratefully adopt those findings.

  9. These proceedings were initiated by a plenary summons which issued on 13th April, 2012. The appellant is a citizen of Ireland, a member of Dáil Éireann, and a citizen of the European Union, hereinafter referred to as “the EU”. In essence, the appellant challenged the validity under EU law and Bunreacht na hÉireann of –

    1. a decision of the European Council proposing a Treaty amendment;

    2. a Treaty entered into by the seventeen euro-area Member States of the European Union; and

    3. the appellant also initially challenged the validity of a Treaty which, since the proceedings were commenced, in the High Court, was approved of by the People in a referendum held on 31st May, 2012.

  10. Because of the importance of the issues raised in the proceedings, the hearing of the proceedings was expedited in the High Court. It commenced on 19th June, 2012 and concluded on 29th June, 2012. While the matter was at hearing, various events occurred which were of relevance to the proceedings, for instance, the referendum referred to above, and the enactment of three Acts of the Oireachtas. The judgment of the High Court was based on the state of affairs as they existed on 9th July, 2012.

  11. The learned High Court judge identified in chronological order the acts and instruments the validity of which the appellant impugned, either as to validity or as to incompatibility with EU law, or to the Constitution, or both.

  12. Decision 2011/199/EU

  13. Article 48 of the Treaty on European Union, which is referred to as “the TEU”, deals with the manner in which the TEU and the TFEU may be amended. Article 48(1) provides that the Treaties may be amended in accordance with one of two procedures: an ordinary revision procedure, the requirements of which are outlined in Article 48(2) to (5); and a simplified revision procedure. The limited application and the procedural requirements of the simplified revision procedures are outlined in Article 48(6), which provides:–

  14. The Government of any Member State, the European Parliament or the Commission may submit to the European Council proposals for revising all or part of the provisions of Part Three of the [TFEU] relating to the internal policies and action of the EU.

    The European Council may adopt a decision amending all or part of the provisions of Part Three of the [TFEU]. The European Council shall act by unanimity after consulting the European Parliament and the Commission, and the European Central Bank in the case of institutional changes in the monetary area. That decision shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements.

    The decision referred to in the second subparagraph shall not increase the competences conferred on the Union in the Treaties.

  15. Prior to the decision referred to in the next paragraph, Article 136 of the TFEU, which provision is contained in Chapter 4 of Title VIII of Part Three, provided as follows:

  16. 1.

    In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Treaties, the Council shall, in accordance with the relevant procedure from among those referred to in Articles 121 and 126, with the exception of the procedure set out in Article 126(14), adopt measures specific to those Member States whose currency is the euro:

    (a)

    to strengthen the coordination and surveillance of their budgetary discipline;

    (b)

    to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.

    2.

    For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.

    A qualified majority of the said members shall be defined in accordance with Article 238(3)(a).

  17. The European Council by a decision of 25th March, 2011 (Decision 2011/199/EU), which was published in the Official Journal of the European Union on 6th April, 2011, adopted a decision to amend Article 136 TFEU in accordance with the simplified revision procedures provided for in Article 48(6) TEU. Decision 2011/199/EU, having recited that: –

    1. the European Council had consulted the European Parliament, the Commission and the European Central Bank on the proposal in accordance with the second subparagraph of Article 48(6) and that each of those institutions respectively adopted opinions on the proposal, and

    2. the proposed amendment concerns a provision contained in Part Three of the TFEU and it does not increase the competences conferred on the Union in the Treaties, set out the decision adopted by the European Council. Article 1 mandates the addition of a paragraph in the following terms to Article 136:–

    3. 3.

      The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.

      Article 2 makes provision for the Decision, and thereby Article 1, to have legal effect as follows in paragraph 2 of Article 2:–

      This Decision shall enter into force on 1 January 2013, provided that all notifications referred to in the first paragraph have been received, or, failing that, on the first day of the month following receipt of the last of the notifications referred to in the first paragraph.

      The notifications referred to are notifications by member states “of the completion of the procedures for the approval of this Decision in accordance with their respective constitutional requirements”.

  18. The European Communities (Amendment) Act, 2012 referred to as the Amendment Act of 2012, was enacted after the High Court hearing was concluded, but before the High Court judgment was due to be given. Section 1 of the Act amends s. 1 of the European Communities Act 1972 by substituting the following definition for the definition of “treaties governing the European Union”:

  19. ‘treaties governing the European Union’ means –

    (a)

    the [TEU],

    (b)

    the [TFEU],

    (c)

    the Lisbon Treaty, and

    (d)

    the treaties governing the European Communities, (other than the provisions to which the first paragraph of Article 275 of the treaty referred to in paragraph (b) applies), as amended by –

    ....

    (ii)

    [Decision 2011/199/EU] of 25 March 2011 amending Article 136 of the [TFEU] with regard to a stability mechanism for Member States whose currency is the euro,

    ....

    Section 2(3) provides that the Amendment Act of 2012 shall come into operation on such day or days as the Minister for Foreign Affairs and Trade may appoint by order.

  20. The initial reliefs sought in the statement of claim by the appellant based on the alleged invalidly of Decision 2011/199/EU with EU law and the Constitution were:–

    1. a declaration that the proposed amendment of Article 136 TFEU constitutes an impermissible and unlawful amendment of the TFEU by reason of such amendment fundamentally altering the constitutionally entrenched basic law and principles of the [EU] without utilising the ordinary revision procedure of the Treaties as provided in Article 48(1) to (5) TEU, which is part of Irish law;

    2. an injunction restraining the Government of Ireland from making provision by legislation or otherwise to give effect to the proposed amendment save by amendment of the Constitution by referendum pursuant to Article 46 of the Constitution.

  21. In a notice of motion returnable on 26th June, 2012, the appellant sought an order amending the general endorsement of claim on the plenary summons and the reliefs sought in the statement of claim by the addition of, inter alia, a claim for a declaration that the Amendment Act of 2012 is unconstitutional.

  22. A written summary of the appellant’s claim was put before the High Court on 27th June, 2012, in which counsel for the appellant outlined the appellant’s claims in their final form. The learned High Court judge used the written summary as the basis for identifying the elements of the appellant’s claim which the High Court had to determine. The grounds set out in the written statement on which the appellant challenged the constitutionality of the Amendment Act of 2012 and the validity of Decision 2011/199/EU were summarised as follows:

    1. As regards the Amendment Act of 2012, it is unconstitutional in that it purports to transpose into Irish law Decision 2011/199/EU, which is unlawful as it is contrary to the terms of the Union Treaties and, therefore, contrary to the terms of Article 29.4 of the Constitution.

    2. In summarising the grounds for his challenge to the constitutionality of the ESM Treaty, the appellant asserted his standing to institute the present proceedings to challenge the constitutionality of the approval of Decision 2011/199/EU and to raise questions of Union law in relation to such approval.

    3. As regards Decision 2011/199/EU vis-à-vis Union law and the Constitution:

      1. The proposed amendment of Article 136 TFEU ought to have been carried out by means of the ordinary revision procedure. The use of the simplified revision procedure constitutes a breach of Article 48 TEU.

      2. It is contrary to the Union Treaties and “to the General Principles of Union law, in particular the Principle of Legal Certainty (which is a constituent element of the Rule of Law, upon which the Union is founded pursuant to Article 2 TEU)”.

      3. Given that it is incompatible with Union law, it is also a breach of the Constitution, pursuant to Article 29.4 thereof. That is a reiteration of what is stated at (a) above.

      4. It constitutes a proposal to amend the TFEU that is subject to approval by the member states in accordance with their respective constitutional requirements. The proposed amendment contained therein, prior to its approval, falls outside the scope of the Article 29.4.6 immunity provision.

      5. Even if it is held to be valid, the provisions of the ESM Treaty extend beyond what could properly have been contemplated by the proposed amendment. That is more properly is a challenge to the ESM Treaty.

      6. It incompatibility with the EU Treaties ought to be referred to the Court of Justice of the European Union (CJEU) pursuant to Article 267 TFEU.

      7. The appellant is entitled to challenge the validity thereof in the context of a preliminary reference procedure under Article 267 TFEU. The time limits and standing requirements relating to annulment procedure under Article 263 TFEU do not apply to the Article 267 TFEU procedure. The Court is entitled to make a preliminary reference on validity to the CJEU. As will appear later, this ground is an intended response to procedural issue raised by the defendants.

  23. European Stability Mechanism Treaty

  24. On 2nd February, 2012 the seventeen member states of the European Union which are euro area member states entered into an intergovernmental agreement, the ESM Treaty, of which Article 1.1 provides:

  25. By this Treaty, the Contracting Parties establish among themselves an international financial institution, to be named the ‘European Stability Mechanism’ (‘ESM’).

  26. After these proceedings commenced, a Bill was initiated, which was enacted after the High Court hearing concluded, but before the High Court judgment was due to be given, and is now the European Stability Mechanism Act 2012, referred to as “the ESM Act of 2012”. Its purpose is set out in the long title as follows:

  27. (A)

    to make permanent provision to provide for matters relating to the participation by the State in the [ESM] pursuant to the [ESM Treaty] done at Brussels on 2 February 2012 between the euro area Member States,

    (B)

    to provide for matters relating to the State’s subscription to the authorised capital stock of the [ESM] in accordance with that Treaty,

    (C)

    to provide for payments to be made out of the Central Fund or the growing produce of that Fund so as to enable the State to give effect to that Treaty,

    (D)

    to provide for all dividends or other moneys received by the State under that Treaty to be paid into the Exchequer, and

    (E)

    to provide for other related matters.

    In implementing those purposes, the provisions which follow primarily regulate the interaction of the State with the ESM which, by s. 5, is given legal status and privileges and immunities within the State. However, s. 3 puts a limit on payments out of the Central Fund, “or the growing produce of that Fund”, of €11,145,400,000, to enable the State to make payments in respect of its contribution.

  28. The text of the ESM Treaty (including annexes) is set out in the schedule to the ESM Act of 2012.

  29. At the hearing before the High Court, the High Court was informed that the Government of Ireland proposed to ratify the ESM Treaty on 9th July, 2012. The process of ratification is governed by Article 47(1), which provides:

  30. This Treaty shall be subject to ratification, approval or acceptance by the signatories. Instruments of ratification, approval or acceptance shall be deposited with the Depositary.

    The Depositary is the General Secretariat of the Council of the European Union.

  31. The reliefs initially sought in the statement of claim by the appellant based on his allegation of the incompatibility of the ESM Treaty with the Constitution and the EU Treaties were:–

  32. (a)

    a declaration that it violates the constitutionally entrenched principles of the TFEU and that any purported ratification thereof is (or perhaps more correctly, would be) invalid, void and of no effect or, in the alternative, a declaration that any process of ratification thereof requires the approval of the people in a referendum pursuant to Article 46 of the Constitution;

    (b)

    a declaration that its terms and provisions, if ratified and made part of Irish law, would violate the provisions of the Constitution; and

    (c)

    if necessary, an injunction restraining the ratification by the first defendant, the Government of Ireland, and the State of the ESM Treaty, absent approval by the people in a referendum pursuant to Article 46 of the Constitution.

    In the notice of motion returnable before the High Court on 26th June, 2012, the appellant sought an amendment of the plenary summons and the prayer in the statement of claim to seek a declaration that the ESM Act of 2012 is unconstitutional.

  33. In outlining in the written summary the grounds on which the appellant asserted the incompatibility of the ESM Treaty with EU law and the Constitution and the unconstitutionality of the ESM Act of 2012, the appellant categorised his submissions under the following headings:

  34. (a)

    the ESM Treaty and the Constitution;

    (b)

    the ESM Act of 2012 and the Constitution; and

    (c)

    the ESM Treaty and Union law.

  35. The grounds on which the appellant contended in the High Court that the validity of the ESM Treaty is incompatible with the Constitution were summarised as follows:

    1. Given the nature and extent of Ireland’s financial obligations under the ESM Treaty, the open-ended and imprecise powers and functions conferred on the ESM institution, and its degree of autonomy, the proposed Treaty constitutes a degree of delegation of sovereignty that is incompatible with the Constitution and is required to be the subject of a referendum. The ESM Treaty is incompatible with Articles 5, 6, 15.2.1, 15.4, 17, 28.2 and 28.4 of the Constitution.

    2. Given the scale and extent of Ireland’s financial obligations under the ESM Treaty, and the permanent nature of that Treaty combined with the absence of any mechanism for withdrawal, the ESM Treaty entails the transfer by the Oireachtas of an impermissible degree of monetary and budgetary power to the executive branch of the State and, in particular, to the Minister of Finance. Such a transfer would be contrary to Articles 5, 6 and 17 of the Constitution.

    3. The ESM Treaty is incompatible with EU law and, consequently, constitutes a breach of Article 29.4 of the Constitution, given the status of EU law in the national legal order as provided for in the European Communities Acts 1972 to 2009 (and affirmed in the judgment of the Supreme Court in Crotty v An Taoiseach [1987] I.R. 713).

    4. The ESM Treaty is in fundamental contradiction to the Union Treaties, and, in particular, to “the provisions of Economic and Monetary Union, inserted by the Treaty on European Union, 1992” which was put to and approved by the people of Ireland in a referendum. The appellant contends that any fundamental alteration of the substance of that vote and referendum equally requires the approval of the people.

    5. The determination of the constitutional law issues raised at (b) and (c) above entail a prior interpretation of the EU Treaties and of EU law more generally. The issues of Union law arising ought first to be referred to the CJEU, before this Court is in a position to consider the constitutionality of the ESM Treaty.

    6. The appellant has standing to institute the present proceedings concerning the constitutionality of the ESM Treaty and Decision 2011/199/EU and to raise questions of EU law arising in relation to the evaluation of constitutionality, the ratification of the ESM Treaty and the approval of Decision 2011/199/EU.

  36. The grounds for the challenge to the validity of the ESM Act of 2012 having regard to the provisions of the Constitution were also summarised in the High Court. While that issue is not before this Court at this time, I have included the grounds as background information, and it is as follows:–

  37. (a)

    Section 2 of the ESM Act of 2012 is incompatible with the Constitution, in that it confers an impermissible degree of monetary and budgetary power on the Minister for Finance contrary to Articles 5, 6 and 17 of the Constitution, insofar as it provides for a permanent and unfettered power in the Minister for Finance (in the absence of any control, supervision or veto over the decisions of the Minister by Dáil Éireann) to commit the State to make payments in respect of the contribution of the State and to the authorised capital stock of the ESM, where such commitment or payments –

    (i)

    may extend beyond what is contemplated in s. 3 of the ESM Act of 2012, to include payments provided for in Articles 8(2), 10(1), 25(1) and 25(2) of the ESM Treaty, and

    (ii)

    relate to sums of the order contemplated in the extent of authorised shares in Annex II.

    Further, this takes place in the context of the ESM Treaty which constitutes an unlawful instrument in EU law and under the Constitution.

    (b)

    The ESM Act of 2012 is unlawful in that it seeks to ratify a treaty that is in breach of the Constitution and of the EU Treaties on the basis of the grounds set out at (a) to (e) in para. 16 above.

  38. In summarising the grounds of the alleged incompatibility of the ESM Treaty with EU law, the appellant advanced in the High Court the following arguments:

    1. It is incompatible with the EU Treaties.

    2. The fact that the European Council considered that the creation of the ESM “required” a treaty change, underscores the European Council’s view that there is an incompatibility between it and the existing provisions of the EU Treaties. This was understood by the learned High Court judge to be a reference to Recital (2) in Decision 2011/199/EU, wherein it is stated as follows:

      At the meeting of the European Council of 28 and 29 October 2010, the Heads of State or Government agreed on the need for Member States to establish a permanent crisis mechanism to safeguard the financial stability of the euro area as a whole and invited the President of the European Council to undertake consultations with the members of the European Council on a limited treaty change required to that effect.

    3. It is incompatible with the EU Treaties and, in particular, with the provisions of Part Three, Title VIII, TFEU, and, in particular, Articles 122, 123, 125 and 126 TFEU, including the object and spirit underlying such provisions as a whole. Without prejudice to the validity of the amendment proposed to be introduced by Decision 2011/199/EU, such amendment does not in any event form part of the relevant EU legal framework, given that it is only envisaged to enter into force, at the earliest, on 1st January, 2013.

    4. It entails a conferral of competences that alters and violates the competences conferred on the EU in the field of economic and monetary policy and breaches the rules governing the allocation of competences set out in Articles 2(1) and (2) TFEU and elaborated on in the case law of the CJEU.

    5. It entails the participation of the institutions of the Union (European Commission, European Central Bank, Court of Justice), conferring new competences on such institutions and requiring them to carry out tasks that are incompatible with their functions as defined in the EU treaties.

    6. It is incompatible with the respect for effective judicial protection enshrined in the Charter of fundamental rights of the European Union and the European Convention on Human Rights and recognised as “a General Principle” of EU law.

    7. The combined and cumulative effect of the breaches of EU law that it entails (as particularised at (c) to (f) above), would constitute a fundamental alteration of the EU treaties, and, in particular, of the provisions of Economic and Monetary Union as agreed by the member states in the Treaty on European Union signed in Maastricht in 1992. As such, it would constitute an unlawful interference with and subversion of the EU framework and the EU legal order.

    8. Article 4(3) TEU and the principle of sincere co-operation, prohibits member states from entering into international agreements that are incompatible with the EU treaties. Ireland is prohibited from acceding to the ESM Treaty under EU law.

    9. The question as to whether EU law permits Ireland to accede to the ESM Treaty is a matter of EU law and ought to be the subject of a reference made to the Court of Justice of the European Union pursuant to Article 267 TFEU.

  39. Fiscal Stability Treaty

  40. The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, referred to as “the Fiscal Stability Treaty” was signed in Brussels on 2nd March, 2012 by twenty five member states of the EU, including Ireland and all other countries whose currency is the euro. Article 14(2) of the Fiscal Stability Treaty provides that it shall enter into force on 1 January, 2013, provided that twelve contracting parties whose currency is the euro have deposited their instruments of ratification, or on the first day of the month following the deposit of the twelfth instrument of ratification by a contracting party whose currency is the euro, whichever is the earlier.

  41. The people of Ireland approved of the ratification by the State of the Fiscal Stability Treaty in a referendum held on 31st May, 2012. The Thirtieth Amendment of the Constitution (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) Act 2012, referred to as “the Thirtieth Amendment of the Constitution Act”, was enacted on 27th June, 2012. Section 1 provides that Article 29 of the Constitution is amended by the insertion after subsection 9° of section 4 of the following provision:

  42. 10°

    The State may ratify the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union done at Brussels on the 2nd day of March 2012. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty or prevents laws enacted, acts done or measures adopted by bodies competent under that Treaty from having the force of law in the State.

  43. In the prayer for relief in the statement of claim (at paragraph 6) the appellant initially sought a declaration that the Fiscal Stability Treaty and, in particular, Article 10 thereof, violates the constitutionally entrenched principles of the TFEU, by reason of the meaning and effect of the said Article 10 and its intended use being dependent on the validity and effect of the ESM Treaty and the proposed amendment of Article 136 TFEU. As was pointed out by counsel for the State in their written submissions in the High Court, the claim for that relief was not substantiated by any claims made in the statement of claim. It was based on the assertion that the Fiscal Stability Treaty is “dependent” on the validity of the ESM Treaty and of the proposed amendment to Article 136. It was not supported by any arguments in the appellant’s written or oral submissions.

  44. The High Court was informed on 28th June, 2012 by counsel for the appellant that the appellant was not pursuing the relief claimed in paragraph 6 of the prayer in the statement of claim (Transcript, Day 6, page 86).

  45. Nonetheless, the Fiscal Stability Treaty was drawn into the arguments in the High Court in support of the appellant’s case; the appellant contended that the considerations which led the State to conclude that a referendum was necessary in relation to its ratification, apply a fortiori with respect to the ESM Treaty, and he submitted that the ESM Treaty also falls outside the EU legal framework and affects the sovereignty of the State, and therefore, that the State had adopted an inconsistent approach to the two treaties. The State’s response was that no inconsistency existed. Further, it was submitted that while the treaties are complementary, as Recital (5) in the preamble to the ESM Treaty recognises, the scope, objectives and provisions of the ESM Treaty do not involve any transfer of sovereign powers. The provisions of the Fiscal Stability Treaty were not explored. In the circumstances, the High Court did not express any view on those submissions.

  46. Reference to the Court of Justice by the High Court

  47. In the written summary of the appellant’s claim put before the High Court on 27th June, 2012, the appellant formally requested that the High Court make a reference to the Court of Justice pursuant to Article 267 TFEU, for a preliminary ruling and the basis on which the reference was sought was summarised as follows:

    1. The appellant challenged the compatibility of the ESM Treaty both with the Constitution and with EU law.

    2. The determination of certain of the constitutional aspects of the case is dependent on the interpretation of the EU Treaties and “General Principles of Union law”, as developed in the case law of the CJEU.

    3. Questions of law ought to be referred to the CJEU for preliminary ruling pursuant to Article 267 TFEU.

    The High Court has indicated that it will be referring a question to the Court of Justice. The question was not identified to this Court.

  48. Interlocutory Injunctive Relief

  49. In the notice of motion returnable for 26th June, 2012, before the High Court, the appellant sought the following interlocutory injunctive relief, pending the final determination of these proceedings:

  50. (a)

    an order restraining the State from ratifying, approving or accepting the ESM Treaty; and

    (b)

    an order restraining the State from completing the procedures for the approval of Decision 2011/199/EU.

    The application for interlocutory relief was grounded on the affidavit of the appellant sworn on 26th June, 2012 and the exhibits referred to therein. The factual response to the application for interlocutory relief was an affidavit sworn on 27th June, 2012 by Jim O’Brien, a second secretary general of the Department of Finance with responsibility for the EU and International Affairs Division of the Department, and the exhibits referred to therein.

    High Court Judgment

  51. .i The High Court judgment noted that there were three limbs to the appellant’s constitutional argument before that Court. (i) The first limb was that the ESM Treaty constituted such a degree of delegation of sovereignty that it is incompatible with the Constitution, and that as a consequence a referendum to amend the Constitution is necessary pursuant to Article 43 of the Constitution to permit ratification of, and Ireland’s participation in, the ESM Treaty. This argument is based on the Crotty case. (ii) The second limb was that the ESM Treaty, or more properly its implementation, entails a transfer from the Oireachtas of an impermissible degree of monetary and budgetary power to the executive, and in particular to the Minister for Finance, contrary to the Constitution. This ground was not pleaded. However, the High Court considered it. As the ESM Act of 2012 has been enacted this limb arises in the context of the appellant’s challenge to the constitutionality of that Act. (iii) The third limb, which also was not pleaded, but which was addressed in the High Court, and considered by the learned High Court judge, was that the ESM Treaty is incompatible with EU law and that it is in fundamental contradiction to the EU Treaties, and, consequently, that the Constitution is breached and that the approval of the people in a referendum is necessary to give effect to the necessary amendment to the Constitution.

  52. The first limb of the appellant’s constitutional argument is addressed on this appeal, and is determined. The other two limbs were not before the Court at this time.

  53. The nub of the appellant’s case before the High Court on the Crotty issue was that participation in the ESM Treaty involved a transfer of sovereignty to the ESM, because such participation impinged on and diminished Ireland’s budgetary, economic and fiscal sovereignty, in that it entailed an open-ended and irreversible transfer of powers to an autonomous institution that exposed Ireland to a permanent commitment to provide funding and assume liability, without limit, for the debts of other members, on the basis of decisions that may be made regardless of, and in opposition to, Ireland’s views, in circumstances where there is no option or procedure for withdrawal from the mechanism.

  54. The learned High Court judge held that, unlike participation in the Treaty at issue in the Crotty case, i.e. Title III of the Single European Act, participation in the ESM Treaty would not involve any transfer or diminution of sovereignty by Ireland to the ESM or other Members of the ESM, and thus the ESM is not incompatible with the Constitution.

  55. On the claim made by the appellant for an interlocutory injunction restraining the Government from ratifying the ESM Treaty pending the determination of the proceedings, the High Court concluded that such an order should not be made.

  56. The appellants filed a notice of appeal to this Court.

  57. Issue papers

  58. The Court requested the parties to furnish an agreed issue paper. This was not possible.

    1. On behalf of the appellants the issues identified for determination were:–

      1. The ESM Treaty amounts to a binding agreement with other States according to which the State abdicates its freedom to decide matters of policy covered by the Treaty, and its freedom to act as it sees fit in so far as such policy is concerned, by obliging the State to exercise its powers in a particular way, or to refrain from exercising those powers, such that the Treaty limits the full freedom of action conferred by the people upon the Institutions of Government under the Constitution.

      2. The ESM Treaty imposes an initial obligation and liability on the State to divert €11,145,400,000 of its budgetary resources to bail out other ESM Member States and/or their banks, by the use of that contribution in a total fund of €700,000,000,000 together with potential borrowings by the ESM Institution of £3,900,000,000,000.

      3. By entering into this Treaty commitment, the State would irrevocably abandon the terms on which it committed to economic and monetary union within the EU, including the terms upon which it adopted the single currency, the euro, which terms are a core component of economic and monetary union, and would instead commit to the long term preservation of the euro on terms that are wholly inconsistent with those terms of EMU to which Ireland committed in 1992.

      4. The issues raised in point 3 above entail questions of interpretation of EU law.

      5. The stated complementarity of the ESM Treaty with the Fiscal Stability Treaty is legally significant. Given that the Fiscal Stability Treaty, obliging the State to determine its budget in a particular way as stated in Article 1, required the prior approval of the people by way of referendum, it follows that this complementary treaty which permanently commits the State to finance and guarantee the bailing-out of other member states and/or their banks, where this is indispensable to safeguard the euro area as a whole, also requires the prior approval of the people by referendum.

      6. The provisions of the ESM Treaty irrevocably trench on the capacity of Dáil Éireann to decide matters of public expenditure, and the settling of the national budget deficit or surplus. On the basis of present arrangements, potentially the State is liable to pay in capital in the order of an additional €9,871,164,000.

      7. The object and scope of the ESM Treaty extend beyond the establishment of a fund intended to provide financial assistance to states which are experiencing, or are threatened by, severe financing problems. The ESM Treaty requires the State's contribution to the ESM to be applied immediately to borrowing, to providing financial assistance to other Member States and / or their banks and as a guarantee, where this is necessary to safeguard the euro area as a whole.

      8. The ESM Treaty, including the operating processes of the ESM Institution, limits and fetters the State's freedom of action in adopting policy or altering or reversing existing policies enshrined in the ESM Treaty, in the following respects:

        1. by virtue of rules governing qualified majority voting in respect of certain decisions, including the decision to provide financial assistance in circumstances deemed as an emergency pursuant to Article 4(4) of the ESM Treaty. Critical decisions may be taken regardless of and in opposition to Ireland's views.

        2. by the absence of any provision regarding its termination and the absence of any provision for denunciation or withdrawal. The ESM Treaty is therefore not subject to denunciation or withdrawal within the meaning of Article 56 of the Vienna Convention on the Law of Treaties (1969). The Treaty is intended to be permanent.

        3. by virtue of the imprecise, undefined and open-ended provisions of the ESM Treaty so that its operational and structural parameters are unforeseeable (for example, what constitutes ‘special circumstances’ within the meaning of Article 8(2) of the ESM Treaty, or what circumstances constitute an ‘emergency’ within the meaning of Article 4(4) of the ESM Treaty that would not also be covered by the principles set out in Article 12 of the Treaty).

        4. by virtue of the unaccountability and the questionable and limited possibility of judicial and/or parliamentary scrutiny of the decisions of the ESM Institution.

        5. by virtue of the generally recognised principles of public international law that would determine the interpretation, application and effect of the ESM Treaty, including the doctrine of pacta sunt servanda and the principle that a State entering into a treaty must act in good faith (as referred to in the judgment in the case of Crotty v An Taoiseach) that further serves to restrict the discretion of the organs of the State with respect to national procedures required to give effect to decisions of the ESM Institution, such as, for example, is contemplated in Article 10(1) of the ESM Treaty.

      9. A Treaty that irrevocably commits the State to divert its budgetary resources to finance and guarantee potentially unlimited borrowing in order to bail out Member States and/or their banks for the purposes of safeguarding the euro currency is a Treaty that restricts the capacity of the organs of State to determine policy in the future and requires the mandate of the people by referendum.

      10. The ESM Treaty and the European Stability Mechanism Act 2012 are incompatible with Articles 5, 6, 15.2.1, 15.4, 17, 28.2, 28.4 and 29.4 of the Constitution.

    2. The State submitted that the issue for consideration at this time by the Court was:–

  59. Having regard to the various arguments advanced by the appellant, does the ESM Treaty involve a transfer of sovereignty to a degree that makes it incompatible with the Constitution when one applies the principles set out by this Court in Crotty v An Taoiseach I.R 713, such that a referendum amending the Constitution is necessary to permit the State to ratify the ESM Treaty on behalf of Ireland? In particular, would ratification, absent such a referendum be incompatible with Articles 5, 6, 15.2.1, 15.4, 17, 28.2, 28.4 and 29.4 of the Constitution.

  60. Submissions

    Submissions of Appellant

  61. The appellant filed written legal submissions to the Court, and a written summary of the appellant’s claim, which I have considered carefully. Inter alia, it was submitted that the determination of constitutional issues entail a prior interpretation of the EU treaties and EU law more generally. It was submitted that the issues of EU law arising ought first to be referred to the Court of Justice, before this Court considered the constitutionality of the ESM Treaty.

  62. In oral submissions, counsel for the appellant stressed several points concerning the ESM Treaty. It was submitted that the ESM Treaty was making a permanent provision for the ESM and its policy. The fixed policy is the saving and stability of the common euro currency. Counsel argued, with reliance on the Recitals to the ESM Treaty, that the complementariness or connectedness and dependence of the ESM Treaty on the Fiscal Stability Treaty indicated the true nature of the mechanism that has been established. A binding policy on the states had been formulated and agreed which was not merely a funding mechanism nor a bank but rather, per Article 3 of the ESM Treaty, was the expression of the collective decision of the 17 states to pool resources so as to mobilise funding with the purpose of giving financial assistance, i.e. stability support, where a member state has severe financial problems, but with a governing clause regarding the safeguarding of the financial stability of the euro zone as a whole and of its member states. In concise terms, the purpose and policy of the ESM Treaty was to provide support to states if necessary to protect the euro area as a whole.

  63. Counsel submitted that the Oireachtas cannot commit the sum of more than €11 billion in pursuit of this policy because of the Constitution and, in particular, the application of Crotty. Counsel argued that in addition to the policy being fixed, the State’s commitment was irreversible and its capacity to say “no” was restricted. Counsel particularly focused on provisions where decisions could be taken and expenditure made without the consent of the State, such as when unanimous decision making was not required. The Court was referred to Article 4(8) of the ESM Treaty which provides that if the State fails to meet any part of its payments due, then the State will be unable to exercise its voting rights for so long as the payment is due. Counsel argued that this provision would cause the State to lose its sovereignty in the decision making of the ESM and this loss could be at a moment of the State’s greatest peril, when the State would need its voice more than ever, in a situation where the State could not make the payment required. The Court was also referred to the emergency voting procedure outlined in Article 4(4) where only 85% of the votes cast are necessary to decide to grant or implement financial assistance to a state. A consequence of these provisions is that the other states may decide to grant financial support to a state that the State does not support.

  64. Counsel also referred the Court to the decisions that could be taken by a qualified majority, which could be decisions of substantive content. Reference was also made to Article 8, which provides that the full amount of the State’s capital subscription is liable to be called in, and that the State irrevocably and unconditionally agrees to provide its contribution if called in, and to provide such amount in a timely basis. Counsel also made submissions as to Article 37 and argued that it cannot have the effect of giving jurisdiction to the Court of Justice of the European Union. He argued that the ESM is not a member state of the EU and cannot go to the Court of Justice under Article 273 of the TFEU.

  65. In conclusion, counsel submitted that the totality of the provisions of the ESM Treaty constituted a trenching on the sovereignty of the State.

  66. Counsel made submissions on Crotty v An Taoiseach [1987] I.R. 713 especially referring to and adopting the judgments of Walsh J. and Henchy J., and argued that they applied to this case. Counsel submitted that in this case the Government decided it would commit itself into the future and that that is what Crotty said the Government could not do; it could not restrain its discretion into the future; the policy of the Government must be capable of being changed. Counsel submitted that the ESM Treaty circumscribes the policy of the Government.

  67. Inter alia, counsel also stressed that the precise nature of the borrowing power is ill defined. Counsel submitted that the ESM is a transfer of sovereignty to an independent institution acting corporately, which may make decisions, that the State may not have participated in, and that these decisions may involve commitment of the State’s money to the rescue of other states, and significant borrowing to that end. Counsel stressed that the principle in Article 5 of the Constitution, i.e. that “sovereign” is an imperative word, that insofar as this procedure involves a departure by the State to act as a sovereign, the State has lost its sovereignty. Counsel stated that he adopted the Crotty principles, that a government could not render itself hamstrung to pursue the common good, as to do so requires a mandate from the people.

  68. Submissions of State

  69. The State filed written submissions to the Court. It was stated that the most urgent claims that this Court had to decide at this juncture are constitutional claims.

  70. It was submitted by the State that there were three constitutional law based issues:–

    1. The first limb being that the ESM Treaty constituted such a degree of delegation of sovereignty that it is incompatible with the Constitution and that a referendum was necessary to permit its ratification by Ireland. This is the Crotty limb, based primarily on the majority judgments of the Supreme Court in that case.

    2. The second limb was that the ESM, or more properly its implementation, entails transfer from the Oireachtas of an impermissible degree of monetary and budgetary power to the Executive, in particular to the Minister for Finance. The High Court recognised that this ground was not pleaded. The State relied on this fact. Further, no permission to amend the statement of claim was sought by the appellant in his notice of motion of the 26th June, 2012, which the High Court dealt with on the 27th June, 2012. It was submitted by the State that in the circumstances it was unnecessary to consider this limb of the constitutional argument. In all the circumstances, this issue does not arise for decision at this time.

    3. The third limb was the contention that because the ESM Treaty breaches EU law, it would also comprise a discrete breach of Article 29.4.4 of the Constitution. The learned High Court judge acknowledged that this limb was also not pleaded. The High Court did not address its admissibility nor the claim itself, given the conclusion it arrived at as to the compatibility of the ESM Treaty with EU law. It was a claim that the High Court considered it did not have to address. Consequently, this third issue does not arise for determination at this time.

  71. Therefore, this judgment addresses the first limb, the first constitutional issue, only.

  72. On the first limb, the Crotty issue, the State distinguished aspects of the SEA in issue in the Crotty case and the ESM Treaty at issue in this case. It was submitted that there is nothing in the ESM Treaty such that its ratification would breach the principles established in Crotty. Specifically that there was nothing in the ESM Treaty such that its ratification by the State would:–

    1. constitute or result in a transformation, let alone a fundamental transformation, in the relations between Ireland and its fellow euro area member states, or between Ireland and other EU member states more generally;

    2. undermine the essential nature of Ireland’s residual sovereignty in relation to the exercise of foreign policy powers, i.e. those which have not in the meantime been limited by virtue in particular of what is now Title V of the TEU and the Union’s external action powers. It was submitted that the ESM Treaty has nothing to do with foreign policy and therefore that it has nothing to do with exercising the right to say yes or to say no in respect of foreign policy;

    3. fetter in any way executive or legislative powers that remain bestowed unfettered by the Constitution on the organs of government of the State.

  73. The State submitted that the analysis of the majority judgments in Crotty by the learned High Court judge was correct.

  74. The State endorsed the conclusions of the learned High Court judge on the basic features of the ESM Treaty as set out in the High Court judgment, and which are referred to above. The State submitted that of particular note in the conclusion of the judgment of the High Court was that any increase in the State’s “call-able up” capital contribution to ESM cannot come about without the consent of the State and that it would involve the consent of the Minister for Finance, acting on behalf of the Government as Ireland’s representative on the Board of Governors of the ESM, and the approval of Dáil Éireann, as well in effect as the approval of the Oireachtas through the requirement to amend the ESM Act of 2012. Counsel for the State also drew attention to the finding of the High Court that there would be no compulsion on Ireland to accept financial assistance that may be on offer if the terms, by way of conditionality imposed, were not acceptable to the Government of the day. Further, that the instances where Ireland would not have a veto on a decision of substance, namely under Article 4(4), are strictly limited to an emergency procedure necessary to address financial crises and could not “on any common sense basis be regarded as a diminution of sovereignty”.

  75. The Constitution

  76. The Articles of the Constitution of Ireland relevant to this appeal commence with Article 5 which provides:–

  77. Ireland is a sovereign, independent, democratic State.

    Article 6 states:–

    1.

    All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the Rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.

    2.

    These powers of government are exercisable only by or on the authority of the organs of State established by this Constitution.

    Article 28.2 states:–

    The executive power of the State, shall, subject to the provisions of this Constitution, be exercised by or on the authority of the Government.

    Article 29.4.1° states:–

    The executive power of the State in or in connection with its external relations shall in accordance with Article 28 be exercised by or on the authority of the Government.

    Article 29.4.2° states:–

    For the purpose of the exercise of any executive function of the State in or in connection with its external relations, the Government may to such extent and subject to such conditions, if any, as may be determined by law, avail of or adopt any organ, instrument, or method of procedure used or adopted for the like purpose by the members of any group or league of nations with which the State is or becomes associated for the purpose of international co-operation in matters of common concern.

    Article 29.5.1°, which deals with international agreements, other than agreements and conventions of a technical or administrative character, requires that every international agreement to which the State becomes a party shall be laid before Dáil Éireann. Article 29.5.2° provides:

    The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann.

  78. Thus, Ireland is a sovereign, independent, democratic State. The powers of government are exercisable only by the organs of State established by the Constitution. The executive power of the State is exercised by the Government.

  79. The Decision

    The Crotty Decision

  80. Limitations on the exercise of the executive power were addressed in Crotty v An Taoiseach [1987] I.R. 713, where this Court, by a majority, held that the Government had acted beyond its powers.

  81. At the core of this appeal are the principles stated in Crotty. Both the appellant and the State relied on the majority judgments in that case, which both parties asked the Court to apply.

  82. At issue in Crotty were treaties made in Luxembourg on the 17th February, 1986, and at the Hague on the 28th February, 1986, collectively called the Single European Act, referred to as “the SEA”, by which the twelve member states resolved to amend the treaties of the European Communities. Article 33 of the SEA provided:–

  83. This Act will be ratified by the High Contracting Parties in accordance with their respective constitutional requirements. The instruments of ratification will be deposited with the Government of the Italian Republic.

    This Act will enter into force on the first day of the month following that in which the instrument of ratification is deposited of the last signatory State to fulfil that formality.

  84. Title III of the SEA embodied a separate treaty, whereby each of the High Contracting Parties agreed to adapt its foreign policy positions to those of the others and refrain from impeding a consensus and joint action within a structured framework, known as European Political Cooperation. Title II included structural changes to the treaties of and governing the European Communities and, in the case of the European Economic Community, referred to as “the EEC”, provided for increased use of voting by qualified majority in the European Council, the enumeration of objectives of the EEC, and a new court of first instance, inferior to the Court of Justice. Most of the provisions of the SEA, with the excepting of Title III, were inserted into the European Communities Act, 1972, by the European Communities (Amendment) Act, 1986, referred to as “the Act of 1986”, and became part of the domestic law of the State on the 24th December, 1986. Section 3(3) of the Act of 1986 provided that the Act should come into operation on such date as the Minister for Foreign Affairs would appoint.

  85. Mr. Crotty issued a plenary summons on the 22nd December, 1986, seeking declarations that any purported ratification of the SEA would be void having regard to the provisions of the Constitution, and he sought injunctions restraining ratification. He also sought a declaration that the European Communities (Amendment) Bill, 1986, would, if enacted, be repugnant to the Constitution and null and void in purporting to enact certain parts of the SEA into domestic law.

  86. On the application for injunctions, the High Court (Barrington J.) granted interlocutory injunctions.

  87. On the matter being heard by a Divisional Court of the High Court (Hamilton P., Barrington and Carroll J.J.) the reliefs sought were refused and the injunctions were discharged.

  88. Mr. Crotty appealed to this Court, and obtained similar interim and interlocutory injunctions, pending the hearing of the appeal.

  89. This Court held that the plaintiff had locus standi to challenge the Act in the circumstances where its coming into force would affect every citizen. This Court considered that Article 29.4.3° should be interpreted as giving authorisation to the State not only to join the European Communities as they stood in 1973, but also to join in amendments of the treaties so long as such amendments do not alter the essential scope or objectives of the European Communities. Following consideration of the essential nature of the scope and objectives of the European Communities and the amendments that the Act of 1986 made to incorporate the SEA, the Court held that the European Community was a developing organism with diverse and changing methods for making decisions and an inbuilt and clearly expressed objective of expansion and progress including the terms of the mechanics to be used in the achievement of its agreed objectives, and that the amendments were permissible and thereby the Act of 1986 was valid according to the Constitution.

  90. On the issue of Title III, by which Treaty Ireland agreed to adopt its foreign policy positions within the framework of European Political Cooperation, it was held by a majority of the Supreme Court (Walsh J., Henchy J. and Hederman J.) that the appeal be allowed, and a declaration was made that the ratification of Title III was unconstitutional.

  91. It was held by all the members of the Court that the Constitution vested in the Government the executive power of the State in its external relations, subject to the provisions of the Constitution.

  92. As both parties in this appeal relied on the majority judgments in Crotty, it is necessary to analyse that decision carefully.

  93. The judgments of Walsh J., Henchy J. and Hederman J. hold the essence of the decision.

  94. The core issue in Crotty, and in this case, is whether the State in attempting to ratify the Treaty before the Court is endeavouring to act free from the restraints of the Constitution.

  95. The position was described by Walsh J. at p. 777 to 778 as:–

  96. The Constitution confers upon the Government the whole executive power of the State, subject to certain qualifications which I will deal with later, and the Government is bound to take care that the laws of the State are faithfully executed. In its external relations it has the power to make treaties, to maintain diplomatic relations with other sovereign States. The Government alone has the power to speak or to listen as a representative of the State in its external relations. It is the Government alone which negotiates and makes treaties and it is the sole organ of the State in the field of international affairs. For these functions it does not require as a basis for their exercise an Act of the Oireachtas. Nevertheless the powers must be exercised in subordination to the applicable provisions of the Constitution. It is not within the competence of the Government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered so to do by the Constitution. They are both creatures of the Constitution and are not empowered to act free from the restraints of the Constitution. To the judicial organ of government alone is given the power conclusively to decide if there has been a breach of constitutional restraints.

    The powers of external sovereignty on the part of the State do not depend on the affirmative grant of this in the Constitution. They are implicit in the provisions of Article 5 of the Constitution. The State would not be completely sovereign if it did not have in common with other members of the family of nations the right and power in the field of international relations equal to the right and power of other states. These powers of the State include the power to declare war or to participate in a war, to conclude peace, to make treaties, and maintain diplomatic relations with other states.

  97. At issue in the Crotty case was, and in this case is, whether the Government was acting within its executive power, under the Constitution. Walsh J. set out in detail the nature of the SEA, pointing out that the essential nature of sovereignty is the right to say yes or say no, but that that right would be materially qualified by the SEA which committed the State, and therefore all future Governments and the Oireachtas, to the other member states to do the following things;-

  98. 1.

    To endeavour to formulate and to implement a European foreign policy.

    2.

    To undertake to inform or consult the other Member States on any foreign policy matters of general interest (not just of common interest) so as to ensure that the combined influence of the States is exercised as effectively as possible through co-ordination, the convergence of their positions and the implementation of joint action.

    3.

    In adopting its position and in its national measures the State shall take full account of the position of the other Member States and shall give due consideration to the desirability of adopting and implementing common European positions.

    4.

    The State will ensure that with its fellow Member States common principles and objectives are gradually developed and defined.

    5.

    The State shall endeavour to avoid any action or position which impairs the effectiveness of the Community States as a cohesive force in international relations or within international organisations.

    6.

    The State shall so far as possible refrain from impeding the formation .of a consensus and the joint action which this could produce.

    7.

    The State shall be ready to co-ordinate its position with the position of the other Member States more closely on the political and economic aspects of security.

    8.

    The State shall maintain the technological and industrial conditions necessary for security of the Member States and it shall work to that end at national level and, where appropriate, within the framework of the competent institutions and bodies.

    9.

    In international institutions and at international conferences which the State attends it shall endeavour to adopt a common position with the other Member States on subjects covered by Title III.

    10.

    In international institutions and at international conferences in which not all of the Member States participate the State, if it is one of those participating, shall take full account of the positions agreed in European Political Cooperation.

    One other matter expressed in somewhat ambiguous terms at Article 6 (c) in Title II is as follows:

    Nothing in this Title shall impede closer cooperation in the field of security between certain of the High Contracting Parties within the framework of the Western European Union or the Atlantic Alliance.

  99. Walsh J. held that:–

  100. In my view it would be quite incompatible with the freedom of action conferred on the Government by the Constitution for the Government to qualify that freedom or to inhibit it in any manner by formal agreement with other States to qualify it.

  101. Walsh J. described the boundary on the Government to determine matters of foreign policy. He stated at p. 783 to 784:–

  102. In enacting the Constitution the people conferred full freedom of action upon the Government to decide matters of foreign policy and to act as it thinks fit on any particular issue so far as policy is concerned and as, in the opinion of the Government, the occasion requires. In my view, this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures, and so to bind the State in its freedom of action in its foreign policy. The freedom to formulate foreign policy is just as much a mark of sovereignty as the freedom to form economic policy and the freedom to legislate. The latter two have now been curtailed by the consent of the people to the amendment of the Constitution which is contained in Article 29, s. 4, sub-s. 3 of the Constitution. If it is now desired to qualify. curtail or inhibit the existing sovereign power to formulate and to pursue such foreign policies as from time to time to the Government may seem proper, it is not within the power of the Government to do so.

    The foreign policy organ of the State cannot, within the terms of the Constitution, agree to impose upon itself, the State or upon the people the contemplated restrictions upon freedom of action. To acquire the power to do so would, in my opinion, require a recourse to the people ‘whose right it is’ in the words of Article 6 ‘ .... in final appeal, to decide all questions of national policy, according to the requirements of the common good.’ In the last analysis it is the people themselves who are the guardians of the Constitution. In my view, the assent of the people is a necessary prerequisite to the ratification of so much of the Single European Act as consists of title III thereof. On these grounds I would allow this appeal.

  103. Henchy J. analysed the SEA, and held that the essence of the treaty was a “fundamental transformation” in the relations between the member states of the European Communities – that they would no longer have separate foreign policies, but, as far as possible, merge their natural foreign policies in a European foreign policy, so as to implement European Political Cooperation, with a view to achieving European Union. Henchy J. held that the Government could not cede sovereignty to such an institution. He stated at p. 786:–

  104. Those and other commitments expressed in Article 30 make manifest that, although the approach to the ultimate aim of European Union is to be reached by a pathway of gradualism, each Member State will immediately cede a portion of its sovereignty and freedom of action in matters of foreign policy.

    Henchy J. stated that pursuant to Article 1 of the Constitution:–

    The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right .... to determine its relations with other nations .... in accordance with its own genius and traditions.

    It appears to me that this affirmation means that the State's right to conduct its external relations is part of what is inalienable and indefeasible in what is described in Article 5 as ‘a sovereign, independent, democratic State.’ It follows, in my view, that any attempt by the Government to make a binding commitment to alienate in whole or in part to other states the conduct of foreign relations would be inconsistent with the Government's duty to conduct those relations in accordance with the Constitution.

    The ultimate source and limits of the Government's powers in the conduct of foreign relations are to be found in Article 6, s. 1 of the Constitution:

    All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.

    It follows that the common good of the Irish people is the ultimate standard by which the constitutional validity of the conduct of foreign affairs by the Government is to be judged. In this and in a number of other respects throughout the Constitution the central position of the common good of the Irish people is stressed as one of the most fundamental characteristics of Ireland as a sovereign, independent, democratic state.

  105. A perusal of Title III of the SEA satisfies me that each ratifying Member State will be bound to surrender part of its sovereignty in the conduct of foreign relations.

  106. Hederman J. stated at p. 794:–

  107. I agree with the judgments of Walsh J. and Henchy J. for the reasons given by them. There is little I can usefully add.

    It appears to me that the essential point at issue is whether the State can by any act on the part of its various organs of government enter into binding agreements with other states, or groups of states, to subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interests of other states, as distinct from electing from time to time to pursue its own particular policies in union or in concert with other states in their pursuit of their own similar or even identical policies.

    The State's organs cannot contract to exercise in a particular procedure their policy-making roles or in any way to fetter powers bestowed unfettered by the Constitution. They are the guardians of these powers-not the disposers of them. For the reasons already stated I would allow the appeal.

  108. Principles

    1. An important aspect of the sovereignty of the State is the exercise of the fundamental powers of the state by the organs designated in the Constitution. Under the Constitution the Government has been given the power to exercise the executive functions of state.

    2. Foreign policy is an important aspect of executive power and is a function of the Government.

    3. It is a routine exercise of executive power for the Government to enter into a treaty, as a matter of foreign policy, for the State.

    4. All treaties involve an element of policy. That is the nature of a treaty.

    5. Thus, the Constitution empowers the Government to exercise executive policy, which includes a decision to enter into a treaty as a matter of policy. However, in Crotty there was a specific aspect of the treaty in issue which took it outside the norm. As was stated in Crotty, the Government may not abdicate its power as the executive organ of the State. If such a decision is required it may be taken only by the people, as the ultimate authority in the State. If a treaty involves a fundamental transformation, such as a ceding of sovereignty, then it would require a mandate of the people.

    6. As Hederman J. pointed out, the organs of State, including the Government, cannot enter into an agreement to subordinate its powers to another. The Government may not qualify sovereign power to formulate foreign policy by abdicating such decisions to a foreign institution.

    7. In the Crotty case the Court held that Title III of the SEA would bind the State to concede part of its sovereignty in foreign policy by conducting foreign policy in the future, future decisions on foreign policy, without reference to the common good, and that such a step required authorisation by the people through a referendum.

    ESM

  109. It is thus necessary to consider the ESM treaty to determine how the principles in the Crotty decision apply to this treaty.

  110. As the ESM is at the heart of the appellant’s submissions, I refer to it in some detail.

  111. The Recitals to the Treaty state:–

  112. (1)

    The European Council agreed on 17 December 2010 on the need for euro area Member States to establish a permanent stability mechanism. This European Stability Mechanism (“ESM”) will assume the tasks currently fulfilled by the European Financial Stability Facility (“EFSF”) and the European Financial Stabilisation Mechanism (“EFSM”) in providing, where needed, financial assistance to euro area Member States.

    (2)

    On 25 March 2011, the European Council adopted Decision 2011/199/EU amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro 2 adding the following paragraph to Article 136: “The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality”.

    (3)

    With a view to increasing the effectiveness of the financial assistance and to prevent the risk of financial contagion, the Heads of State or Government of the Member States whose currency is the euro agreed on 21 July 2011 to “increase [the] flexibility [of the ESM] linked to appropriate conditionality”.

    (4)

    Strict observance of the European Union framework, the integrated macro-economic surveillance, in particular the Stability and Growth Pact, the macroeconomic imbalances framework and the economic governance rules of the European Union, should remain the first line of defence against confidence crises affecting the stability of the euro area.

    (5)

    On 9 December 2011 the Heads of State or Government of the Member States whose currency is the euro agreed to move towards a stronger economic union including a new fiscal compact and strengthened economic policy coordination to be implemented through an international agreement, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (“TSCG”). The TSCG will help develop a closer coordination within the euro area with a view to ensuring a lasting, sound and robust management of public finances and thus addresses one of the main sources of financial instability. This Treaty and the TSCG are complementary in fostering fiscal responsibility and solidarity within the economic and monetary union. It is acknowledged and agreed that the granting of financial assistance in the framework of new programmes under the ESM will be conditional, as of 1 March 2013, on the ratification of the TSCG by the ESM Member concerned and, upon expiration of the transposition period referred to in Article 3(2) TSCG on compliance with the requirements of that article.

    (6)

    Given the strong interrelation within the euro area, severe risks to the financial stability of Member States whose currency is the euro may put at risk the financial stability of the euro area as a whole. The ESM may therefore provide stability support on the basis of a strict conditionality, appropriate to the financial assistance instrument chosen if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States. The initial maximum lending volume of the ESM is set at EUR 500 000 million, including the outstanding EFSF stability support. The adequacy of the consolidated ESM and EFSF maximum lending volume will, however, be reassessed prior to the entry into force of this Treaty. If appropriate, it will be increased by the Board of Governors of the ESM, in accordance with Article 10, upon entry into force of this Treaty.

    (7)

    All euro area Member States will become ESM Members. As a consequence of joining the euro area, a Member State of the European Union should become an ESM Member with full rights and obligations, in line with those of the Contracting Parties.

    (8)

    The ESM will cooperate very closely with the International Monetary Fund (“IMF”) in providing stability support. The active participation of the IMF will be sought, both at technical and financial level. A euro area Member State requesting financial assistance from the ESM is expected to address, wherever possible, a similar request to the IMF.

    (9)

    Member States of the European Union whose currency is not the euro (“non euro area Member States”) participating on an ad hoc basis alongside the ESM in a stability support operation for euro area Member States will be invited to participate, as observers, in the ESM meetings when this stability support and its monitoring will be discussed. They will have access to all information in a timely manner and be properly consulted.

    (10)

    On 20 June 2011, the representatives of the Governments of the Member States of the European Union authorised the Contracting Parties of this Treaty to request the European Commission and the European Central Bank (“ECB”) to perform the tasks provided for in this Treaty.

    (11)

    In its statement of 28 November 2010, the Euro Group stated that standardised and identical Collective Action Clauses (“CACs”) will be included, in such a way as to preserve market liquidity, in the terms and conditions of all new euro area government bonds. As requested by the European Council on 25 March 2011, the detailed legal arrangements for including CACs in euro area government securities were finalised by the Economic and Financial Committee.

    (12)

    In accordance with IMF practice, in exceptional cases an adequate and proportionate form of private sector involvement shall be considered in cases where stability support is provided accompanied by conditionality in the form of a macro-economic adjustment programme.

    (13)

    Like the IMF, the ESM will provide stability support to an ESM Member when its regular access to market financing is impaired or is at risk of being impaired. Reflecting this, Heads of State or Government have stated that the ESM loans will enjoy preferred creditor status in a similar fashion to those of the IMF, while accepting preferred creditor status of the IMF over the ESM. This status will be effective as of the date of entry into force of this Treaty. In the event of ESM financial assistance in the form of ESM loans following a European financial assistance programme existing at the time of the signature of this Treaty, the ESM will enjoy the same seniority as all other loans and obligations of the beneficiary ESM Member, with the exception of the IMF loans.”

    (14)

    The euro area Member States will support equivalent creditor status of the ESM and that of other States lending bilaterally in coordination with the ESM.

    (15)

    ESM lending conditions for Member States subject to a macroeconomic adjustment programme, including those referred to in Article 40 of this Treaty, shall cover the financing and operating costs of the ESM and should be consistent with the lending conditions of the Financial Assistance Facility Agreements signed between the EFSF, Ireland and the Central Bank of Ireland on the one hand and the EFSF, the Portuguese Republic and Banco de Portugal on the other.

    (16)

    Disputes concerning the interpretation and application of this Treaty arising between the Contracting Parties or between the Contracting Parties and the ESM should be submitted to the jurisdiction of the Court of Justice of the European Union, in accordance with Article 273 of the Treaty on the Functioning of the European Union (“TFEU”).

    (17)

    Post-programme surveillance will be carried out by the European Commission and by the Council of the European Union within the framework laid down in Articles 121 and 136 TFEU.

  113. The purpose of the ESM Treaty is set out in Article 3, being:–

  114. The purpose of the ESM shall be to mobilise funding and provide stability support under strict conditionality, appropriate to the financial assistance instrument chosen, to the benefit of ESM Members which are experiencing, or are threatened by, severe financing problems, if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States. For this purpose, the ESM shall be entitled to raise funds by issuing financial instruments or by entering into financial or other agreements or arrangements with ESM Members, financial institutions or other third parties.

  115. The key points in the submissions made on behalf of the appellant related to the structure and voting rules, which are set out in Article 4. The provisions are:–

  116. 1.

    The ESM shall have a Board of Governors and a Board of Directors, as well as a Managing Director and other dedicated staff as may be considered necessary.

    2.

    The decisions of the Board of Governors and the Board of Directors shall be taken by mutual agreement, qualified majority or simple majority as specified in this Treaty. In respect of all decisions, a quorum of 2/3 of the members with voting rights representing at least 2/3 of the voting rights must be present.

    3.

    The adoption of a decision by mutual agreement requires the unanimity of the members participating in the vote. Abstentions do not prevent the adoption of a decision by mutual agreement.

    4.

    By way of derogation from paragraph 3, an emergency voting procedure shall be used where the Commission and the ECB both conclude that a failure to urgently adopt a decision to grant or implement financial assistance, as defined in Articles 13 to 18, would threaten the economic and financial sustainability of the euro area. The adoption of a decision by mutual agreement by the Board of Governors referred to in points (f) and (g) of Article 5(6) and the Board of Directors under that emergency procedure requires a qualified majority of 85% of the votes cast.

    Where the emergency procedure referred to in the first subparagraph is used, a transfer from the reserve fund and/or the paid-in capital to an emergency reserve fund is made in order to constitute a dedicated buffer to cover the risks arising from the financial support granted under that emergency procedure. The Board of Governors may decide to cancel the emergency reserve fund and transfer its content back to the reserve fund and/or paid-in capital.

    5.

    The adoption of a decision by qualified majority requires 80% of the votes cast.

    6.

    The adoption of a decision by simple majority requires a majority of the votes cast.

    7.

    The voting rights of each ESM Member, as exercised by its appointee or by the latter’s representative on the Board of Governors or Board of Directors, shall be equal to the number of shares allocated to it in the authorised capital stock of the ESM as set out in Annex II.

    8.

    If any ESM Member fails to pay any part of the amount due in respect of its obligations in relation to paid-in shares or calls of capital under Articles 8, 9 and 10, or in relation to the reimbursement of the financial assistance under Article 16 or 17, such ESM Member shall be unable, for so long as such failure continues, to exercise any of its voting rights. The voting thresholds shall be recalculated accordingly.

  117. A board of governors is provided for in Article 5. Each ESM member shall appoint a governor, and an alternate. Each governor shall be a member of the government of the ESM member who has responsibility for finance. The member of the European Commission in charge of economic and monetary affairs and the president of the ECB, as well as the president of the Euro Group, may participate in the meetings of the Board of Governors as observers.

  118. The Board of Governors shall take the following decisions, per Article 5(6), by mutual agreement:–

  119. (a)

    to cancel the emergency reserve fund and transfer its content back to the reserve fund and/or paid-in capital, in accordance with Article 4(4);

    (b)

    to issue new shares on terms other than at par, in accordance with Article 8(2);

    (c)

    to make the capital calls, in accordance with Article 9(1);

    (d)

    to change the authorised capital stock and adapt the maximum lending volume of the ESM, in accordance with Article 10(1);

    (e)

    to take into account a possible update of the key for the subscription of the ECB capital, in accordance with Article 11(3), and the changes to be made to Annex I in accordance with Article 11(6);

    (f)

    to provide stability support by the ESM, including the economic policy conditionality as stated in the memorandum of understanding referred to in Article 13(3), and to establish the choice of instruments and the financial terms and conditions, in accordance with Articles 12 to 18;

    (g)

    to give a mandate to the European Commission to negotiate, in liaison with the ECB, the economic policy conditionality attached to each financial assistance, in accordance with Article 13(3);

    (h)

    to change the pricing policy and pricing guideline for financial assistance, in accordance with Article 20;

    (i)

    to change the list of financial assistance instruments that may be used by the ESM, in accordance with Article 19;

    (j)

    to establish the modalities of the transfer of EFSF support to the ESM, in accordance with Article 40;

    (k)

    to approve the application for membership of the ESM by new members, referred to in Article 44;

    (l)

    to make adaptations to this Treaty as a direct consequence of the accession of new members, including changes to be made to the distribution of capital among ESM Members and the calculation of such a distribution as a direct consequence of the accession of a new member to the ESM, in accordance with Article 44; and

    (m)

    to delegate to the Board of Directors the tasks listed in this Article.

  120. The Board of Governors shall take the following decisions, per Article 5(7), by qualified majority:–

  121. (a)

    to set out the detailed technical terms of accession of a new member to the ESM, in accordance with Article 44;

    (b)

    whether to be chaired by the President of the Euro Group or to elect, by qualified majority, the Chairperson and Vice-Chairperson of the Board of Governors, in accordance with paragraph 2;

    (c)

    to set out by-laws of the ESM and the rules of procedure applicable to the Board of Governors and Board of Directors (including the right to establish committees and subsidiary bodies), in accordance with paragraph 9;

    (d)

    to determine the list of activities incompatible with the duties of a Director or an alternate Director, in accordance with Article 6(8);

    (e)

    to appoint and to end the term of office of the Managing Director, in accordance with Article 7;

    (f)

    to establish other funds, in accordance with Article 24;

    (g)

    on the actions to be taken for recovering a debt from an ESM Member, in accordance with Article 25(2) and (3);

    (h)

    to approve the annual accounts of the ESM, in accordance with Article 27(1);

    (i)

    to appoint the members of the Board of Auditors, in accordance with Article 30(1);

    (j)

    to approve the external auditors, in accordance with Article 29;

    (k)

    to waive the immunity of the Chairperson of the Board of Governors, a Governor, alternate Governor, Director, alternate Director or the Managing Director, in accordance with Article 35(2);

    (l)

    to determine the taxation regime applicable to the ESM staff, in accordance with Article 36(5);

    (m)

    on a dispute, in accordance with Article 37(2); and

    (n)

    any other necessary decision not explicitly provided for by this Treaty.

  122. A board of directors is provided for in Article 6. Each governor shall provide one director and one alternate from among people of high competence in economic and financial matters.

  123. Pursuant to Article 7, a managing director shall be appointed by the Board of Governors from among candidates having the nationality of an ESM member, relevant international experience, and a high level of competence in economic and financial matters.

  124. Article 8 governs the matter of authorised capital stock. It provides:–

  125. 1.

    The authorised capital stock shall be EUR 700 000 million. It shall be divided into seven million shares, having a nominal value of EUR 100 000 each, which shall be available for subscription according to the initial contribution key provided for in Article 11 and calculated in Annex I.

    2.

    The authorised capital stock shall be divided into paid-in shares and callable shares. The initial total aggregate nominal value of paid-in shares shall be EUR 80 000 million. Shares of authorised capital stock initially subscribed shall be issued at par. Other shares shall be issued at par, unless the Board of Governors decides to issue them in special circumstances on other terms.

    3.

    Shares of authorised capital stock shall not be encumbered or pledged in any manner whatsoever and they shall not be transferable, with the exception of transfers for the purposes of implementing adjustments of the contribution key provided for in Article 11 to the extent necessary to ensure that the distribution of shares corresponds to the adjusted key.

    4.

    ESM Members hereby irrevocably and unconditionally undertake to provide their contribution to the authorised capital stock, in accordance with their contribution key in Annex I. They shall meet all capital calls on a timely basis in accordance with the terms set out in this Treaty.

    5.

    The liability of each ESM Member shall be limited, in all circumstances, to its portion of the authorised capital stock at its issue price. No ESM Member shall be liable, by reason of its membership, for obligations of the ESM. The obligations of ESM Members to contribute to the authorised capital stock in accordance with this Treaty are not affected if any such ESM Member becomes eligible for, or is receiving, financial assistance from the ESM.

  126. Article 10 enables changes in authorised capital stock. The Board of Governors shall review regularly and at least every five years the maximum lending volume and the adequacy of the authorised capital stock of the ESM and may decide to change and to amend Article 8 and Annex II accordingly.

  127. Article 12 sets out the principles by which stability support may be granted. Section 1 states:–

  128. 1.

    If indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

  129. An ESM member may address a request for stability support to the chairperson of the Board of Governors. On receipt of such request the chairperson of the Board of Governors shall entrust the European Commission, in liaison with the ECB, with the following tasks:–

    1. to assess the existence of a risk to the financial stability of the euro area as a whole or of its Member States, unless the ECB has already submitted an analysis under Article 18(2);

    2. to assess whether public debt is sustainable. Wherever appropriate and possible, such an assessment is expected to be conducted together with the IMF;

    3. to assess the actual or potential financing needs of the ESM Member concerned.

  130. After such request of an ESM member and the above assessment, the Board of Governors may decide to grant, in principle, stability support to the ESM member in the form of a financial assistance facility.

  131. If such a decision is made the Board of Governors shall:–

  132. Entrust the European Commission – in liaison with the ECB and, wherever possible, together with the IMF – with the task of negotiating, with the ESM Member concerned, a memorandum of understanding (an “MoU”) detailing the conditionality attached to the financial assistance facility. The content of the MoU shall reflect the severity of the weaknesses to be addressed and the financial assistance instrument chosen. In parallel, the Managing Director of the ESM shall prepare a proposal for a financial assistance facility agreement, including the financial terms and conditions and the choice of instruments, to be adopted by the Board of Governors.

    The MoU shall be fully consistent with the measures of economic policy coordination provided for in the TFEU, in particular with any act of European Union law, including any opinion, warning, recommendation or decision addressed to the ESM Member concerned.

    The European Commission shall sign the MoU on behalf of the ESM, subject to prior compliance with the conditions set out in paragraph 3 and approval by the Board of Governors.

    The Board of Directors shall approve the financial assistance facility agreement detailing the financial aspects of the stability support to be granted and, where applicable, the disbursement of the first tranche of the assistance.

    The ESM shall establish an appropriate warning system to ensure that it receives any repayments due by the ESM Member under the stability support in a timely manner.

    The European Commission – in liaison with the ECB and, wherever possible, together with the IMF – shall be entrusted with monitoring compliance with the conditionality attached to the financial assistance facility.

  133. Other relevant articles include Article 21 which relates to borrowing options. It provides:–

  134. 1.

    The ESM shall be empowered to borrow on the capital markets from banks, financial institutions or other persons or institutions for the performance of its purpose.

    2.

    The modalities of the borrowing operations shall be determined by the Managing Director, in accordance with detailed guidelines to be adopted by the Board of Directors.

    3.

    The ESM shall use appropriate risk management tools, which shall be reviewed regularly by the Board of Directors.

    Issues of interpretation or application of the provisions of the ESM Treaty and the bye-laws of the ESM arising between any ESM member and the ESM, or between ESM members, shall be submitted to the Board of Directors for decision: per Article 37. The Board of Governors shall decide any such dispute. If an ESM member contests that decision Article 37 provides that the dispute shall be submitted to the Court of Justice of the European Union, which judgment will be binding on the parties.

  135. Article 41 makes provision for the payment of the initial capital, as follows:–

  136. 1.

    Without prejudice to paragraph 2, payment of paid-in shares of the amount initially subscribed by each ESM Member shall be made in five annual instalments of 20% each of the total amount. The first instalment shall be paid by each ESM Member within fifteen days of the date of entry into force of this Treaty. The remaining four instalments shall each be payable on the first, second, third and fourth anniversary of the payment date of the first instalment.

    2.

    During the five year period of capital payment by instalments, ESM members shall accelerate the payment of paid-in shares, in a timely manner prior to the issuance date, in order to maintain a minimum 15% ratio between paid-in capital and the outstanding amount of ESM issuances and guarantee a minimum combined lending capacity of the ESM and the EFSF of Eur 500,000 million.

    Application of the Crotty principles

  137. The Government has the power under the Constitution to exercise the executive power of the State. Foreign policy, including entering into a treaty, is part of the executive role. The exercise of this power is subject to the Constitution. The Constitution explicitly empowers the State to enter into international agreements: Article 29.4.2°. There are express limitations on the power of the Government, for example, Article 29.5.1° requires that every international agreement be laid before Dáil Éireann, and Article 29.5.2° provides that the State is not bound by an international agreement involving a charge upon public funds unless Dáil Éireann has agreed the terms.

  138. At issue in Crotty was the future conduct of external relations of the State, i.e. the executive power of the sovereign State to decide future external relations. Crotty held that the Constitution provided that the Government could not dispose of its executive power by entering into an agreement with another to abdicate its powers under the Constitution, in circumstances where the interests of others may supersede the interests of the State, as the powers that are given to the organs of State under the Constitution are for the common good of the people of Ireland. Thus, if such a decision is required to be taken to relinquish the powers of an organ of State it must be taken by the people.

  139. No such fundamental decision arises in relation to the ESM Treaty.

  140. In the ESM Treaty, the member states of the euro area have determined to join and establish the ESM. There are two important functions of the ESM. The ESM will be entitled to raise funds, by subscriptions from the states and to borrow money, and the ESM will support member states in financial difficulties.

  141. .v Under the ESM Ireland will have a financial liability. The Dáil has already permitted a maximum liability of €11,145,400,000; section 3 of the European Stability Mechanism Act, 2012, which constitutes Ireland’s capital subscription: Article 8(1) and Annex II of the ESM Treaty. This figure is divided into paid-in and callable shares. According to Article 8(2) of the ESM Treaty, Ireland’s subscription to be paid-in amounts to €1,273,760,000, which, as set out in Article 41(1), is to be paid in five annual instalments of €254,752,000, or, if Article 42(2) applies, to be paid at an accelerated rate. The callable shares are the remainder and amount to €9,871,640,000, i.e. the difference between the paid-in amount and the capital subscription. This remainder may be called-in in accordance with the provisions in Article 5(6)(c) and Article 9 of the ESM Treaty. However, a decision to change the authorised capital stock, and thereby, for example, increase Ireland’s capital subscription beyond €11,145,400,000, requires to be made by the unanimous decision of the Board of Governors: Article 5(6)(d) and Article 10. Also, this requires the completion of national procedures, which, in Ireland, is the approval of Dáil Éireann, and amendment of the Act of 2012. Thus, any increase in the financial liability of Ireland would require the unanimous decision of the Board of Governors, and Irish national procedures, including the amendment of the Act of 2012.

  142. On the matter of financial support, Ireland could request financial assistance. If the State applied for such funding, any terms for such funding would be required to be within the constitutional ambit. The Government has a duty to ensure that by its decisions and actions the terms of the Constitution are not infringed.

  143. Neither of the above functions impinges upon the economic or monetary sovereignty of the State.

  144. The policy of the ESM Treaty is clearly defined in the treaty and the State has agreed to that policy of safeguarding the financial stability of the euro area as a whole and of its member states through the mechanisms provided for in the treaty. The State has agreed to a specific policy and the mechanism of implementation, which are grounded by a specified maximum financial contribution.

  145. The appellant argued that the State has abdicated some of its decision-making competency in foreign policy in a manner that is an unconstitutional derogation of the State’s sovereignty. However, the decisions from which the State may be excluded or vote against without impact on the result, for example, by virtue of a loss of voting rights or the impact of qualified majority or simple majority voting, are decisions concerning the implementation of the policy, and are not decisions that (i) determine policy, (ii) create a mechanism of policy determination, or (iii) increase the State’s specified maximum financial contribution.

  146. The decisions of particular concern to the appellant arise in very specific circumstances. The State may be excluded from voting under Article 4(8) by failing to make a payment required under Articles 8, 9, 10, 16 or 17. However, if Ireland found itself in such a position, it would not incur increased financial liability beyond the maximum contribution specified in s. 3 of the Act of 2012, without the approval of Dáil Éireann, the amendment of the Act of 2012, and the notification of the Depositary of the completion of these steps. Consequently, such a situation would not diminish the State’s sovereignty.

  147. In addition, the appellant raised the fact that mutual agreement is not required under the emergency procedure provided for in Article 4(4), and in such a situation a decision affecting Ireland could be made in the State’s absence. While in the general course the treaty provides for unanimous decisions to grant or implement financial assistance, circumstances of urgency create contingency voting requirements of 85% of votes cast if the “economic and financial sustainability of the euro area” is threatened. Such a situation would arise only if the European Commission and the ECB both considered that a failure to urgently make a decision to grant or implement financial assistance would threaten the economic and financial sustainability of the euro area. The policy remains the same and, indeed, more concentrated i.e. the consideration is the sustainability of the euro area, rather than the stability of the euro area as a whole and of its member states.

  148. Article 4(4) implements a specific policy of the ESM Treaty, through a specified mechanism, within the limits of the specified maximum financial contribution. Consequently, such a situation does not diminish the State’s sovereignty.

  149. Thus, in relation to this limb of the appeal, it is clear that the relevant policy was determined by the Irish executive and legislature. The State has not ceded policy making for the future. The State has not ceded power to another institution to enable the creation of policy in the future. Nor has the State ceded to elsewhere the power to increase the State’s financial contributions. Consequently, there has been no transfer of sovereignty to any degree which is incompatible with the Constitution. To refer to the analysis by Walsh J. in Crotty, there has not been an abdication of freedom of action or to bind the State in its freedom of action in its formulation of foreign policy. Nor, in reference to the judgment of Henchy J. in Crotty, has there been any attempt by the Government to make a binding commitment to alienate to other States the conduct of foreign relations. Nor has there been any attempt at a fundamental transformation or diminution of sovereignty, such as arose in the Crotty case. Nor, in reference to the judgment of Hederman J. in Crotty, is this an agreement to subordinate or submit the exercise of the powers bestowed by the Constitution to the interests of other States. Rather, it is an election by the Government of a policy in union with other States in pursuit of an identical policy.

  150. The decision by the Government to enter into the ESM Treaty was a policy decision of the Government, an exercise of the executive power pursuant to the Constitution. The role of the Court is only to determine whether powers exercised under the Constitution have been exceeded. For the reasons stated, I am satisfied that they have not been exceeded on this issue. As to the policy, the Court has no role in relation to the policy itself, the policy is a matter for the Government.

  151. Injunction Issue

  152. Counsel for the appellant argued two issues before the Court in relation to the application for an interlocutory injunction: first, that C-106/77 Simmenthal II [1978] ECR 629, which found that there was a duty to set aside provisions of national law which are incompatible with EU law, usurped the traditional test of Campus Oil Ltd v Minister for Industry and Energy (No. 2) [1983] I.R. 88, referred to as “Campus Oil”, in the circumstances of this case; second, that there would be irreparable damage if the injunction sought was not granted. In written submissions, in support of the first issue, reliance was placed on C-213/89 Factortame ECR 1-2433 and C226/99 Siples [2001] ECR 1-277 to argue that this Court’s obligation was to ensure the full effectiveness of EU law, including the judgments of the European Court of Justice, and that interim relief is a tool to be used in fulfilling that obligation. Counsel argued that there were serious doubts concerning the compatibility of the ESM Treaty with EU law, upon which the European Court of Justice would provide preliminary rulings following the reference procedure; that this Court was acting as a court of the EU by referring questions to the European Court of Justice and therefore should apply Simmenthal II jurisprudence to preserve Ireland’s status as in conformity with EU law; and that once the ESM Treaty enters into force, it would be immune from national judicial proceedings, and, counsel argued, that the ESM Treaty was irreversible. In addition, counsel argued that if the ESM Treaty was found unlawful, the State would have acted in defiance of the rule of law, the State had no method to reverse its commitment to the ESM Treaty, and the State would have paid money into the ESM.

  153. Counsel for the State argued that the correct test was Campus Oil as informed by the joined cases of C–143/88 & C–92/89 Zuckerfabrik Süderdithmarschen AG v Hauptzollamt Itzehoe and Zuckerfabrik Soest GmbH v Hauptzollamt Paderborn [1991] ECR I-415, referred to as “Zuckerfabrik”. Counsel argued that the case before the Court concerns an international treaty, that the ESM Treaty does not require the European Council Decision for ratification; that the State would be bound by a decision of the Court following consideration of the preliminary ruling of the European Court of Justice, if it were in the appellant’s favour; that the appellant would suffer no damage from ratification; and, that the State would risk incalculable harm if the injunction was granted and the treaty came into force, in circumstances where the appellant has not given an undertaking as to damages. Counsel also sought to distinguish the decision in Crotty on the basis that the Court there accepted that the appellant would be left without a remedy in the absence of an injunction, that the State did not argue the urgency of ratification, and that the duration of the injunction was seven weeks from application to judgment.

  154. There were affidavits before the High Court (which refused an injunction) and this Court. In an affidavit by Jim O’Brien, Second Secretary General of the Department of Finance, deposed on behalf of the State on the 27th June, 2012, he stated, inter alia,:–

  155. 14.

    I say and believe and have been advised by my legal advisors that the need for the ESM is urgent, and the Government believes that it is essential in the national interest that Ireland should be a member of the ESM from the outset.

    ....

    17.

     

    There are of course, important reasons of policy and national and broader EU interests for ratifying the ESM at the earliest possible stage. The Euro Area Member States, including Ireland, have announced their intention to ratify the ESM in July, specifically on 9th July 2012. It is important that Ireland should be in a position to be in the vanguard of the countries ratifying the ESM, and to be a member from the outset. It is critical that the ESM should have the largest possible capital base from the outset, and Ireland's contribution, though relatively small, is important in the aggregate. Of equal importance is the fact the decisions of substance in the ESM are taken by mutual agreement. If Ireland is not a party from the outset, it will not have the ability to participate in and vote on the early decisions of the ESM.

    18.

    For these reasons, it is the considered view of the Government that it is essential and imperative for Ireland, and for the euro zone as a whole, that the ESM enters into force in accordance with the envisaged timetable, and also, that Ireland should be a member from the ESM's initial entry into force – for which the target date is 9th July 2012. The essential interests of Ireland and of the Union in the stability of the euro zone are in issue and the establishment and creation of the ESM is regarded by all Member States, but particularly those whose currency is the euro, as well as by the European Commission, the European Central Bank and the European Parliament, as an essential component in the ongoing efforts to achieve that stabilisation. Those interests could be seriously damaged if the State is injuncted from ratifying the ESM Treaty.

    19.

    On the other hand, I say and believe that the [appellant] would suffer no personal irreparable other harm, whether financial or otherwise, including irreparable harm to him in his capacity as a member of Dáil Éireann, by ratification of the ESM Treaty by Ireland, if the CJEU were ultimately to decide that the said Treaty were incompatible with Union law.

    20.

    If Ireland were prevented from ratifying the ESM Treaty, this could impact very detrimentally on Ireland's proposed re-entry to the financial markets and on the State's capacity to raise the funding it needs to run the country going into 2014. This would represent a serious setback to the substantial progress made to date towards completing and exiting this programme by the end of 2013. I say therefore that the balance of convenience in this case favours a refusal by this Honourable Court of the injunctive relief now sought by the [appellant].

    21.

    Although Ireland is not under a Union law obligation to approve the European Council Decision 201 1/199/EU before 1st January 2013, it is obliged thereunder to take the step necessary to secure, in accordance with the necessary constitutional requirements, Ireland's approval. The Government considers that there is no reason why it should delay taking a decision to notify Ireland's approval of the European Council Decision to the Secretary-General of the Council once the Oireachtas has enacted the European Communities (Amendment) Bill 2012. The Government considers that delaying the said notification would introduce an element of uncertainty – whether legal or in the markets – at a time of economic instability, and that this would be contrary to the vital national interests of Ireland in the present deeply uncertain times. Furthermore, the [State] recognise the legality of the European Council Decision, which was adopted unanimously by all of the Member States of the Union and approved by all of the institutions involved in and consulted its adoption under Article 48(6) of the TEU, and, thus, the legality of the proposed amendment to Article 136 TFEU, not least for the reasons already set out above. If this Honourable Court ultimately determines that the [appellant] may maintain his challenge in these proceedings to the validity of that Decision and that the Court has sufficiently serious doubts as to the Decision's validity such as might require it to refer the question of its validity to the CJEU, that Court has power to deal with the temporal effects of its judgment if it ultimately determines that the Decision is invalid. The [State] respectfully consider that there would therefore be neither a need nor a justification for this Court to prevent the Government from notifying Ireland's approval of the Decision as proposed.

    Decision on Injunction

  156. The appeal by the appellant of the refusal of interlocutory relief by the High Court is a relief sought pending the determination of the reference for preliminary ruling by the Court of Justice, because of the Court’s ruling on the first two issues determined in this appeal.

  157. The appellant's argument that Simmenthal II, Factortame and Siples require this Court to grant an injunction without the framework of Campus Oil is not well founded as, in the instant case, this Court has the capacity to grant an injunction.

  158. The longstanding test to guide the Court in the exercise of its discretion as to whether to grant an interlocutory injunction was stated in Campus Oil which I would apply. In Campus Oil, O'Higgins C.J. stated at pp. 105 to 106:

  159. Interlocutory relief is granted to an applicant where what he complains of is continuing and is causing him harm or injury which may be irreparable in the sense that it may not be possible to compensate him fairly or properly by an award of damages. Such relief is given because a period must necessarily elapse before the action can come for trial and for the purpose of keeping matters in statu quo until the hearing. The application is made on motion supported by affidavit. [.... ] In cases where rights are disputed and challenged and where a significant period must elapse before the trial, the court must exercise its discretion (to grant interlocutory relief) with due regard to certain well established principles. Not only will the court have regard to what is complained of and whether damages would be an appropriate remedy but it will consider what inconvenience, loss and damage might be caused to the other party, and will enquire whether the applicant has shown that the balance of convenience is in his favour.

  160. At the kernel of the discretion to be exercised is the balance of convenience to be achieved. I am satisfied that a significant, but not determinative, factor in this case is the described Government policy, and its consequences, as stated in the affidavit of Jim O’Brien, which has been referred to earlier in this judgment.

  161. agree with the judgment of O’Donnell J. in his analysis of the jurisprudence on the granting of interlocutory injunctions and his conclusion that the balance of convenience, on any view, weighs heavily against the grant of an injunction in these circumstances. The appellant’s claim has been addressed with considerable expedition in the High Court, this Court, and the Court of Justice of the European Union, which process will provide a very speedy resolution of the issues raised by the appellant, and pending the final outcome of those proceedings the challenged measures should remain in place.

  162. Conclusion

  163. On the first issue, applying the principles stated in Crotty to the facts of the case, I am satisfied that the Government did not abdicate, alienate, cede, or subordinate its power to another. The decision of the Government to enter into the ESM Treaty was a policy decision within its executive power, pursuant to the Constitution, and so did not involve an impermissible transfer of sovereignty.

  164. As to the application for an injunction, for the reasons stated, I am satisfied that it was not appropriate to grant an injunction.

    Justice Hardiman

  165. This judgment concerns the compatibility with the Constitution of Ireland of the ratification by the Irish Government of the Treaty establishing the European Stability Mechanism (ESM). The issue is raised by the plaintiff, Deputy Thomas Pringle who is an independent member of Dáil Eireann. Deputy Pringle’s proceedings also raise other issues to do with the ESM Treaty but these do not arise for immediate determination and some have been the subject of a reference to the Court of Justice. The constitutional issue comes before this Court by way of appeal from the judgment and order of the High Court (Laffoy J.) perfected the 18th day of July, 2012.

  166. Irrelevant factors.

  167. It will, of course, be understood that the question before the Court is an entirely legal one. The Court is not required to express, or to form, any view of the merits of the European Stability Mechanism or of its efficacy for the purposes for which it was intended. Those are political questions, outside the jurisdiction of the Court and firmly in the political domain. Similarly, during the weeks of reservation of judgment in this case a number of persons expressed in the media the view that the Irish government should be enabled to take steps in a European context without having to submit them to referendum. This, too, is a purely political issue and the Court must proceed on the basis of the Constitution as it now stands and whose relevant provisions are fully discussed below. Finally, there has been much discussion as to the true scope of the European Stability Mechanism and in particular whether it can be, or will in practice be “mobilised” to provide support to members of the Euro zone whose financial difficulties predate the existence of the European Stability Mechanism itself. This question is also a political one and one which, it would appear, will be decided by entities quite outside the Irish State and its constitutional order.

  168. Financial dimension of issues.

  169. Section 3 of the European Stability Mechanism Act 2012 provides as follows:

  170. 3.

    There may be paid out of the Central Fund or the growing produce of that Fund sums, aggregating to a sum not exceeding €11,145,400,000 to enable the State to make payments in respect of its contribution to the authorised capital stock of the ESM in accordance with the Treaty.

  171. As will be seen below, Ireland will have no veto on the question of whether this entire sum is called upon or not and will bind itself in the Treaty “irrevocably and unconditionally” to pay this sum if called upon.

  172. The sum will be payable either at the rates set out in the Treaty (quoted below) or at an accelerated rate.

  173. It is manifest that this is a vast sum of money, one of macro-economic significance. I do not intend to repeat this observation each time the sum is mentioned in this judgment. For comparative purposes, however, it may be observed that it is almost four times the €3 billion which is sought to be saved from Ireland’s budget in the current year; that it dwarfs the €1.6 billion which is Ireland’s estimated take from the Common Agricultural Policy; that it approaches the total amount of Ireland’s health budget and that it would represent the combined current voted expenditure of:

    1. Department of Education and Skills: €8,241,643,000.

    2. An Garda Síochána: €1,424,837,000.

    3. Department of Agriculture Food and the Marine: €1,143,934,000.

  174. It may be argued that the figure is irrelevant since if it were twice as big, or only half as big, that would not affect the legal issue of whether the ratification by Ireland of the Treaty is compatible with the Constitution. Nevertheless, it is salutary to bear in mind the truly enormous scale of the figure at issue in the decision on whether or not to adhere to the Treaty. The disposition of a sum of taxpayers’ money in the order of €11 billion is truly a question of national policy, as that phrase is used in Article 6 of the Constitution.

  175. Some constitutional provisions.

  176. The plaintiff’s case has been expounded with regard to a large number of constitutional provisions, which will be mentioned below. The fundamentally important provisions for present purposes seem to me to be Articles 1, 5 and 6 of the Constitution which provide:

  177. Article 1

    The Irish nation hereby affirms its inalienable, indefeasible and sovereign right to choose its own form of government, to determine its relations with other nations, and to develop its life, political economic and cultural, in accordance with its own genius and traditions.

    Article 5

    Ireland is a sovereign independent, democratic State.

    Article 6

    (1)

    All powers of government, legislative, executive and judicial derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy according to the requirements of the common good.

    [emphasis supplied]

  178. The plaintiff also relies on Articles 28.2, which provides that the Executive power of the State shall be exercised by (or on the authority of) the Government and Article 29.4 (which provides that the Executive power of the State in or in connection with its external relations shall in accordance with Article 28 of the Constitution be exercised by or on the authority of the government). He asserts, as also do the defendants, the authority of the case of Crotty v An Taoiseach [1987] IR 713. There, the two last mentioned Articles were construed, per Walsh J. as follows:

  179. The combined effect of these two constitutional provisions clearly is that the Executive power of the State in connection with its external relations shall be exercised by or on the authority of the government but that in so exercising that power the government is subject to the provisions of the Constitution.

  180. The same learned judge held that the powers of the government in the international field “must be exercised in subordination to the applicable provisions of the Constitution” and that, therefore:

  181. It is not within the competence of the government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered to do so by the Constitution. They are both creatures of the Constitution and therefore are not empowered to act free from the restraints of the Constitution. To the judicial organ of government alone is given the power conclusively to decide if there has been a breach of constitutional restraints.

    [emphasis supplied]

  182. This, then, is the jurisdiction which the plaintiff calls on the Court to exercise. In a number of cases, notably T.D. v Minister for Education [2001] 4 IR 259 and Sinnott v Minister for Education [2001] 2 IR 545, this Court has unambiguously asserted the exclusive power of the Legislature and the Executive within their proper sphere and has declined to exercise any sort of general supervisory jurisdiction in those spheres. The limits of those spheres and of the powers and prerogatives of the Government and the Oireachtas derive from the Constitution. Those powers cannot be trespassed upon by any other entity, public, private or international; equally they cannot be surrendered, transferred or given away, even by the organs of government in which they are vested. That is so because those organs of government are “the guardians of these powers – not the disposers of them”, as it was put in Crotty.

  183. The plaintiff’s fundamental claim is that the Government (and subsequently the Oireachtas) propose to act inconsistently with the Constitution in divesting themselves of power which the Constitution gives to them and conferring that power instead, on the European Stability Mechanism, an international financial institution created by the Treaty mentioned above which will be based in Luxembourg and which is a permanent institution. Basically, Mr. Pringle charges, the Government in ratifying the Treaty establishing the ESM would be acting unlawfully and unconstitutionally in transferring power which is vested in it under the Constitution, in the exercise of which it is accountable to Dáil Eireann and ultimately to the people of Ireland, to an institution which exists outside the constitutional framework and which is responsible neither to Dáil Eireann nor to the people of Ireland. It is equally not responsible to the E.U. Institutions or the European Parliament.

  184. There was no issue, on the hearing of this appeal, and there is therefore no doubt, but that Mr. Pringle has standing to raise these issues.

  185. Mr. Pringle does not deny that the power in question might lawfully be transferred to the European Stability Mechanism. But he says that that cannot be done by the Government or by the Oireachtas alone; it requires a decision of the people i.e. a referendum. That is how the people exercise their right to decide in final appeal all questions of national policy, a right acknowledged in Article 6.1 of the Constitution.

  186. Structure of Judgment

  187. On the basis of the foregoing summary, it appears to me that the Court is required, first, to consider the nature of the constitutional constraints on the Government in ratifying a treaty such as that in question here, secondly to consider the ESM treaty with a view to determining and thirdly, whether adherence to it without the authority of the people in a referendum is consistent with the Constitution or not.

  188. Constitutional constraints

  189. On the hearing of this appeal both sides agreed that the nature of constitutional constraints or restraints on the Government, in the conduct of its external relations, were correctly stated in the majority judgments in Crotty v An Taoiseach [1987] IR 713 (from here on Crotty). It is, therefore, inescapable that we must shortly turn to this decision. It will be necessary first to see what that case related to.

  190. Before doing so, however, it is appropriate (by way of general caution) to recall the words of Kearns J. (as he then was) in Horgan v An Taoiseach [2003] 2 IR 468, when he spoke of the “strictly circumspect role which the Courts adopt when called upon to exercise jurisdiction in relation to the Executive’s conduct of international relations generally”. This echoes the words of Barrington J. in McGlinchey v Ireland [1988] IR 567 when he said “The conduct of the foreign policy of the State is not a matter which easily lends itself to judicial review, and if there is any area in which judicial restraint is appropriate, that is it”. Similar principles led the State to refuse relief in Boland v An Taoiseach [1971] IR 388, on the basis that was in issue there was simply a statement of policy which was quite outside the power of the Court to review.

  191. In Crotty, nevertheless, the plaintiff challenged the Government’s ratification of the Single European Act on the basis that such ratification infringed the provisions of the Constitution. He succeeded in this Court in a majority judgment, the majority consisting of Walsh, Henchy and Hederman JJ. Their judgments are pivotal in the present case.

  192. Henchy J. referred to Article 1 of the Constitution, where the Irish Nation affirms its “inalienable, indefeasible, and sovereign” right to .... determine its relations with other nations ....” and continued:

  193. It appears to me that this affirmation means that the State’s right to conduct its external relations is part of what is inalienable and indefeasible in what is described in Article 5 as a ‘sovereign independent, democratic State’. It follows, in my view, that any attempt by the government to make a binding commitment to alienate in whole or in part to other States the conduct of foreign relations would be inconsistent with the government’s duty to conduct those relations in accordance with the Constitution.

    Defining some terms

  194. The term “inalienable”, a word used several times in the Constitution, has a connotation of “incapable of being given away, transferred or sold”. The term is also found in Articles 41 and 42 of the Constitution in association with the word “imprescriptible” which has a connotation close to that of “indefeasible”, and indeed is rendered by the same word in the dominant, Irish language, version of the Constitution, dochloite.

  195. “Defeasible” according to the Oxford English Dictionary (1991) means “capable of being, or liable to be, defeated or made void”. Indefeasible, accordingly, means “not liable to be defeated, made void, or done away with; that cannot be forfeited”. (Ibid)

  196. The same edition of the Oxford English Dictionary (OED) defines the term “inalienable” as follows:

  197. Not alienable; that cannot be alienated or transferred from its present ownership or relation .... incapable of being alienated or transferred to another by law.

  198. This meaning seems quite consistent with the ordinary and natural meaning of the additional term used, “indefeasible”. In Ryan v Attorney General [1965] IR 294 Kenny J. said that:

  199. ‘inalienable’ means that which cannot be transferred or given away while ‘imprescriptible’ means that which cannot be lost by the passage of time or abandoned by non-exercise.

  200. The adjectives “inalienable” and “imprescriptible” are used in the Constitution to describe and define the rights referred to in Articles 41 and 42. The latter adjective is not used in Article 1, the near synonym “indefeasible” being preferred. It is of interest to note, however, that the OED defines “impresriptible” as follows:

  201. Not subject to prescription; that cannot in any circumstances be taken away or abandoned.

    [emphasis supplied]

    The Dictionary then goes on to give, by way of an example of the use of the term, a quotation from Tom Paines The Rights of Man as follows:

    The natural and imprescriptible rights of man .... are liberty, property, security and resistance of oppression.

    The word “sovereign” is both a noun and an adjective: in the latter use it donotes the qualities associated with the former. The principal definition of it by the Oxford English Dictionary is:

    One who has supremacy or rank above, or authority over, others .... frequently applied to the Deity in relation to all created things .... the supreme ruler of a people.

    The term “sovereignty” which refers to the state of being a sovereign or the defining characteristics of the sovereign, it is defined as the same source as referring to:

    The supreme controlling power in communities not under monarchical government.

    Irish language text.

  202. If one considers the wording of the Constitution in the dominant (Irish language) text, one finds the sense of “inalienable” in the Irish word “doshannta”. This word, like its English equivalent, appears in Article 41.1.1 and in Article 42.1 while the word “shannadh” is used in Articles 10.3 and 10.4 to express the notion of “transfer” or “alienation”. The word “do shannta” is composed of the negative prefix do – and the participle of shann. It is translated as “unassignable” in Ó Dónaill’s Dictionary. “Sannaim” is translated as “I assign” in Téarmaí Dlí, which is a compilation of statutory origin. The effect of the prefix “do – ” is like that of “in – ”in English as in the case of “indefeasible”, discussed above.

  203. The notion conveyed in English by the phrase “indefeasible” seems very precisely rendered by the Irish term “dochlorite” which means “invincible or conclusive”.

  204. It may be of significance to note that this very word is also used to express “inprescriptible” in Articles 41 and 42 and to express in Articles 25.4 and 25.5 the quality conveyed in English by the word “conclusive”. Accordingly these concepts may also be seen as present in the national “right” referred to in Article 1. It is indelible, inalienable, indefeasible, inprescriptible and conclusive as well as sovereign.

  205. The notion of sovereignty is conveyed in the Irish text by the word “ceannasach” which is defined in Ó Dónaill as “ruling, sovereign” and in Dineen as “having supreme power”.

  206. can detect no nuance of conflict or inconsistency in the connotation of the words used in the Irish, and in the English, texts respectively. The English words, or at least the first two, are unusual and perhaps now old fashioned. But they have a long history in a constitutional context: for example the American Declaration speaks of “unalienable” rights.

  207. Summary on the definition of terms.

  208. believe that in the formulation “inalienable, indefeasible and sovereign” and the Irish equivalent of those words, the Constitution deploys the very strongest words that are available in either language to indicate the absolute nature of the inherent and unrestricted right of the Irish nation to which they are applied, which includes the right “to determine its relations with other nations”. This is surely put beyond doubt by the fact that the word “sovereign”, accordingly to the OED, is “frequently applied to the Deity in relation to all created things”. A right so described is not simply one amongst a number of rights: it is the origin of other rights and exists at an entirely superior level.

  209. The words used in the Constitution in each of its languages are apt to connote a right which is permanent, incapable of being given away or transferred, or sold, or bargained away and incapable of being defeated or trumped by any process, including a process of law, and a right superior to, and untrammelled by, any other authority or any other right or prerogative vested elsewhere.

  210. Is voluntary abdication of such a right possible?

  211. In Crotty, Walsh J. asserted in some detail the fullness of the freedom of action given to the Government to decide on matters of foreign policy and continued:

  212. In my view, this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures and so to bind the State in its freedom of action in its foreign policy.

    He continued; in a passage relied on by both sides:–

    The freedom to formulate foreign policy is just as much a mark of sovereignty as the freedom to form economic policy and the freedom to legislate. The latter too have now been curtailed, by the consent of the people to the amendment of the Constitution which is contained in Article 29.4.3. If it is now desired to qualify, curtail or inhibit the existing sovereign power to formulate and pursue such foreign policies as from time to time to the government may seem proper, it is not within the power of the government itself to do so.

  213. The plaintiff says that, applying the standards expressed in the extracts above, the European Stability Mechanism clearly represents a transfer of a significant part of Ireland’s sovereignty to an extra-national (and extra-E.U.) authority. This contention is based on a detailed analysis of some of the provisions of the European Stability Mechanism Treaty, which will be considered below. On their competing analysis of the same material, the State defendants deny that it involves a transfer of sovereignty.

  214. It is therefore necessary at this stage to consider the nature of those aspects of the Single European Act which, in Crotty, were considered to be of such a nature that its ratification by Ireland required a referendum. It will also be necessary to distil if possible a single ratio from the three majority judgments in Crotty.

  215. The Single European Act

  216. The “Single European Act” or SEA refers to a number of Treaties of the 17th February, 1986 and the 28th February, 1986 whereby the then twelve Member States of the European Union amended and considerably expanded the scope of the Treaties governing the European communities. Title III of the SEA embodied a separate treaty whereby each of the members agreed to adapt its foreign policy positions to those of the others and “to refrain from impeding” a consensus and joint action within a structured framework known as European Political Cooperation. Title II embodied structural changes in the Treaties and provided for the increased use of voting by qualified majority (as opposed to the former practice of requiring unanimity); the listing of detailed objectives of the European Economic Community and other matters.

  217. At p.781 of the Report, Walsh J. set out various relevant aspects of the Single European Act including the obligation to attempt to formulate a European Foreign Policy; to undertake to inform or consult the other Member States on foreign policy matters; to take full account of the position of other Member States in such matters and to ensure that “common principles and objectives” are generally developed and defined.

    In light of these matters Walsh J. said:

  218. If it is now desired to qualify, curtail or inhibit the existing sovereign power .... it is not within the power of the government itself to do so. The foreign policy organ of the State cannot, within the terms of the Constitution, agree to impose upon itself, the State or upon the people the contemplated restrictions upon freedom of action. To acquire the power to do so would, in my opinion, require a recourse to the people ....

    [emphasis supplied]

    Henchy J., equally, set out the terms of s.2 of Article 30 of the Single European Act, at p.785 of the Report. He then observed:

    .... it is clear from those provisions that once the Member States ratify this treaty each State’s foreign policy will move from a national to a European or Community level. Apart from becoming bound to endeavour jointly to formulate and implement a European foreign policy, each Member State will become specifically bound to inform and consult its fellow members, to refrain from deciding on a final position as to an issue of foreign policy without prior consultations, and to take full account of the positions of the other partners in adopting its position ....

    [emphasis in original]

    He continued:

    Those and other commitments expressed in Article 30 make manifest that, although the approach to the ultimate aim of European Union is to be reached by a pathway of gradualism, each Member State will immediately cede a portion of its sovereignty and freedom of action in matters of foreign policy .... a purely national approach to foreign policy is incompatible with accession to this treaty.

    [emphasis supplied]

  219. It will be noted that the obligations undertaken in the 1986 Treaties as set out, for example, by Mr. Justice Henchy, were largely preparatory, procedural and/or aspirational, and were expressed at a level at one remove from definite complete or binding action (“to inform and consult each others .... to ensure .... the convergence of their positions .... to have ‘consultations’ before adopting a final position and to ‘take full account of the positions of the other partners’)”. The plaintiff says that the obligations undertaken in the ESM are much more immediate and specific and, in particular, that they include a commitment to making specific payments within a fixed time, and to obey certain decisions, over which Ireland will not have any sort of veto and about which Ireland may not have a right to be consulted at all in certain circumstances. Therefore, he says, his position is stronger than that of the successful plaintiff in Crotty because the transfer of sovereignty is much more immediate, specific and sharply defined, and less aspirational, procedural or preliminary.

  220. Basis of Crotty

  221. The plaintiff relies on a passage in the judgment of Walsh J. at p.777 of the Report, as follows:

  222. It is the government alone which negotiates or makes treaties and is the sole organ of the State in the field of international affairs. For these functions it does not require as a basis for their exercise an Act of the Oireachtas. Nevertheless the powers must be exercised in subordination to the applicable provisions of the Constitution.

  223. The defendants take no issue with that statement.

  224. Common Aspects of the majority judgments: deriving a ratio

  225. It is convenient to deal first with the brief but very significant concurring judgment of Hederman J. at p.794 of the Report. Hederman J. first expressed agreement with the judgments of Walsh and Henchy JJ, thereby creating the majority. He went on to state the “essential point at issue” as follows:

  226. Whether the State can by any act on the part of its various organs of government enter into binding agreements with other States, or groups of States, to subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interests of other States, as distinct from electing from time to time to pursue its own particular policies in union or in concert with other States in their pursuit of their own similar or even identical policies.

    Hederman J. answered this question by holding that:

    The State’s organs cannot contract to exercise in a particular procedure their policy making roles or in any way to fetter powers bestowed unfettered by the Constitution. They are the guardians of these powers – not the disposers of them.

  227. From these passages two things emerge which appear to me to be echoed in the other majority judgments. First of all, what was under consideration in Crotty was not a binding agreement to take a particular course of action, but simply a binding agreement to submit the exercise of the Government’s powers “to the advice or interests” of other States. Secondly, the essence of Hederman J.’s approach is perhaps found in the statement that the State “cannot .... fetter powers [which are] bestowed unfettered by the Constitution”. This, in turn, leads to Hederman J.’s distinction between agreeing “to subordinate, or to submit, the exercise of [Irish governmental] powers to the advice or interests of other States”, which is impermissible, in contrast to “electing from time to time to pursue [Ireland’s] own particular policies in union or in concert with other States ....”, which is permissible under the Constitution.

  228. It is these aspects of Crotty that render necessary the close analysis of Articles 1, 5 and 6 of the Constitution conducted earlier in this judgment, in order to establish the nature and scope of the right there recognised to inhere in our State, and thus to establish whether or not this right has been “fettered” by the ESM Treaty.

  229. From the judgment of Henchy J. it emerges that he also saw the terms of the Single European Act as involving an obligation to consult, to co-ordinate, to seek to converge with, the policies of other countries and to keep those other countries informed, and to “endeavour to” avoid action which would impair cohesiveness as between the other States, as opposed to an obligation actually to do a particular thing or things in the positive conduct of foreign policy in a specific instance.

  230. Henchy J., at p. 787, grounded himself on Article 6.1 of the Constitution, cited earlier in this judgment, and found, first, that the “common good, referred to in that Article is the common good of the Irish people”. (Emphasis supplied)

  231. This, to my mind, is an essential feature of Crotty, and it is “the ultimate standard by which the constitutional validity of the conduct of foreign affairs by the government is to be judged”. This is inconsistent with a commitment to act in the interest of or, in a manner decided by some other nation, or some group of Nations.

  232. He then held that, in sharp contrast to the “purely national” approach of the Constitution, by reason of the Single European Act:

  233. .... each ratifying Member State would be bound to surrender part of its sovereignty in the conduct of foreign relations. That is to happen as part of a process designed to formulate and implement a European foreign policy. The freedom of action of each State is to be curtailed in the interests of the common good of the Member States as a whole.

    [emphasis added]

    Henchy J. continued:

    Thus, for example, in regard to Ireland, while under the Constitution the point of reference for the determination of a final position on any issue of foreign relations is the common good of the Irish people, under Title III [of the Single European Act] the point of reference is required to be the common position determined by Member States. It is to be said that such a common position cannot be reached without Ireland’s consent, but Title III is not framed in a manner which would allow Ireland to refuse to reach a common position on the ground of its obligations under the Irish Constitution.

    [emphasis added]

  234. This, I believe, is a profoundly important passage. The analysis based on an altered “point of reference” is extremely suggestive. The last passage quoted is also a reminder that, while the Single European Act bound Ireland to adopt as its “point of reference” the common position determined by Member States, nevertheless, (under Title III) that common position could not (then) be arrived at without Ireland’s consent. But when we come to examine the European Stability Mechanism it will be seen that, at least in one important respect, an effective position amongst the members of the Stability Mechanism can indeed be arrived at without any regard to Ireland’s position. To that extent, the position in the present case, by comparison with that in under the SEA, is a fortiori.

  235. Henchy J. continued, in another important passage:

  236. There is no provision in the Treaty for a derogation by Ireland where its constitutional obligations so require. On the contrary, Title III expressly provides: ‘in adopting its positions and its national measures .... each high contracting party shall take full account of the positions of the other partners and shall give due consideration to the desirability of adopting and implementing common European positions’. Thus, if the other Member States were to take up a common position on an issue of external relations, Ireland, in adopting its own position and in its national measures, would be bound by Title III to ‘take full account’ of the common position of the other Member States. To be bound by a solemn international Treaty to act thus is, in my opinion, inconsistent with the obligations of the government to conduct its foreign relations according to the common good of the Irish people. In this and other respects, Title III amounts to a diminution of Ireland’s sovereignty, which is declared in an unqualified terms in the Irish Constitution.

    [emphasis supplied]

  237. This last passage appears to me entirely consistent with the citations given above from the judgment of Hederman J. in Crotty and to be strongly suggestive, therefore, of a ratio for the case as a whole.

  238. The judgment of Walsh J. is often regarded by commentators as the principal judgment in the majority. It must be first pointed out that, at p.781 of the Report, Walsh J. adopted an insight of Finlay C.J., (who, together with Griffin J. composed the minority on the Title III issue):

  239. .... the essential nature of sovereignty is the right to say yes or no.

  240. This pithy phrase, originated by Finlay C.J., is to my mind wholly consistent with and illustrative of Hederman J.’s finding that:

  241. The State’s organs cannot .... in any way .... fetter powers bestowed unfettered by the Constitution.

  242. Turning to Article 29.4 of the Constitution, in relation to foreign policy, Walsh J. held at p.782:

  243. In my view it would be quite incompatible with the freedom of action conferred on the government by the Constitution for the government to qualify that freedom or to inhibit it in any manner by formal agreement with other States [so] as to qualify it.

    And, at p.783:

    Equally clearly [the framers of the Constitution] refrained from granting to the government the power to bind the State by agreement with such groups of nations as to the manner, or under what conditions, that executive function of the State would be exercised.

  244. Referring again to the freedom of action in relation to foreign affairs conferred on the Government by the Constitution, Walsh J. said on the same page:

  245. In my view this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures, and so to bind the State in its freedom of action in its foreign policy.

  246. Neither Walsh J. nor the other members of the majority held that the State could not, in any way at all, agree to limit its freedom of action in foreign policy. But Walsh J. said:

  247. If it is now desired to qualify, curtail or inhibit the existing sovereign power to formulate and to pursue such foreign policies as from time to time to the government may seem proper it is not within the power of the government itself to do so. The foreign policy organ of the State cannot, within the terms of the Constitution, agree to impose upon itself, the State, or upon the people the contemplated restrictions upon freedom of action. To acquire the power to do so would in my opinion require a recourse to the people ‘whose right it is’ in the words of Article 6 ‘.... in final appeal to decide all questions of national policy, according to the requirements of the common good’.

    [emphasis supplied]

    An example

  248. Thus, (to take an example removed from the specific context of the ESM), consider the position that would arise if a new State emerges, or were in the process of emerging, perhaps after the break up of an existing State as in the recent case of Ethiopia. The decision on whether Ireland should recognise, or withhold recognition from, the new polity is obviously within the prerogative of the Irish government. It falls within the Nations “inalienable, indefeasible and sovereign right .... to determine its relations with other nations” in Article 1 of the Constitution. It is, of course, legitimate for the Government to consult with other countries, and with any international organisation it may choose, before making its sovereign decision to grant or to withhold recognition. That is a matter for the Government. But, on the authority of Crotty, it would not be consistent with the Constitution for Ireland to agree not to recognise any new State save with permission or agreement of some other country, countries, or organisations. Equally, it would not be possible, consistently with the Constitution, for Ireland to agree to recognise new States only if some percentage of some group of nations also decided to recognise it, or to agree to be bound to recognise a new State if some particular State, or 80% or 85% of a group of States, decided to give recognition. Nor would it be possible for the government to agree not to recognise a new State except after consultation with other States and after “taking full account” of their views.

  249. This is so because to enter into any agreements of the kind described would be “to enter into binding agreements with other States to exercise [Irelands sovereign] power in a particular way or to refrain from exercising it save by particular procedures” as Walsh J. put it in a passage already quoted. More fundamentally, it would be to change Ireland’s “point of reference” for the determining of a question of relations with other States from the interest of the Irish people to a new point of reference, viz, the interests or the declared positions of some other State or States, (to adopt the language of Henchy J. also quoted above).

  250. There is always a risk of distortion in adopting a single phrase, or series of phrases, to epitomise the ratio of a multi-judgement decision of the Court. Nevertheless, having considered the judgments in Crotty as a whole I believe that the phrase I have quoted more than once from the judgment of Hederman J. is a fair epitome of the ratio of Crotty. This is:

  251. The State’s organs cannot contract to exercise in a particular procedure their policy making roles or in any way to fetter powers bestowed unfettered by the Constitution. They are the guardians of these powers – not the disposers of them.

  252. I wish also respectfully to express my agreement, though it is in some respects a statement of the obvious, with the insight of Finlay C.J. and of Walsh J. that “the essential nature of sovereignty is the right to say yes or to say no”. Obvious it may be, but it is a precise and memorable statement of an essential quality of constitutional sovereignty, which is asserted in the Constitution, and which may otherwise be liable to erosion by the pressure of events, or by unreasoning enthusiasm for novelties, or by a desire please others from whom some advantages is expected or at least hoped for.

  253. Summary on Constitutional Constraints

  254. The right “to determine its relations with other nations” is expressed to be a part of the “inalienable, indefeasible and sovereign right” attaching to the State by virtue of its nature and affirmed in Article 1 of the Constitution.

  255. Moreover, the Nation in which this right exists is, by Article 5, “a sovereign independent democratic State” [emphasis added].

  256. By Article 29.4, the Executive power of the State “in or in connection with its external relations” is to be exercised by or on the authority of the Government.

  257. The power of the people of Ireland “.... in final appeal to decide all questions of national policy ....” is to be exercised “according to the requirements of the common good”. (Article 6)

  258. Henchy J. in Crotty at p.787 found that “the common good, referred to in that Article, is the common good of the Irish people”. This is “the ultimate standard by which the constitutional validity of the conduct of foreign affairs by the Government is to be judged”. (ibid)

  259. Accordingly, the Executive power of the State in connection with its external relations is to be exercised by or on the authority of the Government but “in so exercising that power the Government is subject to the provisions of the Constitution” and “.... to the judicial organ of government alone is given the power conclusively to decide if there has been a breach of constitutional restraints”. (per Walsh J.)

  260. It therefore appears to me that the fundamental approach mandated by the Constitution in relation to the external relations of the State is what Henchy J. called “a purely national approach to foreign policy” and the “point of reference” for the determination of the final position on any issue of foreign relations is the common good of the Irish people”. (Ibid. at 787)

  261. In Crotty it was held, speaking of the restrictions of the Irish Government’s freedom of action contained in the Single European Act:

  262. The foreign policy organ of the State cannot, within the terms of the Constitution, agree to impose upon itself, [upon] the State or upon the people the contemplated restrictions upon freedom of action.

    Walsh J. continued:

    To acquire the power to do so would in my opinion require a recourse to the people ....

    This is because:

    .... it would be quite incompatible with the freedom of action conferred on the Government by the Constitution for the Government to qualify that freedom or to inhibit it in any manner by formal agreement with other States [so] as to qualify it.

    This in turn is because:

    .... clearly [the framers of the Constitution] refrained from granting to the Government the power to bind the State by agreement with such groups of nations as to the manner, or under what conditions, that Executive function of the State would be exercised.

    Accordingly, in the words of Hederman J., the organs of the State who enjoy the various individual power set out in the Constitution, such as the Oireachtas and the Government, “.... are the guardians of these powers – not the disposers of them”. (ibid 794)

    Other Constitutional Provisions

  263. The foregoing summary focuses on the Executive power of the State in relation to the Nation’s external relations. This, of course, is only one amongst many powers of the Executive branch of government. The exercise of Executive power generally is subject to the restrictions, or checks and balances, on the exercise of Executive power, notably in relation to the exercise of that power in a manner which is accountable to the Dáil and, through it, to the people. The Constitution therefore lays down democratic processes and procedures for the exercise of that power.

  264. The plaintiff relies on certain of these provisions and says, broadly, that the European Stability Mechanism would interfere with the established Irish governmental and parliamentary procedures, mandated by the Constitution, and designed to ensure accountability to the Irish people as opposed, for example, to a financial institution based in Luxembourg.

  265. In this connection it is relevant to recall the provisions of Article 11 of the Constitution which provide as follows:

  266. All revenues of the State from whatever source arising shall, subject to such exception as may be provided by law, form one fund, and shall be appropriated for the purposes and in the manner and subject to the charges an liabilities determined and imposed by law.

  267. In particular, the plaintiff relies on Article 17 of the Constitution which provides:

  268. Article 17.1.1

    As soon as possible after the presentation to Dáil Eireann under Article 28 of this Constitution of the Estimates of Receipts and the Estimates of Expenditure of the State for any financial year, Dáil Eireann shall consider such Estimates.

    Save insofar as may be provided by specific enactment in each case, the legislation required to give effect to the Financial Resolutions of each year shall be enacted within that year.

    Article 17.2

    Dáil Eireann shall not pass any vote or resolution, and no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Eireann by a message from the Government signed by the Taoiseach.

  269. The plaintiff also refers to Article 28.4 of the Constitution and in particular on the following provisions:

  270. Article 28.4.1

    The government shall be responsible to Dáil Eireann.

    The government shall meet and act as a collective authority and shall be collectively responsible for the Departments of State administered by the members of the Government.

    ....

     

    The government shall prepare Estimates of the Receipts and Estimates of the Expenditure of the State for each financial year and shall present them to Dáil Eireann for consideration.

    Article 28.12 provides:

    The following matters shall be regulated in accordance with law, namely, the organisation of, and distribution of business amongst, departments of State, the designation of member of the government to be the Ministers in charge of the said departments ....

  271. I interpret Article 6 of the Constitution as requiring that the Ministers, in discharging the responsibilities they have been given by the Constitution and by the law, are exercising the powers of government acknowledged by Article 6 and are, accordingly, required to exercise them “according to the requirements of the common good”. Following the passage already quoted in this judgment from Henchy J., I consider the “common good” referred to be the common good of the people of Ireland.

  272. The plaintiff likewise relies on Article 29.4.4 which affirms Ireland’s commitment to the European Union within which the Member States work together to promote peace shared values and the well being of their people, and Article 29.4.5, which authorised the State to ratify the Treaty of Lisbon of 13 December, 2007.

  273. The plaintiff also relies on what one might call a negative way on Article 29.4.6 which provides that:

  274. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State, before, on or after the entry into force of the Treaty of Lisbon, that are necessitated by the obligations of membership of the European Union referred to in subsection 5 of this Section or of the European Atomic Energy Community or prevent laws enacted, acts done or measures adopted by –

    (i)

    The said European Union or the European Atomic Energy Community or institutions thereof,

    (ii)

    The European Communities or European Union existing immediately before the entry into force of the Treaty of Lisbon, or institutions thereof, or

    (iii)

    Bodies competent under the Treaties referred to in this section from having the force of law in the State.

  275. The negative points made by the plaintiff arising from this last constitutional provision are, firstly, the obvious point that the Treaty in question here is not necessitated by the obligations of membership of the European Union and is therefore not protected by Article 29.4.6. This much is agreed by the State. The Treaty is, therefore, in the plaintiff’s submission established outside the legal order of Ireland and outside the legal order of the European Union. The plaintiff strongly contends that these facts render the defendants’ repeated contention that the world has changed a great deal since Crotty was decided “a generation ago” simply irrelevant. In particular, the plaintiff alleges, the constitutional changes which have trenched upon Ireland’s sovereignty in the context of European Union measures are wholly irrelevant to the standing in Irish law of the present Treaty, because of that Treaty’s existence outside the Irish and European legal orders. The fact that the Treaty confers a certain status on organs of the E.U. for example on determining when the ESM shall use “an emergency voting procedure”, does not in any way detract from the nature of the ESM as an extra-E.U. body. I did not understand the State to argue the contrary.

  276. Finally, the plaintiff relies on Article 29.6 of the Constitution which requires that no international agreement shall be a part of the domestic law of the State save as may be determined by the Oireachtas.

  277. It is of course true that Article 29 of the Constitution has been amended on a number of occasions to provide constitutional immunity for measures “necessitated” by the State’s membership of what is now the European Union, and in relation to certain more specific European Union Instruments. This is acknowledged in a passage from the judgment of Walsh J., quoted above. But these exempting provisions, suggestive in themselves of a felt necessity to amend the Constitution, by referendum, are specific in their scope and do not extend to what the State describes in its written submissions as the “residual sovereignty”, unaffected by the amendments in question, for example measures not “necessitated” by membership of the E.U.

  278. Point of divergence

  279. Since I have the misfortune to differ from my colleagues in this case, it seems appropriate to indicate with some precision the precise nature of the divergence.

  280. As mentioned above, and mentioned also in the judgments of my colleagues (see, for example, the judgment of the Chief Justice at paragraphs [56] and [57]) the authority of the case of Crotty v An Taoiseach [1987] IR 713 has not been doubted or challenged by either side in this case. On the contrary each side urged that that case, properly understood, would lead to a resolution of the present litigation in its favour. Accordingly, the precise meaning of Crotty and the correct identification of the ratio of that case lies at the heart of the present judgment, and of the divergence of it with those of my colleagues.

  281. At p.7 of his judgment in this case, Mr. Justice O’Donnell declares:

  282. In the words ‘abdicate’, ‘alienate’, ‘subordinate’ and indeed also ‘transfer’ is to be found in my view, the essence of what was considered impermissible in Crotty.

  283. This seems to me quite consistent with what is said by Mr. Justice Clarke. At p.26 of his judgment, quoting from Walsh J., he identified the substance of the limitation on the Executive power in the relevant area to be one which did not permit the government “to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way ....” Similarly, he cites Henchy J. for the proposition that government is not permitted “to alienate in whole or part to other States the conduct of foreign relations” nor to “subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interests of other States”.

  284. Even viewing the phrases quoted above as being exhaustively descriptive of the limitations on Executive power in connection with external relations, I would consider, for the reasons given elsewhere in this judgment, that adherence to the present Treaty would trespass on those limitations. But I do not consider that those limitations are exhaustively stated in the passages quoted. In the first place, I consider that, to adopt the words of Henchy J. in Crotty “.... a purely national approach to foreign policy is incompatible with accession to this Treaty”. To similar effect is the statement of that learned judge that:

  285. .... in regard to Ireland, while under the Constitution the point of reference for the determination of a final position on any issue of foreign relations is the common good of the Irish people, under [the Treaty] the point of reference is required to be the common position determined by the Member States.

  286. What Henchy J. said there about the Single European Act and the Treaty whereby Ireland came bound by it seems to me manifestly to be true of the European Stability Mechanism which requires Ireland to contribute to a fund to be expended in the interest of the Euro area and its members. I am far from saying that this is a lower, or less worthy, criterion than that of the common good of the Irish people: I am merely saying that it is different from that other criterion.

  287. do not consider that the essence of what is impermissible by virtue of the Crotty is comprehensibly epitomised in the word of “abdicate” or the other words cited by O’Donnell J. These words, it appears to me, are firstly not exhaustive of what is impermissible under the Crotty regime; they are also somewhat vague and open to interpretation. Thus, the word “abdicate” is classically used of a Monarch resigning his crown, and its other usages are by analogy from that. The judgments in Crotty certainly preclude abdication but also precludes more specific acts such as “to make a binding commitment to alienate in whole or in part to other States the conduct of foreign relations”. More, and very significantly “to enter into binding agreements with other States to exercise that power in a particular way, or to refrain from exercising it save by particular procedures ....”

  288. It appears to me, with great respect, to be beyond argument that in the ESM Treaty the State has agreed to exercise its power, which is of its nature sovereign and unfettered, in relation to making financial advances to other countries from the sum authorised in the 2012 Act, in compliance with the rules of the European Stability Mechanism. That, manifestly, appears to me to be a binding commitment to exercise that power “in a particular way”.

  289. This interest may very well be a worthy one but it is manifestly not identical to the “purely national approach” which is mandated in the Constitution. Whether the change is worth making or not is a political question on which I abstain from comment, but if it is to be made it must in my opinion be made by the people.

  290. Equally, it appears to me that the prohibitions contained in Crotty extend not merely to substantive decisions (such as whether or not to advance money from a particular fund, alone or in conjunction with others, to a particular country) but to the procedures whereby such a decision can be taken. To quote a passage of Hederman J. which is fully set out above, “The State’s organs cannot contract to exercise in a particular procedure their policy making roles or in any way to fetter powers bestowed unfettered by the Constitution”.

  291. It appears to me to be clear to demonstration that the provisions of the ESM Treaty which are set out in this judgment do just what is prohibited there; they bind the State “to exercise in a particular procedure” their power to decide, for example, whether or not to advance a particular sum of money to a particular State, alone or in conjunction with others. Those “particular procedures” are those laid down in the Treaty. The “procedures” lay down the constitution and the nature of the body which is to take those decisions, at least with regard to the €11.2 billion fund authorised by the Act of 2012, the nature of the majority of the Member States of that body necessary to take such a decision, and even the circumstances in which Ireland will lose its right to participate in the voting procedures, while still being bound by its financial obligations.

  292. Certain of my colleagues have referred to the State’s adherence to other international bodies, such as the United Nations. This is by way of suggestion that, if adherence to this Treaty requires a vote of the people, adherence to those other Treaties or organisations might, or even must, do so as well. I believe this form of argumentation is inadmissible. No-one has challenged the State’s action in assuming the obligations of a member of the United Nations or any other such body. If such a challenge were made it would no doubt be met by the organs of the State with arguments appropriate to the particular Treaty or organisation in question. It is not prudent, proper or even logical to assume that those arguments would replicate those deployed in the present case.

  293. Finally, I wish to emphasise that the right of the people (as opposed, for example, to the Government, the Oireachtas, or the European Union) in final appeal to decide all questions of national policy is enshrined in the Constitution and must be respected and upheld by the Courts.

  294. That right can of course be changed, qualified, or even abolished by the procedures laid down in the Constitution, but it is the people, and not the Government or the bureaucracy or the European Union who must do this. I would regard an interpretation of Crotty which undermines this basic principle as emptying that great case of meaning.

  295. Areas of agreement

  296. There were certain areas of agreement between the parties which removed certain issues from the field of debate in this case. It has already been noted that the State conceded that Mr. Pringle had locus standi to raise the points which he did in fact raise.

  297. It was also agreed that the ratification by the State of the ESM Treaty is not something which is “necessitated” by the obligations of membership of the European Union. Accordingly, the State was unable to rely on Article 29.4.6 of the Constitution which provides an immunity from constitutional challenge to measures “necessitated” by that membership. On the contrary, the European Stability Mechanism is a proposed new financial institution, whose headquarters happen to be in Luxembourg and which is established by agreement of some members, but by no means all members, of the European Union. Membership of it, from the point of view of domestic and European law, is voluntary and is not in any way required by membership of the European Union or by Irish or European law.

  298. The next area of agreement which requires to be noted is a very significant one indeed. The State did not contend that the Government or indeed the Oireachtas was immune from judicial control in the conduct of the State’s external relations. Indeed, on the hearing of this appeal the State specifically conceded that both are liable to judicial control in that area, based on the authority of Crotty v Ireland. The Court was not invited by either party to depart from that precedent but on the contrary we were invited by both sides to apply it to the facts of this case, insofar it is relevant to them.

  299. The foregoing are important matters which require to be borne in mind throughout the discussion which follows. In the course of the argument on the hearing of this appeal certain other areas of agreement on specific points arose, which however are more comprehensible if discussed in the particular context in which they arose. There is however one area of mixed agreement and disagreement which it is convenient to set out and resolve now.

  300. Permanence of the Treaty Provisions

  301. It was agreed between the parties that there is no provision in the ESM Treaty to bring its provisions to an end, and no provision in the Treaty permitting a party to withdraw from the Treaty.

  302. It is also agreed that Article 56(1) of the Vienna Convention on the Law of Treaties applies a presumption against a capacity to withdraw from a Treaty where there is no specific provision providing for “denunciation” or withdrawal.

  303. The State, however, contends that, because all of the parties to the Treaty are members of the European Union, and because the ESM Treaty is “separate from but closely interlinked with the E.U. Treaties”, and because any Member State may withdraw from the European Union, that there is an implied power to withdraw or, as the State’s written submissions put it “its nature must be regarded as allowing for withdrawal”. This is on the basis either that the parties to the Treaty intended to admit the possibility of withdrawal or a right of denunciation or that withdrawal may be implied by the nature of the Treaty.

  304. In my view these submissions are wholly lacking in logical force and are without legal merit.

  305. The ESM Treaty is not, despite what is said at para. 73 of the State’s submissions “an international Treaty that has emerged from the participation of the Member States in the E.U. Treaties”. If it were so, then in my view that would imply that all members of the European Union were party to the present Treaty, but they are not. It would be true to say that the Treaty arises from the participation of some member States in the Euro currency. But this is a wholly different thing: it is not required by membership of the European Union nor does membership of the European Union imply that a Member State will necessarily, or ever, at any stage, adopt the Euro. The present Treaty, indeed, arises directly from the notorious crisis which has afflicted that troubled currency. Throughout, the States submissions were marked by attempts subliminally to assimilate the E.U. Treaty to an E.U. document. Those efforts cannot succeed, because it is not a European Union measure.

  306. The State’s submissions do not in any way seek to address the question of why, if there is a power to withdraw from the Treaty after it has been ratified, that power is not made express in the Treaty itself. In this regard the position is in sharp contrast to the express power to withdraw from the European Union: see Article 50 TEU.

  307. I believe that logic and prudence alike require one to proceed on the basis that the Treaty, once ratified, will not permit the withdrawal of a State from the obligations set out in the Treaty. This is wholly consistent with the wording of the ESM Treaty itself. In Article 8(4) the States which are party to it “irrevocably” and “unconditionally” undertake to make their capital contributions. This language is of course radically inconsistent with a power to withdraw, just as “irrevocably” is inconsistent with “revocably”.

  308. Finally on this topic, it is to be noted that the long title of the European Stability Mechanism Act 2012 recites inter alia that the Act is too:

  309. (A)

    TO MAKE PERMANENT PROVISION TO PROVIDE FOR MATTERS RELATING TO THE PARTICIPATION BY THE STATE IN THE EUROPEAN STABILITY MECHANISM PURSUANT TO THE TREATY ESTABLISHINGTHE EUROPEAN STABILITY MECHANISM DONE AT BRUSSELS ON 2 FEBRUARY 2012 BETWEEN THE EURO AREA MEMBER STATES.

  310. I do not believe that, once in this mechanism, Ireland will be able by its own act to leave it or to terminate its obligations under the Treaty once it has taken them on.

  311. The European Stability Mechanism

  312. Some members of the European Union, those who are also members of the Euro area, but not the others, agreed, on the 11th July, 2011, a Treaty establishing the European Stability Mechanism. The Treaty establishes what is described as a new “international financial institution” called the European Stability Mechanism, to be based in the Grand Duchy of Luxembourg.

  313. By Article 3 of the Treaty the purpose of the ESM is to “mobilise” (i.e. raise from the taxpayers of each member country under compulsory process and transfer out of the national jurisdiction to the new financial institution) funding to be used to provide support to members of the Eurozone in financial difficulty. It contemplates that this support will be provided only where such support is “indispensable to safeguard the financial stability of the Euro area as a whole and of its Member States”.

  314. Thus, (to borrow the language of Henchy J.) the “point of reference” for the provision of support in the financial stability of the Euro area as a whole and its Member States, as opposed to the common good of the Irish people. This change may be worth making – that is a political matterbut change it self evidently is, either from the “purely national” approach, envisaged by the Constitution, or from an E.U. “point of reference”, envisaged in the SEA and other Treaties. The ESM is a tertium quid, so far uncontemplated in the Irish Constitution or the original European Treaties.

  315. The European Stability Mechanism Treaty is a treaty, then, outside the structures of the Irish Constitution and also outside the structures of the European Union. It is to operate in the interests of the financial stability, not of Ireland, or of the European Union, but of the Euro area and its Member States, as determined or certified by powers external to Ireland: see below. Of course these interests may, or they may not, overlap in any particular case. There is, for example, no provision requiring equality of treatment amongst different support-receiving States. Thus Ireland or some other state might find itself in the odd position of funding support to another ESM country on terms less onerous than on which the funding country itself had had to accept support.

  316. According to the defendants, the Treaty originated in discussions amongst Euro Area Member States following the establishment of the Greek loan facility and the European Financial Stability facility in 2010.

  317. According to the learned High Court judge (Laffoy J.) the ESM has two interrelated functions:

    1. To mobilise funding and

    2. To enter into agreements to provide funding and stability support to ESM members experiencing or threatened by severe financing problems. Such support may be given only where it is “indispensable to safeguard the financial stability of the Euro area as a whole or of its Member States”.

    Operation of the ESM

  318. The ESM operates by using a capital stock comprising “paid-in contributions” of ESM members to support its borrowing and lending operations. The authorised capital stock is fixed by the Treaty at €700 billion. The initial paid-in capital is to be €80 billion. The subscription of each ESM member to capital stock is set out at Annex II of the Treaty and is calculated in accordance with a “contribution key” set out in Article 11 and Annex I of the European Stability Mechanism Treaty.

  319. reland’s “contribution key” is 1.5922%. To give an idea of scale, that of Germany is 27.1464%, and that of France is 20.3859%. Spain and Italy also have contribution keys above 10%. These four States, between them, account for 77.3497% of the total. The four smallest states, by contrast, account in aggregate for only 0.8849%. If Ireland’s contribution key were added to those of this group the aggregate would be 2.4771%.

  320. Ireland’s subscription to the authorised capital stock mentioned, above is the sum of €11.1454 billion. Ireland would have a share holding in the ESM in proportion to that, 111,454 shares, compared with 1,900,248 shares in the case of Germany, 1,427,013 shares in the case of France, 1,253,959 in the case of Italy and 833,259 in the case of Spain. The entire schedule of contribution keys and of shareholdings and subscriptions is set out in the Annexes to the Treaty.

  321. Working of the ESM

  322. The necessity for mentioning these figures arises from the provisions of Article 4(2) of the Treaty which provides:

  323. The decisions of the Board of Governors and the Board of Directors shall be taken by mutual agreement, qualified majority or simple majority as specified in this Treaty. In respect of all decisions a quorum of 2/3rds of the members with voting rights representing at least 2/3rds of the voting rights must be present.

  324. One might wonder why a member whose vital interests might be affected by a decision of the ESM might not always be present and ready to exercise its vote. But this situation might arise by reason of the terms of Article 4(8) of the Treaty:

  325. If any ESM member fails to pay any part of the amount due in respect of its obligations in relation to paid-in shares or calls of capital under Articles 8, 9 and 10, or in relation to the reimbursement of financial assistance under Article 16 or 17, such ESM member shall be unable, for so long as such failure continues, to exercise any of its voting rights. The voting thresholds shall be recalculated accordingly.

    [emphasis added]

  326. Thus, failure to pay one’s subscriptions or additional subscriptions (which might arise in the way set out below), or total or partial failure to repay assistance received from the mechanism, at the times agreed will result in the automatic loss of voting rights. One or other of these events does not seem entirely improbable in certain cases.

  327. Article 4(3) provides that;

  328. The adoption of a decision by mutual agreement requires the unanimity of the members participating in the vote. Abstentions do not prevent the adoption of a decision by mutual agreement.

  329. It will be seen, therefore, that if a member looses its ability to “participate in the vote”, under Article 4(8), its consent is not necessary to a decision requiring unanimity either. The requirement of mutual agreement is further limited by Article 4(4) which provides as follows:

  330. By way of derogation from paragraph (3), an emergency voting procedure shall be used where the Commission and the ECB both conclude that a failure to urgently adopt a decision to grant or implement financial assistance .... would threaten the economic and financial sustainability of the Euro area. The adoption of a decision by mutual agreement by the Board of Governors .... and the Board of Directors under that emergency procedure requires a qualified majority of 85% of the votes cast.

    By Article 4(5) is provided that:

    The adoption of a decision by qualified majority requires 80% of the votes cast.

  331. The following paragraph provides that “the adoption of a decision by simple majority requires a majority of the votes cast”.

  332. Portion of the reality underlying these provisions is illustrated by the provisions for the coming into effect of the Treaty. It will come into effect when ratified by the holders of 90% of the paid up shareholding in the ESM. See Article 48 of the Treaty. This means, in practice, that it will come into effect if and when ratified by Germany and will not come into effect at all unless ratified by Germany.

  333. Chapter 2 of the Treaty deals with the “governance” of the Stability Mechanism. It provides for a Board of Governors, a Board of Directors, a Managing Director and other dedicated staff. By Article 5(1) the Governor nominated by each member must be the Finance Minister. Further, the ESM is given immunity from regulation and its officials are given diplomatic-type immunities.

  334. Funding

  335. Article 41(1):

  336. .... payment of paid-in shares of the amount initially subscribed by each ESM member shall be made in five annual instalments of 20% each of the total amount. The first instalment shall be paid by each ESM member within fifteen days of the date of entry into force of this Treaty. The remaining four instalments shall each be paid on the 1st, 2nd , 3rd and 4th anniversary on the payment date of the first instalment.

    Article 41(2) however provides:

    During the five year period of capital payment by instalments, ESM members shall accelerate the payment of paid-in shares, in a timely manner prior to the issuing State, in order to maintain a minimum 15% ratio between paid-in capital and the outstanding capital of ESM issuances and guarantee a minimum combined lending capacity of the ESM and of the EFSF of €500,000 million.

  337. Article 42 makes provision for a “temporary correction” of a contribution key in the event of a Member State’s gross domestic product being less than 75% of the European average. In that event (by Article 42.4) “the relevant proportion of shares allocated to an ESM member .... shall be reallocated amongst the ESM members not benefiting from a temporary correction on the basis of their share holding in the ECB ....”

    Increase in authorised capital

  338. It is also necessary to take account of the provisions of Articles 8, 9 and 10 of the Treaty in relation to the authorised capital of the ESM. These provide:

  339. ARTICLE 8

    Authorised capital stock

    1.

    The authorised capital stock shall be EUR 700 000 million. It shall be divided into seven million shares, having a nominal value of EUR 100 000 each, which shall be available for subscription according to the initial contribution key provided for in Article 11 and calculated in Annex I.

    2.

    The authorised capital stock shall be divided into paid-in shares and callable shares. The initial total aggregate nominal value of paid-in shares shall be EUR 80 000 million. Shares of authorised capital stock initially subscribed shall be issued at par. Other shares shall be issued at par, unless the Board of Governors decides to issue them in special circumstances on other terms.

    3.

    Shares of authorised capital stock shall not be encumbered or pledged in any manner whatsoever and they shall not be transferable, with the exception of transfers for the purposes of implementing adjustments of the contribution key provided for in Article 11 to the extent necessary to ensure that the distribution of shares corresponds to the adjusted key.

    4.

    ESM Members hereby irrevocably and unconditionally undertake to provide their contribution to the authorised capital stock, in accordance with their contribution key in Annex I. They shall meet all capital calls on a timely basis in accordance with the terms set out in this Treaty.

    5.

    The liability of each ESM Member shall be limited, in all circumstances, to its portion of the authorised capital stock at its issue price. No ESM Member shall be liable, by reason of its membership, for obligations of the ESM. The obligations of ESM Members to contribute to the authorised capital stock in accordance with this Treaty are not affected if any such ESM Member becomes eligible for, or is receiving, financial assistance from the ESM.

    ARTICLE 9

    Capital calls

    1.

    The Board of Governors may call in authorised unpaid capital at any time and set an appropriate period of time for its payment by the ESM Members.

    2.

    The Board of Directors may call in authorised unpaid capital by simple majority decision to restore the level of paid-in capital if the amount of the latter is reduced by the absorption of losses below the level established in Article 8(2), as may be amended by the Board of Governors following the procedure provided for in Article 10, and set an appropriate period of time for its payment by the ESM Members.

    3.

    The Managing Director shall call authorised unpaid capital in a timely manner if needed to avoid the ESM being in default of any scheduled or other payment obligation due to ESM creditors. The Managing Director shall inform the Board of Directors and the Board of Governors of any such call. When a potential shortfall in ESM funds is detected, the Managing Director shall make such capital call(s) as soon as possible with a view to ensuring that the ESM shall have sufficient funds to meet payments due to creditors in full on their due date. ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them by the Managing Director pursuant to this paragraph, such demand to be paid within seven days of receipt.

    4.

    The Board of Directors shall adopt the detailed terms and conditions which shall apply to calls on capital pursuant to this Article.

    ARTICLE 10

    Changes in authorised capital stock

    1.

    The Board of Governors shall review regularly and at least every five years the maximum lending volume and the adequacy of the authorised capital stock of the ESM. It may decide to change the authorised capital stock and amend Article 8 and Annex II accordingly. Such decision shall enter into force after the ESM Members have notified the Depositary of the completion of their applicable national procedures. The new shares shall be allocated to the ESM Members according to the contribution key provided for in Article 11 and in Annex I.

    2.

    The Board of Directors shall adopt the detailed terms and conditions which shall apply to all or any capital changes made under paragraph 1.

    3.

    Upon a Member State of the European Union becoming a new ESM Member, the authorised capital stock of the ESM shall be automatically increased by multiplying the respective amounts then prevailing by the ratio, within the adjusted contribution key provided for in Article 11, between the weighting of the new ESM Member and the weighting of the existing ESM Members.

  340. These provisions are manifestly of great importance. It will be observed, in particular, that by Article 9 the Board of Governors “may call in authorised unpaid capital at any time”. If that is done Ireland would become liable to make a payment, which it has already committed itself to make, at a time fixed by the Board of Governors.

  341. Moreover, the Board of Directors of the ESM may call in authorised unpaid capital by simple majority decision for the purpose of restoring the level of paid in capital “if the amount of the latter is reduced by the absorption of losses below the level established in Article 8(2), as that Article may itself be amended by the Board of Governors. This, too, will be a call which Ireland will then be powerless to resist, or, to use some of the wording of Crotty, to say “no” to, simply because it would be deemed already to have said “yes”.

  342. It will, of course, be understood that the effect of these provisions might be, depending on what an entity entirely outside Irish democratic control says to compel Ireland forthwith to pay the balance of authorised but unpaid capital up to a maximum of €11.145 billion.

  343. By Article 10, the Board of Governors are required to review regularly the maximum lending volume and the question of the adequacy of the authorised capital stock of the ESM. It will be remembered that this has been fixed, by Article 8, at €700 billion. But this sum may be changed by the Board of Governors of the European Stability Mechanism, which body is also authorised to amend Article 8 and annex 2 accordingly. The effect of this is that the Board of Governors are empowered to increase the authorised capital and to make demands on the Member States, in sums not capable of anticipation at the moment, to supply the balance of the authorised capital stock so fixed, or such proportion of it as the Governors demand.

  344. Some comfort in this regard is taken by certain persons from the following phrase in Article 10:

  345. Such decision [a decision to increase the authorised capital] shall enter into force after the ESM Members have notified the Depositary of the completion of their applicable national procedures.

  346. It has been suggested that this provision means that the approval of each Member State is necessary for an increase in the authorised capital. I consider that this interpretation is grossly optimistic and, as a matter of probability, wrong. The power to increase the capital is conferred on the Board of Governors of the European Stability Mechanism. The reference to the Members relates to the time at which a decision of the Board of Governors shall enter into force. It does not appear to me to confer any discretion on the Members, but merely to recognise that they must go through “applicable national procedures”. If it were desired to confer a veto on each individual Member State in relation to an increase in capital it would have been very easy to say that in so many words. I consider that the effect of Article 10 combined with the other provisions of the Treaty is to oblige Member States to do whatever is necessary to provide their increased contributions if the Board of Governors increase the authorised capital stock.

  347. Defendants’ case on Crotty with observations

  348. As already noted, the defendants do not doubt the authority of Crotty or invite the Court to depart from it. But they say that the ESM Treaty is “qualitatively different” from the Treaty contained in Title III of the Single European Act, which was the instrument under consideration by the Supreme Court in Crotty.

  349. The defendants deny that the European Stability Mechanism would:

    1. Constitute a transformation in relations between Ireland and the other States party to the agreement.

    2. Undermine the essential nature of what they call “Ireland’s residual sovereignty” or

    3. “Fetter”, in relation to a policy making role, powers bestowed unfettered by the Constitution and “which remain unfettered thereunder”.

    The defendants go on to say, in a sentence suggestively complex construction, that the ESM Treaty “apart from being qua international agreement a formal exercise in international relations ....”

  350. pause at this point to note the necessarily implicit agreement (albeit reduced to an introductory subordinate clause) between the parties to this Action that the Treaty is indeed “an exercise in international relations”, though the State qualifies this by the insertion of the adjective “formal. This qualification is without meaning in my view, but is plainly an attempt to take the ratification of the treaty out of the category of Acts which “determine the States relations with other Nations”. (Article 1 of the Constitution)

  351. The basis of this qualification is to be found in the next phrase they employ which is to say that the Treaty, though “a formal exercise in international relations”:

  352. .... has little to do with the conduct of the State’s foreign policy.

  353. On this basis, the defendants appear to suggest that Crotty is distinguishable.

  354. I do not at all agree that Crotty is thus distinguishable from the present case. The Treaty in question here is in reality, in totality and both in form and in content an international agreement. It is nothing else. I frankly do not understand the nature of the difficulty with this characterisation which is coyly epitomised by the State defendants in their by the use of the word “formal”, which has no basis in the Treaty or in Irish or European law.

  355. The text of the Treaty is set out in the English language in Part II of the Schedule to the Europeans Stability Mechanism Act, 2012. It recites as follows:

  356. PART 2

    Text of Treaty in the English Language

    TREATY

    ESTABLISHING THE EUROPEAN STABILITY MECHANISM

    BETWEEN THE KINGDOM OF BELGUM, THE FEDERAL

    REPUBLIC OF GERMANY,

    THE REPUBLIC OF ESTONIA, IRELAND, THE HELLENIC

    REPUBLIC,

    THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC,

    THE ITALIAN REPUBLIC, THE REPUBLIC OF CYPRUS,

    THE GRAND DUCHY OF LUXEMBOURG, MALTA,

    THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC

    OF AUSTRIA,

    THE PORTUGUESE REPUBLIC, THE REPUBLIC OF

    SLOVENIA,

    THE SLOVAK REPUBLIC AND THE REPUBLIC OF FINLAND

    The document so headed is manifestly and unarguably an International Agreement.

  357. It then goes on to introduce the text of the Treaty with the statement that:

  358. THE CONTRACTING PARTIES [the States involved as set out] HAVE AGREED AS FOLLOWS.

  359. The text of the Treaty is then set out. In my view the foregoing makes it quite clear that the Treaty to which this action relates is in reality, in form and in substance an international agreement. That is its nature: it has no other nature. It is utterly meaningless to qualify this in some way by saying that it is only “formally” an exercise in international relations. Both the form and the content makes clear that, in the matters to which it relates, the Treaty is an instrument which “determine(s) [Ireland’s] relations with other nations”, to use the words of Article 1 of the Constitution.

  360. The substantial purpose of the Treaty, as set out in Article 3 (ESM) is “mobilise funding and provide stability to support .... to the benefit of ESM members which are experiencing, or are threatened by, severe financing problems ....” That is to say, the new financial institution constituted by the Treaty will enter into the relationship of debtor and creditor with countries which are party to the Treaty and which are experiencing financing problems. The countries who are party to the Treaty will provide the finance to do this in the way set out in the provisions of the Treaty already cited in this judgment. In Article 8 those countries “irrevocably and unconditionally” undertake to do so. Once the Treaty is ratified, the provision of this finance becomes mandatory on the countries which ratify it, in the proportions already outlined, and either at the stated intervals or even sooner on the accelerated basis set out above.

  361. The State in their submissions seek to distinguish the freedom to formulate foreign policy from the freedom to formulate economic policy and the freedom to legislate. This is on the basis of a quotation from the judgment of Walsh J. in Crotty; which has been set out earlier in this judgment, and includes the words:

  362. The freedom to formulate foreign policy is just as much a mark of sovereignty as the freedom to form economic policy and the freedom to legislate. The latter too have now been curtailed, by the consent of the people to the amendment of the Constitution which is contained in Article 29.4.3.

  363. This passage appears to me to assimilate, and not to differentiate, the freedom to form economic policy and the freedom to legislate on the one hand with the freedom to formulate foreign policy in the other hand. What they have in common, and it is a very fundamental quality, is that they are all aspects of sovereignty. It is certainly true that the third amendment to the Constitution of 1972 provided an exemption from constitutional scrutiny for acts “necessitated” by membership of what is now the European Union. This was re-iterated at the time of the Lisbon Treaty. But it is common case that the present measure is not so necessitated and is not, indeed, a European Union measure at all. Not withstanding this, the State defendants submit that the plaintiff’s case in this respect “ignores the fundamentally altered legal landscape and invites the Court to assume that the constitutional context is the same as that which prevailed a generation ago in 1987 when Crotty was decided”.

  364. “When Crotty was decided”

  365. In the State defendants written submissions the somewhat vague statement just quoted is, perhaps, put more specifically by saying:

  366. The respondents submit that the concerns expressed in Crotty, regarding the justiciable limits to the exercise by the government of its unfettered foreign relations power, do not arise in this case.

  367. I regard this as the substance of the defendants’ case and as meaning that the State does not take issue with the statement, in Crotty, of the constitutional limitations on the Government’s foreign relations power, but does not consider that these limits have been breached in the case of the present Treaty. I consider that the wording of the State defendants’ submissions, just quoted, is not properly representative of Crotty. Firstly, the majority judgments in that case do not express “concerns” but make binding and authoritative findings as to the constitutional limitations on the power of the Executive “in or in connection with [the State’s] external relations”.

  368. Secondly, it appears to me that the specific subject matter of any Treaty which the State may arrive at with another State or States does not affect the nature of such Treaty as an exercise “in or in connection with [the State’s] external relations, that is, as an instrument which, in one regard or another, is used “to determine [the State’s] relations with other nations”. The instruments’ nature as an exercise in International relations is unaffected by whether the subject matter of the agreement is economic, defence – or security – related, commercial, or for that matter by whether it relates to the protection of wild birds. I say this in light of the State defendant’s submissions, quoted above, that the ESM Treaty “.... apart from being qua international agreement a formal exercise in international relations has little to do with the conduct of the State’s foreign policy”.

  369. At the present time, and probably at all times, the State’s foreign policy concerns have included, and not in any inferior position, policy considerations of a commercial and of an economic nature. I do not believe that there is any area of pure “foreign policy”: it always has its focus on some specific area of the State’s policy concerns which have a foreign dimension. This must especially be true at the present time, when notoriously, the State’s domestic economic concerns reflect a felt need to meet certain criteria articulated outside the State and to make certain payments in respect of funding sourced outside the State.

  370. Nature of the Treaty

  371. It is in my view clear from the provisions of the Treaty set out above that it involves all the countries which are party to it, in varying degrees, in the ownership of shares in a new international financial institution; in the payment for those shares at the times and in the enormous amounts set out, and in acquiescence in the use of the sums contributed for shares, and other sums paid or raised by borrowing in accordance with the Treaty, in providing support to countries selected by the Government of the new institution on conditions, as to repayment and otherwise, to be laid down by the ESM, and not by Ireland or by any other individual country.

  372. It appears to me self evident that, if Ireland were itself to loan €11 billion or any part of that sum to individual country on terms agreed individually, that would be a transaction which is part of the Irish State’s relations with another State (or States). Ireland would be entering into the relationship of debtor and creditor with such State.

  373. By virtue of the ESM Treaty, Ireland has entered into relations with the States set out in the preamble to participate with them in the European Stability Mechanism and to make payments to that body, which agreements are of a binding nature, “irrevocable and unconditional” as the Treaty says (Article 8).

  374. In Crotty, Walsh J. said, speaking of the Single European Act, at p.780 of the Report:

  375. The object of this Treaty, so far as Ireland is concerned, is to bind this State in its relations with the other Member States of the European Communities. Adherence to the Treaty, or indeed the Treaty itself, is not in any sense an obligation arising from or necessitated by membership of the European Communities.

    It appears to me that that statement can be repeated of the Treaty in question here with the following alterations only:

    The object of this Treaty, so far as Ireland is concerned, is to bind this State in its relations with some other States and with a new entity created by those States, the European Stability Mechanism. Adherence to the Treaty, or indeed the Treaty itself, is not in any sense an obligation arising from or necessitated by membership of the European Communities.

  376. This was the basis on which the SEA was required to be submitted to referendum.

  377. I cannot see that these alterations, which are all that are necessary to apply the statement of Walsh J. to the present Treaty, make any difference at all to the vital question of whether ratification of this Treaty requires recourse to the people because it is outside the powers of the Government and the Oireachtas.

  378. To judge by para. 88 of the State defendants’ written submission, they conceive the ratio of Crotty as follows:

  379. Crotty turns on the transfer of sovereign powers in the field of foreign policy that this Court considered was involved in the EPC Treaty and which the majority of the Court regarded as impermissible. It was because such an impermissible transfer was involved (since no political co-operation was envisaged or then provided for in the European Communities Treaties) that the binding commitment to co-operate with other contracting parties was involved in the EPC Treaty in respect of the formulation of foreign policy radically altered the then legal landscape as regards the freedom of the State to pursue its own foreign policies as it saw fit from time to time. As Henchy J. put it: ‘[a] purely national approach to foreign policy’, which was then the case, ‘[wa]s incompatible with accession to this Treaty’.

  380. I interpret this submission as involving the concession that a “purely national approach to foreign policy” is what was envisaged by the Constitution. But the State defendants, clearly, regard that as having changed in the interval: hence their submissions, quoted above, about a “fundamentally altered legal landscape”.

  381. The landscape is indeed altered, but exclusively with regard to the European Union. The present Treaty is not a European Union Instrument or something required by membership of the European Union. That appears to me to be a simple and dominating aspect of the analysis of the present claim. Under the ESM the use of some €11 billion of Irish taxpayers money, a sum sufficient to be of macro-economic significance, will be removed from the power of expenditure of the Irish government and the parliament to which it is accountable. Instead, that money will “irrevocably and unconditionally” be given by Ireland to a new financial institution which exists physically outside Ireland and legally and constitutionally outside the Irish constitutional and legal order, as well as outside that of the European Union.

  382. Irish provisions on public monies

  383. It appears to me that terms of the European Stability Mechanism Treaty involve Ireland in committing a very large sum of money subscribed by the taxpayers of Ireland to be expended by a body outside the Irish legal order.

  384. Further, it appears to me that the terms of that Treaty are such that those monies are to be expended for a purpose quite different to that of furthering the common good of the people of Ireland.

  385. I say this for the following reasons:

  386. For the reasons already set out in this judgment the entire revenues of the Irish State form a single fund (Article 11 of the Constitution) which is to be expended in the manner provided by Irish law (Article 11 also) and in the interest of the common good of the people of Ireland (Article 6 of the Constitution).

  387. In particular, such funds are to be “appropriated for the purposes and in the manner” laid down by Irish law (Article 11). The most immediately relevant provisions of this law appear to me to be those enshrined in Article 17 of the Constitution and Article 28.4.3 of the Constitution both of which have been cited above. The “Single Fund” referred to in Article 11 is, by reason of the Constitution (Consequential Provisions) Act 1937, s.6, to be known as the “Central Fund”.

  388. Section 6 of that Act provides as follows:

  389. 6.

    (1)

    The fund mentioned in Article 11 of the Constitution as the one fund to be formed by the revenues of the State shall be called and known as the Central Fund and is in this section and the next following section of this Act referred to for the purpose of distinction as the Central Fund of Ireland.

  390. That constitution of the Central Fund appears to invoke the jurisdiction of the Comptroller and Auditor General. Article 33.1 of the Constitution provides:

  391. There shall be a Comptroller and Auditor General to control on behalf of the State all disbursements and to audit all accounts of monies administered by or under the authority of the Oireachtas.

  392. The banking transactions on the Central Fund, which were formerly conducted through the Exchequer Account in the Bank of Ireland are now, by virtue of s.49 of the Central Bank Act 1971 conducted through the Central Bank. This measure provides as follows:

  393. 49.

    (1)

    The Exchequer account in the Bank of Ireland shall be transferred to the Bank [i.e. the Central Bank] and, accordingly, references in sections 10, 11, 13 and 15 of the Exchequer and Audit Departments Act 1866 to the Bank of Ireland shall be construed as references to the Bank.

  394. Section 2 of the Comptroller and Auditor General (Amendment) Act 1993 provides as follows:

  395. 2.

    Upon receipt of a requisition in that behalf from the Minister the Comptroller and Auditor General shall, if he is satisfied as to the correctness thereof, grant to the Minister, on the account of the Exchequer at the Central Bank or on the growing balance thereof, credits –

    (a)

    That are to meet disbursements in respect of supply services and do not exceed the amount authorised by the Central Fund (Permanent Provisions) Act, 1965 or, as the case may be voted by Dáil Eireann for any supply service for the financial year to which the requisition relates, or

    (b)

    (i)

    That are to meet disbursements in respect of Central Fund services the making of which is certified by the Minister to fall due during the period of three months commencing with the commencement of the period in respect of which the credits are sought,

    (ii)

    That are of the amounts estimated to be required for the purposes specified in subparagraph (i) .... and

    (iii)

    That comply in all other respects with the provisions of the enactments relating to them.

    Conclusions

  396. It will be remembered that monies paid to the ESM will be used for the purpose of providing support to members of the Euro zone in financial difficulty, where such support is “indispensable to safeguard the financial stability of the Euro area as a whole and of its Member States (Article 3 ESM Treaty).

  397. It will also be remembered that, in relation to a specific decision to provide such support, the ESM may take a decision by “qualifying majority” in the following circumstances (Article 4 ESM Treaty):

  398. .... an emergency voting procedure shall be used where the Commission and the ECB both conclude that a failure to urgently adopt a decision to grant or implement financial assistance would threaten the economic and financial sustainability of the Euro area.

    [emphasis added]

  399. It thus appears to me that the Treaty involves a change to the fundamental values and procedures enshrined in the Constitution in that:

    1. A significant sum of money subscribed by Irish taxpayers would be given “irrevocably and unconditionally” to a body which exists outside the Irish, and the European, legal and constitutional order.

    2. That body would be obliged by its constitution to expend these monies, or monies raised on the basis of them, in the interests of the Euro zone or its Member States, as opposed to devoting them, as the Irish government would have been obliged to do, to the common good of the Irish people.

  400. As I have already said, these interests may of course overlap in any particular case but, on the other hand, they may not overlap. It is impossible, looking at these matters before the commencement of the Stability Mechanism, to say in advance whether these different interests will always, sometimes, or never overlap in practice. Such an assessment would depend on matters which are simply unknown at the present time and which in any event would fall to be assessed politically. For example, the question of whether the Fund would be used only to address difficulties which arose after the coming into existence of the Fund, or whether on the other hand it might be available to assist in “historic” or “legacy” difficulties (for example, banking difficulties) which arose before that date, is an issue not now capable of resolution.

  401. It appears to me, therefore, that adherence to the ESM Treaty would infringe Ireland’s sovereignty and her inalienable right independently to decide her relations with other States in the following ways.

  402. Firstly, as set out above, by requiring a substantial sum of Irish public money to be transferred to a new financial institution, outside both Irish and European Union control, and to be spent by that institution on providing funding to other countries which are experiencing severe financial problems where it is “indispensable to safeguard the financial stability of the Euro area as a whole or of its Member States”, rather than retained in Irish control and employed, in the manner specified in the Constitution, in furtherance of the common good of the Irish people.

  403. Secondly, by requiring Ireland to submit to decisions as to the expenditure of the fund already mentioned, and itself to exercise its relevant powers, in “particular procedures” (as Walsh J. put it) being those laid down by the ESM Treaty.

  404. This appears to me to be amongst the very things held to be impossible in terms of the Constitution in Crotty. Walsh J., in a passage already quoted pointed out that the Government’s freedom of action in relation to foreign affairs:

  405. .... does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures ....

  406. The subject matter of these decisions relates both to the expenditure of Irish public money and to Ireland’s relations with the States which would be beneficiaries of this expenditure and thereby engages both the constitutional provisions relating to the expenditure of public monies and those relating to the conduct of the State’s external relations. The Constitution as adopted in 1937 envisaged what Henchy J. called, in passages already cited in this judgment, “a purely national approach” two questions of external relations and, indeed, to public expenditure. Subsequent amendments to the Constitution, the most general of which is quoted above in its entirety, have committed the State, in varying degrees, to replace “a purely national approach” with an approach affected by, and sometimes dictated by, the European Union. What is now proposed is outside the scope either of a purely national approach or of a European Union approach. It is a tertium quid, a new dispensation of an entirely different nature, and is not in my view contemplated or mandated by the Constitution. Neither is it compatible with its terms, for the reasons outlined above.

  407. Thirdly, and quite apart from the foregoing, I have considerable doubts as to whether the commitments into which it is now proposed that Ireland should enter are consistent with the constitutional provisions for ensuring the democratic accountability of the government and of Ministers, and for ensuring democratic accountability, to the Irish people, for the appropriation and expenditure of the monies which compose the Central Fund.

  408. Having regard to the conclusions already expressed above, it is unnecessary for the resolution of this case to resolve these issues. But I propose now to indicate matters which seem to me to require serious consideration in this regard.

  409. These concerns relate, for instance, to the position of the Minister for Finance. The Minister is a member of the Government, to whom has been allocated the Department of Finance. In that capacity he is a member of body which “shall meet and act as a collective authority and shall be collectively responsible for the Departments of State administered by the members of the Government” (Article 28.4.2) and which “shall be responsible to Dáil Eireann” (Article 28.4.1). Furthermore, the Minister is constituted by the Ministers and Secretaries Act 1924 as a corporation sole with perpetual succession and having the capacity to sue or be sued.

  410. The position of the Minister in his capacity as a Governor of the European Stability Mechanism presents some contrast. Firstly, by Article 5(1) each ESM member shall appoint a governor. The governor must be the member of the Government of the member who has responsibility for finance.

  411. By Article 34 of the Treaty all members, or former members, of the Board of Governors “shall not disclose information that is subject to professional secrecy” and are required, even after retirement, “not to disclose information of a kind covered by the obligations of professional secrecy”.

  412. It is not clear to me how this is consistent either with collective responsibility or with accountability to Dáil Eireann. Moreover, by Article 35 of the Treaty, the Governors “shall be immune from legal proceedings with respect to acts performed by them in their official capacity and shall enjoy inviolability in respect of their official papers and documents”.

  413. It is not clear to me how this is consistent with the Minister’s statutory capacity to sue or be sued.

  414. The Minister, if the Treaty is adhered to by Ireland, will be a member of the Board of the Governors of the ESM by virtue of his capacity as Minister for Finance. In that capacity he is collectively responsible with his government colleagues, and is accountable to Dáil Eireann, and is liable to be sued by a citizen who thinks he has cause to do so. Is he responsible to the Government, or to the Dáil, for his actions as a member of the Board of Governors of the ESM? Is he liable to be sued in respect of these, or not? It appears to me that these questions have simply not been addressed.

  415. Equally, the fund out of which the €11 billion which Ireland must pay to the ESM is to be paid is the Central Fund. The constitutional and statutory provisions in relation to payments out of that fund have been set out above. It is not clear to me that the question whether or not the payments to the ESM are consistent with those provisions has been addressed at all.

  416. Is the Treaty itself, or the 2012 Act, intended to be an appropriation for the purposes of Article 11 of the Constitution? Are the very substantial disbursements “irrevocably and unconditionally” promised by the State, required to be provided for in the Estimates of Expenditure of the State referred to in Article 17 of the Constitution? There does not appear to be, in the 2012 Act or elsewhere, any provision “by specific enactment in each case” exempting such payments from the requirement that these Estimates be approved by legislation passed “each year”, contained in Article 17.2. Equally, it is not clear whether the requirement that the Comptroller and Auditor General authorise payments out of the Central Fund to the ESM applies or not. What would be the position, having regard to Article 17.2, of a future Government, Taoiseach, who did not wish to approve, or to recommend, an appropriation for payments to the ESM to Dáil Eireann?

  417. I consider the foregoing to be matters of significance. It may be that they have been addressed, in each case, and that it is considered that no constitutional amendment or legislation is necessary in relation to them. On the other hand, it may be that those questions have not been addressed at all. But my conclusion in this case is based on the more fundamental and clearly established propositions that adherence to the Treaty establishing the European Stability Mechanism is not possible without recourse to the people having regard to the significant changes it introduces both as to the manner in which the sum of €11 billion of Irish tax payers money is to be spent, and the purposes for which that expenditure is to take place.

  418. Proposed Order

  419. Accordingly, using the language contained in the State’s submissions as to the issues that arose in this case I would hold that, having regard to the various arguments advanced by the appellant, the ESM Treaty involves a transfer of sovereignty to a degree that makes it incompatible with the Constitution when one applies the principles set out by this Court in Crotty, such that a referendum amending the Constitution is necessary to permit the State to ratify the ESM Treaty on behalf of Ireland.

    Justice O’Donnell

  420. I gratefully adopt the account of both the procedural history of this case, and the nature and effect of the European Stability Mechanism Treaty (“the ESM Treaty”) contained in the judgments of Denham C.J. and Clarke J. with which judgments I am in full agreement.

  421. The central issue in this case is whether or not entry into an international treaty containing provisions such as those contained in the ESM Treaty, could contravene the constitutional limitations on the exercise of Executive power in the field of foreign affairs identified in Crotty v An Taoiseach [1987] I.R. 713. The plaintiff’s case in this regard was that the ratification of the ESM Treaty was a momentous decision on the part of the Irish Government involving a potential liability of up to €11.1454 billion by way of contribution to a fund totalling some €700 billion for the express purpose of securing the stability of the Eurozone, or any member thereof, in circumstances where the allocations from the fund could, at least in certain circumstances, be made by a qualified majority of the contracting states which might not include Ireland, either because Ireland disagreed with the allocation or was excluded from voting.

  422. It was argued that the essence of the decision in Crotty was to be found in a passage of the judgment of Walsh J. at p.781 in which he said:–

  423. As was pointed out in the decision of this Court in the first part of this case the essential nature of sovereignty is the right to say yes or to say no. In the present Treaty provisions that right is to be materially qualified.

    The reference to the first part of the case was to the single judgment of the Court delivered by Finlay C.J. upholding the constitutionality of the European Communities (Amendment) Act 1986, which had brought into force those elements of the Single European Act (“the SEA”) which did not involve foreign affairs. It was argued therefore, that the ESM Treaty was an unconstitutional fettering of Irish sovereignty because, to put it at its simplest, the ESM (including Ireland’s contribution) could be applied in circumstances in which Ireland might not agree. It was argued that this could not be permitted other than by a decision of the People in a referendum, akin to the provisions of the third amendment inserting Article 29.4.3 which permitted the State to become a member of the European Communities.

  424. There can be little doubt that if the essence of sovereignty, at least as contemplated by the Irish Constitution, is to be understood as meaning that Ireland fetters its sovereign right to decide by joining any organisation which acts collectively, or at least one in which Ireland does not retain a veto (and therefore the right to say no), then the ESM Treaty would be of dubious constitutional validity, along with, it must be said, many other important international agreements. However, judgments are not to be read in the same way as statutes. A single sentence in a judgment rarely encapsulates the essence of a lengthy judgment, and a judgment of one judge, even one as eminent and influential as Walsh J., is not to be taken, in isolation, as stating the ratio decidendi of a case. There is always a danger of substituting the invocation of a vivid and memorable phrase for the analysis of the substance of a judgment. Like Denham C.J. and Clarke J., and those of my colleagues concurring with those judgments, I am quite satisfied that the plaintiff’s arguments here involve a clear misunderstanding and misinterpretation of Crotty, but perhaps more importantly, of the Constitution.

  425. The provisions of the Constitution dealing with the exercise of Executive power in the field of foreign affairs were closely analysed in the judgments in Crotty and particularly in those of Barrington J. in the High Court and Finlay C.J. and Walsh and Henchy JJ. in the Supreme Court. It is indeed a distinctive feature of the Constitution adopted in 1937 that it deals with external relations at all. The historical background is usefully discussed in a Thomas Davis lecture delivered by Mr. Justice Barrington in 1988 entitled “The North and the Constitution” (published in Farrell ed., De Valera’s Constitution and Ours, (Dublin: Gill & Macmillan, 1988)), which pointed out that in 1936 when the Constitution was being drafted, Mr de Valera was President of the League of Nations and that some of the values of the Covenant of the League of Nations were clearly reflected in the Constitution itself and in particular in Article 29. It is also noteworthy that the provisions dealing with the conduct of foreign affairs, and particularly the extent to which there was to be review of the Executive’s conduct in such matters and the identification of the body exercising such power of review, were the subject of very carefully drafted, nuanced provisions, clearly influenced by, and consistent with, other aspects of the architecture of the Constitution. Thus it is noteworthy that the Constitution contemplates that the Government may enter into international agreements and then divide those agreements into a number of types, with different constitutional consequences. All international agreements must be laid before the Dáil under Article 29.5 (and it is to be noted, only the Dáil and not the Oireachtas generally), consistent with the Government’s answerability to that house under Article 28.4.1. Any agreement which goes further and involves a charge on public funds (other than an agreement of a technical or administrative character), must be approved by the Dáil, again consistent with that body’s distinct role in financial matters reflected in Articles 17, 20, 21, 22, and 28.7. Finally, in this regard no international agreement may become part of the law of the State save as may be determined by the Oireachtas as a whole pursuant to Article 29.6, a provision which is once again consistent with the vesting in the Oireachtas of the sole and exclusive power of making laws for the State under Article 15.2.1. From these provisions may be drawn the unremarkable conclusion that the Constitution contemplates that the conduct of the State’s foreign relations will necessarily involve the making of binding agreements with other states, which agreements could have financial consequences for the State, and on occasions require an alteration of its domestic law.

  426. Among the other relevant provisions of the Constitution dealing with foreign affairs is the specific requirement that war may not be declared save with the assent of Dáil Éireann (Article 28.3). This is striking because it appears to be the single incidence in which the Executive power in the field of foreign affairs is restricted by a requirement to obtain the prior agreement or concurrence of any other body, but equally significant for present purposes in that the assent of the Dáil alone is required. Not only is there not a requirement of approval by the Oireachtas generally, but there is clearly no requirement for direct approval by the People. The more general and rarely litigated provisions of Article 29 are also instructive in this regard. Ireland’s affirmation of its devotion to the ideal of peace and friendly cooperation, and adherence to the principle of pacific settlements of international disputes by international arbitration and judicial determination, together with its acceptance of the generally recognised principles of international law, may all appear unremarkable today, but were significant and far sighted provisions in 1937. It can be deduced from these constitutional provisions, at a minimum, that the Constitution clearly anticipated the Executive power could and would involve the making of binding agreements with other nations, and that Ireland might become involved in disputes which themselves might be resolved by a process involving a binding determination by which Ireland would be obliged to abide. Article 29.4.2 is a little discussed provision nowadays, being seen as of largely historically interest. However, it again clearly envisages that in its conduct of foreign affairs, Ireland could adopt mechanisms utilised by members of any group or league of nations with which the State could become associated for the purposes of international cooperation. This again contemplates that the business of the conduct of foreign affairs might necessarily involve the making of agreements with foreign States, cooperation with, and membership of, international bodies, and occasionally, and regrettably, the possible occurrence of disputes including the commitment of the State to a war.

  427. While these explicit provisions are instructive, they very deliberately impose little by way of judicially enforceable restriction on the substantive exercise by the Executive of its conduct of foreign relations. Article 29.4 makes it clear that it is the Government which shall conduct external relations and by its reference to Article 28 emphasises that in that respect, the Government is responsible to the Dáil. That is the method the Constitution envisages for review and control of the exercise of the Executive power in the conduct of foreign relations. The courts have repeatedly affirmed their limited role in the review of Governmental activity in the field of foreign affairs. In Crotty at p. 774, Finlay C.J. said that:–

  428. There is nothing in the provisions of Articles 28 and 29 of the Constitution, in my opinion, from which it would be possible to imply any right in the Courts in general to interfere in the field or area of external relations with the exercise of an executive power.

    At p. 777, Walsh J. said, to similar effect:–

    It is the Government alone which negotiates and makes treaties and it is the sole organ of the State in the field of international affairs.

    [emphasis added]

    The courts’ function in this regard is to enforce those boundaries of, and limitations to, the exercise of the Executive power in foreign relations which are either express in, or to be implied from, the constitutional text, and at the same time to reject any attempt to impose limitations on Governmental conduct of foreign relations not justified by the Constitution. The State (Gilliland) v The Governor of Mountjoy Prison [1987] I.R. 201 is a rare example of the enforcement of an express limitation in the Constitution where a treaty was found to involve a charge on public funds which had not been approved by the Dáil. Crotty is an example of a limitation derived from the structure of the Constitution itself. Since it is to the Government alone that the conduct of foreign affairs is consigned by the Constitution, it follows that such international relations must be conducted by the Government, which cannot abdicate, alienate, transfer or subordinate its functions to any other State or body.

  429. Returning then to the present case, it is clear that the plaintiff’s argument places considerable reliance on the single sentence from the judgment of Walsh J. referring to the right to say yes or no in order to contend that an agreement such as this, which creates at least the possibility of decisions being made on the allocation of ESM funds without Ireland’s agreement, is unconstitutional. In my view, that contention is profoundly misconceived on a number of levels.

  430. It seems clear to me that even in the very specific context in which the words are used, they should not be understood in the manner contended for. As already observed, Walsh J. referred back to the single judgment of the Court on the European Communities (Amendment) Act 1986 when he repeated the phrase that the essence of sovereignty was the right to say yes or no. The source of that observation was a portion of the judgment of Finlay C.J. at p. 769. That judgment however, upheld the 1986 Act which implemented the provisions of the SEA which took effect in domestic law on the grounds that the original licence granted by the People to join the European Communities was a licence to join a dynamic and developing entity. Therefore, incremental changes in European institutions within the scope of the existing licence did not require further express approval by the People. But one of the most significant changes challenged was the adoption by the Community of qualified majority voting rather than unanimity in certain cases. In each such case the consequence of the change was that Ireland (and necessarily every other member state) lost its veto: in specific terms, Ireland lost the right, in those circumstances, to say no. Yet that change was not incompatible with the Constitution. That in itself is a powerful indicator that the single phrase, vivid though it may be, cannot be read in the simplistic way put forward by the plaintiff in this case.

  431. That conclusion becomes even clearer when the judgment of Walsh J. is looked at as a whole in the context of the case. As Clarke J. points out in his judgment, the essence of the decision of the majority is to be found in a series of passages in the majority judgments. For example, and perhaps most clearly, in the judgment of Henchy J. it is stated thus at p.787:–

  432. It follows, in my view, that any attempt by the Government to make a binding commitment to alienate in whole or in part to other states the conduct of foreign relations would be inconsistent with the Government’s duty to conduct those relations in accordance with the Constitution.

    Hederman J. at p. 794 considered that the essential point was that the State could not “.... enter into binding agreements with other states, or groups of states, to subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interests of other states ....”

    These statements are clearly consistent with the judgment of Walsh J. at p. 778 where he said:–

    It is not within the competence of the Government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered to do so by the Constitution.

    Similarly, at p. 783 he said:–

    In enacting the Constitution the people conferred full freedom of action upon the Government to decide matters of foreign policy and to act as it thinks fit on any particular issue so far as policy is concerned and as, in the opinion of the Government, the occasion requires. In my view, this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures, and so to bind the State in its freedom of action in its foreign policy.

    In my view, the words “abdicate”, “alienate”, “subordinate” and indeed also “transfer” contain the essence of what was considered impermissible in Crotty.

  433. This conclusion is I think, consistent with a fair reading of the case as a whole, and in particular when considered in the light of what was in issue between the parties. In the Supreme Court, the State parties had taken up an absolute position – that the Government’s exercise of the Executive function of making treaties could never be the subject of judicial scrutiny – which was rejected by the entirety of the court. What divided the court itself was a narrower issue and essentially one of timing. There was little disagreement on the fundamental legal principle. The minority, comprised of Finlay C.J. and Griffin J. accepted that if the SEA created a form of political union then there could be no doubt that, in the words of Finlay C.J. at p.771 :–

  434. .... it would constitute an alteration in the essential scope of and objectives of the Communities to which Ireland could not agree without an amendment to the Constitution.

    However the minority considered that this point had not yet been reached. The majority for its part, in the words of Henchy J., considered that the SEA was a significant and decisive step along a path of gradualism towards that objective. There was no dispute therefore that to agree to adopt a single European foreign policy would be inconsistent with the Irish Constitution since the Irish Government would no longer be exercising that power alone. The question which did divide the Court was whether that point had been reached.

  435. I accept of course that there are elements of the judgment of Walsh J. which if taken out of both their specific, and general, context might suggest that it is not possible for the Government to enter into any international agreement which precludes it from saying no at some future stage, and that such freedom of action is of the essence of sovereignty. For a number of reasons I do not consider that the judgment should be so understood, and still less that such a test can be asserted to be part of the ratio decidendi of the case as a whole, or indeed could provide any workable test that is consistent with history, common sense, or the structure of the Constitution.

  436. First, for reasons already identified, the issue in Crotty was not the question now raised as to whether the essence of sovereignty is to be found in an obligation not to alienate or abdicate the power to make foreign policy generally, or alternatively, in maintaining a complete freedom of action in the future in respect of any individual decision. The issue which divided the parties in Crotty was whether or not the courts could enforce any limitation on Governmental activity in the field of foreign affairs. The issue which divided the Court was not whether the creation of a European wide foreign policy would be an alienation of Irish sovereignty, but rather whether such a development had occurred.

  437. Second, as Clarke J. points out in his judgment, any agreement made by a country or an individual almost necessarily limits the freedom of the parties. It certainly restrains the party from saying no to what has been agreed. Furthermore, in many cases the entry into an agreement may also create restraints on the freedom to enter into any inconsistent agreement. It is indeed in the nature of international relations, and expressly contemplated by the Constitution, that states will make treaties, enter into trade agreements, form alliances, join groups and assist in the setting up of international bodies with agreed mandates and which on occasion may have adjudicative functions. There is no sense in which Ireland or any other state can remain completely free to say no, once it has entered into any such agreement, alliance, grouping or body. It is the decision to enter into an agreement or alliance which is the exercise of sovereignty. Indeed as a matter of history, Ireland was a member of the League of Nations at the time that the Constitution was adopted, and in the early years of the Constitution’s life became a member of the United Nations (1955), subscribed to the World Bank and International Monetary Fund (“IMF”) (1957), became a member of the Council of Europe (1949), and accepted the jurisdiction of the European Court of Human Rights (1959). To take only one example, it cannot be suggested that Ireland retains a freedom not to abide by sanctions imposed by a UN resolution, even if Ireland considered that the sanctions were misguided, or that it stood to gain considerably by continuing to trade with the State in question. I do not see however, that that involves any loss of sovereignty: indeed I consider that the Constitution contemplates matters such as membership of the UN as an exercise in the sovereignty of a small country which at the time of the adoption of the Constitution was anxious to secure international recognition of its status as a nation. It is entirely inconsistent with the Constitution, and in particular the first two sub articles of Article 29, to conceive of Ireland being obliged to adopt a position of splendid isolation from other countries so that it could only engage in agreements in which Ireland (perhaps alone) insisted upon a veto over all future decisions, and indeed the right to resile from decisions already made and matters already agreed. The fallacy is perhaps to conceive of the breadth of the power accorded to the Government in the field of foreign affairs as amounting itself to a constraint: on this reading the Government only has freedom of action so long as it does not use it. Quite apart from the fact that such a conception makes little sense, and has not historically been the position taken by the State in the field of foreign affairs, it also appears to me to be inconsistent with what is explicitly contemplated both by the words and structure of the Constitution.

  438. The understanding of Crotty, contained in the judgments of Denham C.J. and Clarke J., is I think, fortified by a consideration of the underlying concept of sovereignty, and particularly the manner in which such sovereignty is expressed in the 1937 Constitution. The concept of sovereignty was traditionally defined as containing not just the positive requirement of a political superior to whom the population was in the habit of obedience, but also, and importantly for present purposes, the negative requirement that such superior owe no obligation of obedience to the dictates of any other body. Thus, John Austin famously asserted in The Province of Jurisprudence Determined (London: Weidenfeld & Nicholson, 1954) at p.193 that:–

  439. The superiority which is styled sovereignty, and the independent political society which sovereignty implies, is distinguished from other superiority and from other society by the following marks or characters –

    1.

    The bulk or the given society or the habit of obedience or submission to a determinative and a common superior: let that common superior be a common individual, or a certain body or aggregate of individual persons.

    2.

    That certain individual or that certain body of individuals is not in a habit of obedience to a determinative human superior.

    [emphasis added]

    Such a sovereign can of course enter into binding alliances with other sovereigns, even those which commit their respective countries to war. However a ruler cannot be a sovereign if he or she habitually acts in obedience to the wishes of another body or person, or to use the language of the majority judgments in Crotty, abdicates, alienates, subordinates or indeed transfers its decision making power to that body. This is, I think, consistent with the use and understanding of the word “ceannasach” used in the Irish text of the Constitution.

  440. Sovereignty, as being a condition of owing no allegiance or duty of obedience to any other entity, is, in my view, asserted very deliberately by the 1937 Constitution, and for obvious reasons, once the historical context is recalled. The new polity being established, in essence although not in name a republic, was one that consciously asserted all the attributes of sovereignty. This was a very deliberate contrast with even the expanded Dominion status which had existed prior to 1937. The Constitution reflected a fundamental truth as to the source of the sovereignty of the State, namely the people. The legal source of the Constitution was to be the decision of the People rather than a grant by a foreign Parliament. The preamble to the Constitution records that it came into being by virtue of the declaration that the people “Do hereby adopt, enact, and give to ourselves this Constitution.” Accordingly, Article 1 states that “The Irish nation hereby affirms its .... sovereign right to choose its own form of Government ....” Consistent with this assertion of sovereignty, Article 6 declares that “all powers of government, legislative, executive and judicial” derive from the people. Among the key attributes of such sovereignty was the right to conduct international relations on an equal basis with other countries and the exclusive exercise by the organs of government of the powers of government.

  441. Both Clarke and Hardiman J.J. have, in their judgments delivered today, emphasised that the Constitution recognises the exclusive powers of the Legislative, Executive and Judicial branches, within their proper spheres. This is of course true. But it is perhaps noteworthy, as the late Professor Kelly was wont to observe, that the form of separation of powers adopted in the Irish Constitution was not the hermetically sealed branches of Government posited by Montesquieu, but rather involved points of intersection, interaction and occasional friction between the branches of Government so established. Thus, by way of illustration only, the Executive appoint the Judiciary and the courts rely on the Executive to execute their judgments; the courts for their part review the acts of both the Legislature and the Executive for compatibility with the Constitution; and the Executive in turn is accountable to the Dáil and in practice commands it; and the members of the Government are required to be drawn from the Legislature. In the architecture of the 1937 Constitution therefore, the respective branches did not exclude each other entirely. On the other hand however, the Constitution did assert the exclusive right of those organs to exercise their respective powers of Government, as against any executive, legislative or judicial competitor, internal or external. Again, the historical context makes this clear. Not only did the new State face an internal challenge from groups seeking to deny it legitimacy and assert their own title to govern, but perhaps even more significantly, the legal status of a dominion (which was how Ireland was viewed by the United Kingdom) was such that the Imperial Parliament still claimed, at least in theory, the right to legislate for Ireland (a claim contained in s.4 of the Irish Free State Constitution Act 1922); the army and navy of the United Kingdom still occupied the Treaty Ports, and the entitlement of the Privy Council to hear appeals from the Irish Supreme Court had only recently been removed in Ireland. This, then, was a very real context in which the exclusive power of the organs of Government was being asserted in the Constitution alongside the assertion in Article 29 of Ireland’s entitlement to take its place among nations and conduct international relations with them. Thus at the very outset of the Constitution in Article 1 it is stated:–

  442. The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.

    [emphasis added]

    To the same effect are the statements in Article 28 that the Executive power is exercised by the Government (and it follows by no one else); in Article 34 that justice is administered in courts (and nowhere else), and in Article 15.2.1 that the Legislature has the “sole and exclusive” power to make laws for the State adding for good measure that “no other legislative authority has power to make laws for the State”.

  443. The interesting historical background to the late adoption of the words “sole and exclusive” in Article 12 of the Constitution of the Irish Free State, 1922, and the addition in 1937 of the words “no other legislative authority has the power to make laws for the State” contained in Article 15.2.1 is reviewed in Morgan, The Separation of Powers in the Irish Constitution, (Dublin: Roundhall, 1987) at pp. 262-263, and in Hogan, The Origins of the Irish Constitution: 1928-1941, (Dublin: RIA, 2012) at p. 335, which provide additional historical support for the conclusion contained in the judgment of Keane J. in Laurentiu v Minister for Justice [1999] 4 I.R. 26 at p. 83 that; “Historically, this Article can be seen as an uncompromising reassertion of the freedom from legislative control by the Imperial Parliament at Westminster of the new State”. But this conclusion is in my view also apt, mutatis mutandis, for the assertion of executive and judicial power in the new Constitution.

  444. Returning then to Crotty it is perhaps clear why the majority considered that the SEA was at the very minimum a “subordination” of Irish sovereignty. In the first place it is plain that the provision affected the entirety of the foreign policy of the State and not simply one area of agreed cooperation. Once enacted, such foreign policy would no longer be made by the Government alone but would be arrived at under a requirement of convergence with the policy of other member states. Seen in this way it is perhaps easy to see why it was claimed that the Executive power of the State in relation to the entirety of its foreign policy was being subordinated, and at least to some extent alienated and transferred, and to that extent abdicated. Ireland would no longer make its own determination of its relationship with other states, to use the language of Article 1, but would make decisions in the light of an embryonic collective foreign policy into which other countries would necessarily have an input. There would therefore have been, to that degree, a diminution of the sovereignty asserted and established under the Constitution, and effected without the assent of the People.

  445. This also demonstrates in my view why the provisions of the ESM are distinct from, and in constitutional terms markedly less significant than, the provisions of the SEA. The ESM does not concern Ireland’s foreign policy as a whole. Instead it relates solely to a decision by Ireland to invest, alongside other member states, in an institution which may make those funds available in accordance with the terms and criteria established by the Treaty, to contracting states, including Ireland. The decision to participate in the ESM was in my view an exercise in sovereignty rather than an alienation of it, and was taken by the organ of Government to which such decisions are consigned by the Constitution. In one sense it is a one off decision by Ireland to invest up to a defined maximum pursuant to a scheme which prescribes the countries to whom funds can be lent, the procedure under which any decision to lend will be made, and the criteria for such a decision. It is no more a breach of Irish sovereignty asserted under the Constitution and defended in Crotty, than a person who decides to invest a large portion of his or her wealth in a limited company with a defined investment objective could be said to lose his or her status as a citizen.

  446. There is no doubt that the figures involved here are very substantial and the decision to ratify the ESM is one which may have significant consequences for the Irish economy, but the quantum of a decision does not alter the identity of the actor required by the Constitution to make the decision. As a matter of history, Irish Governments have expended very considerable sums indeed in, for example, the education and health sectors, pursuant to departmental circulars, and without even the benefit of legislation still less the approval of the People in referenda. In more recent times, Governments have made decisions involving both the expenditure and borrowing of enormous sums of money. In none of these cases has it been suggested that the approval of the People in a referendum is required. Under the Constitution, Governments are expected, and required, to make decisions which on occasion may be momentous, including indeed the declaration of war, albeit in that case with the agreement of Dáil Éireann. In my view there is no reason to conclude that the decision to join the ESM is not one within the Executive power of the Government for which it is answerable to the Dáil.

  447. In my view this approach also demonstrates why it is not possible to read the majority decision in Crotty as requiring that individual decisions made by the Government in the field of foreign policy must, if they are to be valid, make provision for future decisions to be made by unanimity or alternatively, accord to Ireland alone a veto over any such future decision. First, it is plain that no such individual decision was in issue in Crotty: on the contrary, the case concerned the requirement to bend Ireland’s foreign policy in general towards a common European policy. For the reasons already set out, I do not consider that any such supposed principle could be required by the Constitution, and in my view it is not required by Crotty. There is nothing in Crotty, or indeed in logic, to suggest that the concept of sovereignty contained in the Irish Constitution requires that Ireland, while it may enter into agreements, must insist that it retain the capacity to change its mind. Even if the judgment of Walsh J. in Crotty could be interpreted differently (and for the reasons already set out, I do not accept that that is the case), there is in my view no basis for attributing to that judgment, still less a phrase from it, a position of primacy within the case. The ratio decidendi of a decision made by a collegiate court is in my view to be determined by that proposition, or reason, which decides the particular case and on which, it can be said, a majority of the court is agreed. In my view that ratio decidendi is that already set out above, and as addressed in the judgments of the Chief Justice and Clarke J.

  448. This is sufficient to dispose of the centre piece of the plaintiff’s case. But it is also suggested that the ESM is not compatible with the Irish Constitution at least without the approval of the People in a referendum, on two interrelated grounds: first, that it involves Ireland committing a very large of sum of money to be expended by a body outside the Irish legal order; and second, in reliance on dicta contained in the judgment of Henchy J., that it involves an expenditure of monies for a purpose quite different from that of furthering the common good of the People of Ireland. It is necessary to consider these points separately.

  449. It is true that the ESM fund, including that portion subscribed by Ireland, may be expended outside the territory of Ireland. But it is commonplace for public funds to be extended to, and expended by, bodies outside the Irish legal order whether under the guise of overseas aid, specific grants in cases of national emergencies, or subscriptions to international bodies such as the IMF, the World Bank or any international body. In my view, what the Constitution requires is that the decision to subscribe such funds should be taken by the correct organ of Government on its own, and not in subordination to any other body. That decision cannot be transferred, alienated or abdicated to another body. The relevant decision however is the decision to subscribe the funds for an identified purpose. Here that decision was made by the appropriate organ of government, in accordance with the procedures, and accountability, provided for in the Constitution.

  450. Second, I very much doubt that the judgment of Henchy J. is to be understood as suggesting that the courts can review the actions of the Government in the field of foreign relations and if appropriate restrain Governmental action on the grounds that the Court considers, by some standard not identified, that the action or agreement is not in pursuance of the common good of the Irish People. I consider that this portion of the judgment of Henchy J. is really an illustration of the central holding that the SEA, if enacted without constitutional amendment, would involve Ireland in an impermissible alienation or subordination of Governmental authority since the Irish Government would by definition have to take account of considerations outside Ireland’s national interest. To borrow a concept from administrative law, the Irish Government would, to that extent, be making decisions by reference to a consideration which was constitutionally irrelevant and indeed impermissible. I do not think that this could be taken, without much more elaborate and detailed argument and consideration, as an authority for the proposition that the Court can review individual decisions of the Government on the grounds that the decision to adhere to any particular international agreement are not within the interests of the common good of the People of Ireland. Such a proposition would raise very serious issues indeed as to the standard of review and, more fundamentally, the constitutional justification for it. But it is not necessary to address and resolve such issues here because in my view, it is very clear that the Government was fully entitled to conclude that it was in the national interest of Ireland, a country whose currency is the euro and which has suffered significant financial instability, to enter into an agreement which provides for support of the Eurozone generally, or for the economies of individual countries therein. In the circumstances I would dismiss the appeal on this issue.

  451. Interlocutory Injunction

  452. The plaintiff’s application for an interlocutory injunction was refused by Laffoy J., for reasons set out at section VII of her judgment. That decision has been appealed to this Court. However, although formulated as an appeal against the refusal of the injunction by the High Court, the application here was in substance a fresh application for an interlocutory injunction pending the determination of the appeal, akin to that granted by the Supreme Court in Crotty, after the refusal by the Divisional Court of the plaintiff’s claim, and pending the hearing of the appeal by the Supreme Court. See: Crotty v An Taoiseach [1987] I.R. 713 at p.763.

  453. Much jurisprudence has grown up around the grant of interlocutory injunctions. Such orders can be of very considerable, and sometimes decisive, significance. The grant of an interlocutory injunction is often a difficult decision particularly in the field of public law. That difficulty becomes more acute where, as here, matters of fundamental constitutional significance both in relation to Bunreacht na hÉireann, 1937 and the Treaties establishing the European Union are asserted. Nevertheless an injunction remains a flexible remedy designed essentially to control a temporary situation pending the final determination of a dispute by a court. A basic element in the calculation that the court must make therefore, is to identify, and if possible limit, the period of time during which any temporary regime must be in place.

  454. Here the plaintiff made a number of different claims which required determination in plenary hearing. This raises further difficulties for the analysis of the interlocutory injunction application because it is necessary to identify and analyse the differing arguments on the harm that will be occasioned by the grant or refusal of an injunction in respect of each different claim. The manner in which the Court has dealt with this case has however usefully sharpened the focus of the hearing. Thus as is recounted in more detail in the judgment of Clarke J., the Court fixed a time for the hearing of what might be described as the pure Crotty point, that is the argument that the ratification of the ESM Treaty was an impermissible ceding of sovereignty by the Government of Ireland and was accordingly something that could only be permitted by approval of the People in a referendum. This in the helpful terminology adopted by Clarke J. is the “sovereignty claim”. The Court heard the full appeal on that point on Tuesday 24th July. Not only was it a useful exercise in case management, since it allowed for focussed debate upon a single important issue, but this approach also had the effect of reducing the number of variables that the Court had to consider on the application for an interlocutory injunction: if the plaintiff’s Crotty argument had succeeded he would have been entitled to a permanent injunction and no issue of an interlocutory injunction would have arisen; conversely it was only if his Crotty argument failed, or was not determined, that it would be necessary to consider the interlocutory application but without reference to the Crotty issue. That is the basis upon which the argument proceeded, on the 24th. In the event, the Court announced its decision on the 31st July rejecting the plaintiff’s claim based upon Crotty. Accordingly the issue for this Court became whether an interlocutory injunction should be granted pending the final resolution of the remaining issues in the case.

  455. The most significant issues which remain are matters of EU law. The logical sequence of the issues might be first, whether the ratification by Ireland of the ESM Treaty as a stand alone international agreement is itself a breach of this country’s obligations under the Treaty Establishing the European Union (“TEU”) or the Treaty on the Functioning of the European Union (“TFEU”) (and hereafter collectively referred to as the “Treaties”) (“the ESM Treaty claim”). If not, the remaining questions are less relevant. If, however, ratification of the ESM Treaty is contrary to the Treaties, then a question arises whether the Treaties may be amended by a Council decision such as that contained in Council Decision 2011/199/EU, so to permit relevant member states to accede to the ESM Treaty. Finally, even if such amendment is permissible in principle, an issue would remain as to the validity of the individual decision particularly the use of the accelerated procedure (these two related issues are the “Council Decision claim”). The Court has decided that it was necessary, in conformity with Art.267 of the TFEU to refer questions to the European Court of Justice (“ECJ”) on these issues, and requested the Court to consider adoption of its accelerated procedure given the asserted urgency of the situation. The ECJ will hear argument on this issue on the 23rd of October. Accordingly, the question to be addressed on the interlocutory injunction application now becomes more limited again, both by reference to the legal issues in play (which are now largely matters of European law) and the period of time before a definitive answer can be given to those legal issues.

  456. In analysing the issues in this way, I do not lose sight of the argument made on behalf of the plaintiff that a breach of the Treaties is ipso facto a breach of the Irish Constitution because it is said that it is only to the Treaties in their unamended forms, that the Irish People have given approval in the Constitution, and to that extent the relevant treaties have become part of the constitutional law of Ireland. It is apparent however that this constitutional point is an entirely consequential one. It is completely dependent on, and follows ineluctably from, the European law argument. The alleged breach of the Constitution occurs because there is an alleged breach of the Treaties. The European issue is therefore logically anterior to the constitutional argument, and whatever that constitutional argument adds in terms of rhetoric and significance, it adds nothing in scope. Unless the European law argument succeeds the constitutional argument cannot succeed. It also follows, and this is important in the context of an interlocutory injunction application in particular, that if it is possible to remedy a breach of the European law, then the constitutional breach is also remedied. In my view therefore, and even assuming for the purposes of this stage of the argument that there is or may be merit in the contention that a breach of the Treaties is a breach of the Constitution (on which I express no view), it adds nothing to the calculation the court must carry out on an application for interlocutory injunction to say that the European law argument can also be framed in domestic constitutional terms.

  457. Finally an argument was also made, described helpfully by Clarke J. as the “power transfer claim”, to the effect that the European Stability Mechanism Act 2012, being the statutory mechanism utilised to implement the ESM Treaty in Irish law, involved an impermissible transfer of power from the Dáil to the Minister for Finance. However like Clarke J., I consider that this claim, whatever its merits, could not itself give rise to any plausible claim for an interlocutory injunction. On the assumption that all other more substantive claims failed but this succeeded, then the matter would be purely the method of implementation of the ESM Treaty, which is both capable of adjustment in accordance with any judgment of this Court, and as a purely domestic matter is in any event within the power of these courts. This in my view is fatal to any allegation of irreparable damage, which is the starting point for any claim for an injunction. Accordingly it is not necessary to address the question which might otherwise arise as to what considerations should apply to an application to restrain the operation of legislation, validly enacted and presumed constitutional, pending a trial, or as in this case, an appeal.

  458. The Court must therefore assess how best the situation should be managed pending the determination of these issues on foot of the reference to the European Court which will as a matter of a practicality resolve the European law points, and therefore in all probability, the litigation. It is argued by the Plaintiff that this was essentially the same task as faced the court in Crotty and it was pointed out that in a short judgment in that case (at p.763) the Supreme Court per Finlay C.J., granted an interlocutory injunction restraining ratification of the Single European Act, after the dismissal of the Plaintiff’s claim in the Divisional Court of the High Court, and pending the hearing of the Supreme Court appeal. It was also suggested that the appropriate test was that set out in the decision of the ECJ in Zuckerfabrik Süderdithmarschen (Case 143/88 and 92/89) [1991] E.C.R. 1-415 and restated in case Atlanta Fruchthandelsgesellschaft mbH v Bundesamt für Ernährung und Forstwirtschaft (Case 465/93) [1995] E.C.R. 1-3761 at p.3795 where it is provided that a national court should only grant interim relief with respect to a national administrative measure adopted in the implementation of a community regulation if:

  459. (1)

    that court entertains serious doubts as to the validity of the Community act and, if the validity of the contested act is not already an issue before the Court of Justice, itself refers the question to the Court of Justice;

    (2)

    there is urgency, in that the interim relief is necessary to avoid serious and irreparable damage being caused to the party seeking the relief;

    (3)

    the court takes due account of the Community interest; and

    (4)

    in its assessment of all those conditions, it respects any decisions of the Court of Justice or the Court of First Instance ruling on the lawfulness of the regulation or on an application for interim measures seeking similar interim relief at Community level.

    Some doubt was expressed as to whether this test differs in substance from the well known test in Campus Oil v Minister for Industry and Energy (No.2) [1983] I.R. 88. There may be cases in which it is necessary to address that point, and in particular to determine whether some higher threshold should be established before an injunction is granted restraining the implementation of a measure asserted to be invalid, but for the reasons as expressed by Clarke J., I consider it is possible to resolve this case by reference to the balance of convenience, or balance of justice as it is sometimes expressed.

  460. Counsel on behalf of the plaintiff also relied on the well known passage from Amministrazione delle Finanze dello Stato v Simmenthal SpA (Case 106/77) [1978] E.C.R. 629 at p.644:

  461. It follows from the foregoing that every national court must, in a case within its jurisdiction, apply Community law in its entirely and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it, whether prior or subsequent to the Community rule.

    Accordingly any provision of a national legal system and any legislative, administrative or judicial practice which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions which might prevent Community rules from having full force and effect are incompatible with those requirements which are the very essence of Community law ....

    The first question should therefore be answered to the effect that a national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provision by legislative or other constitutional means.

    The essence of the Plaintiff’s case was that he considered that what he described as respect for the rule of law required that the Court grant an injunction. It was said if the plaintiff was correct in his legal argument – and that was the assumption upon which the interlocutory injunction application must be approached – then ratification of the ESM Treaty would involve the creation of a permanent and irreversible arrangement that was itself a breach of EU law.

  462. The Plaintiff swore a detailed affidavit in support of his application. The thrust of the affidavit was to assert that unless an injunction was granted, the State would have entered into an irreversible binding commitment in international law, and the court would be deprived of jurisdiction to grant remedies in the event the Plaintiff succeeded. Furthermore the State would then be bound permanently to a breach of European law and consequently Irish constitutional law, and to financial commitments totalling €11.144 billion with the possibility of subsequent increases. The Plaintiff also referred to an unsuccessful challenge in the Estonian courts and a pending challenge in the German Constitutional Court, both of which appear to be by reference to provisions of the domestic constitutions. He also asserted that there was no particular urgency in ratification, because Ireland would be fully funded under the Memorandum of Understanding with the so called Troika, until the end of 2013.

  463. Counsel on behalf of the State for his part stated that he was expressly instructed that it was the unambiguous and unqualified view of the State parties, that should the ECJ find that the entry into the Treaty was a breach of European law, there would be a remedy at that level; indeed such a finding and declaration would be part of such a remedy. An affidavit had been sworn by Mr Jim O’Brien the second Secretary in the Department of Foreign Affairs asserting that irreparable harm would be caused to the interests of the State, and indeed those of the European Union, were Ireland not to be in a position to ratify the ESM as soon as possible. At paragraph 7 of his affidavit he stated:

  464. I say and believe that the need for the ESM is urgent, and it is the carefully considered view of the Government that it is essential in the national interest that Ireland should ratify the ESM Treaty as soon as possible. The Euro area member states and the European Union also have pressing interest in Ireland’s ratification of the ESM Treaty at the earliest possible opportunity.

  465. Counsel on behalf of the State sought to distinguish Crotty in three respects. First, he said there was not similar urgency involved in the ratification of the SEA, and the injunction was only granted for a number of days to permit the Supreme Court hear and determine the appeal in that case. Second, Crotty concerned an issue solely of Irish constitutional law. Third, and perhaps most importantly, it was asserted, and accepted by the Court in that case, that there was serious risk of irreversibility. If the SEA was ratified, the consequence would have been an amendment of the then applicable European Treaties which it was said would put the Treaty beyond constitutional challenge by virtue of the provisions of Article 29.4.3. That he asserted, was simply not the case here.

  466. Notwithstanding the vigour with which the case was made, and the skill and learning shown in the written submissions advanced, I have come to the conclusion that the application for an interlocutory injunction in this Court is profoundly misconceived. On every single consideration I am satisfied that the balance is decisively against the grant of such an order.

  467. First, I am satisfied that the analogy with Crotty is misplaced. Crotty was a truly exceptional case involving an issue of Irish constitutional law, and a view, which appears to have been accepted at least for the purpose of the application by the Court, that the decision to ratify the SEA would put it beyond any subsequent challenge. The question of the irreversibility of the measure was therefore central to the decision to grant the injunction in Crotty. Furthermore, the period of time involved was very limited, and a matter within the Court’s own control. Here by contrast the issue is one of European, rather than Irish, law and at its core is the capacity of members of the Euro area to enter into a separate ESM Treaty. In my view it is clear therefore that ratification pending the conclusion of the case would not put the ESM treaty beyond effective challenge at the level of EU law.

  468. Second, it follows from the foregoing that no irreparable harm would be caused, still less any irreparable harm to the plaintiff in these proceedings, if the injunction is not granted. If for example the ECJ considered that the ESM Treaty contravened the Treaties in some respect, then given the fact that every participant of a treaty in the ESM Treaty is a member of the EU and is bound by the decisions of the ECJ, it would clearly be within the power of the EU, whether alone or in conjunction with the national courts, to secure compliance with what it had determined to be the true interpretation of the Treaties and the obligations of the relevant member states. Indeed it would be the duty of the participant countries to conform to the law as so declared. That would be the application of the principle in Simmenthal rather than a breach of it.

  469. Third, on the assumption that an effective declaration of invalidity might indeed be made even after ratification, the Plaintiff nevertheless argued that steps could be taken quite quickly on foot of ratification such as calls for capital, borrowing on foot of that, and even advancement of loans, which might be difficult to reverse. It was emphasised that the sums involved were enormous. Even allowing this I do not consider that this compels the grant of an injunction. First, it is not beyond the power of courts, whether at national or EU level, to require steps taken to be reversed if it is considered necessary to bring parties in to conformity with the requirements of the law. Furthermore, the Plaintiff has never expressed himself to be opposed to the advancement of particular monies to particular countries. His objection, repeatedly stated during this case, lay at the level of principle, and was to a permanent mechanism with the possibility of a requirement for further funding from this country. Notably, he has not challenged, and apparently has not raised any complaint about, the EFSF mechanism which has been in place since May 2010, and made considerable disbursements thereafter, and which the ESM is intended to replace. It follows, that in the event that the plaintiff should succeed in these proceedings pursuant to the reference to the ECJ, then the ESM in its current form would be brought to an end, and would have had a lifetime much shorter than that of the EFSF. Accordingly, in such an event, neither Mr Pringle, nor the interests he asserts, would have suffered any irreparable harm, or indeed any harm at all.

  470. Fourth, it must be recalled that the point which now remains in this case is an issue of pure European law equally applicable in theory in every country throughout the European Union. However, if the Plaintiff were to succeed and if an injunction were to be granted, the effect would only be that Ireland would not ratify the Treaty. Such an injunction would not restrain approval by other Member States, or indeed the coming in to force of the ESM, which is the object Mr Pringle seeks to achieve. The remedy of an injunction would therefore produce the worst of all outcomes even if temporary: it would run the risk of causing the harm to the defendant’s interests which they apprehend without benefiting the plaintiff’s interest in any material way. If the plaintiff were ultimately to succeed, that would have the same impact across the Eurozone. Pending such a decision there is no compelling reason why Ireland should not be in the same position as its European partners.

  471. A fifth consideration is that as set out in Zuckerfabrik, which requires that the interests of what was then the Community (and now the Union), should be taken into account. The domestic concept of the balance of convenience is I think sufficiently flexible to take such a consideration into account. It seems apparent that the interests of the Union weigh heavily against the grant of an injunction at this stage, since the only certain consequence of such an order is further uncertainty in an already volatile financial world. Furthermore it does not appear that any other citizen of the EU has commenced a challenge to the ESM on grounds of European law. The citizenry of the Union have interests and rights which would be affected, perhaps severely, by the grant of an injunction. In circumstances where the Plaintiff’s case is not compelling, and where the outcome of any order is unpredictable, I consider that the interests of the Union lie against any temporary order under which the interests of the wider citizenry of the Union and the Eurozone in particular might be affected, without the possibility of representation in the proceedings, or remedy should the proceedings ultimately fail.

  472. Finally, there is in my view, a real risk of irreparable harm to the defendants if an injunction is granted. It cannot be ignored that an affidavit has been sworn by a high official in that Department of Government which exercises the Executive function in the conduct of foreign affairs. That duty is consigned solely to the Government pursuant to Article 29.4, of the Constitution subject only to the Government’s accountability to the Dáil (of which, it might be observed, the Plaintiff is a member) pursuant to Article 28.4.1. Mr O’Brien has sworn that it is the considered view of the Government that it is essential in the national interest not just that Ireland ratify the Treaty but that it do so as soon as possible. If ratification is prohibited by order of this Court , then it follows that the national interest, at least in the view of the organ entrusted with the sole power to conduct international relations and which for good measure manages the State’s economic affairs, is necessarily damaged. Furthermore, that particular damage is irreparable. If the injunction sought is granted, then the one thing that cannot be done, and can never be done whatever the subsequent outcome of this case, is that Ireland should proceed to ratify the Treaty at that time which the body entrusted with that decision had decided it was in Ireland’s national interests to do so. It is manifest that there is nothing that the plaintiff or indeed this Court could do to remedy that damage. It is also truly remarkable that on this application the courts should be invited simply to disregard that stark statement, and to accept instead the assertion of the plaintiff, who lacks both the constitutional function and it appears any professional expertise to make such a judgment, that Ireland is fully funded until 2013 and that therefore no damage will be done to Ireland’s national interest by a delayed ratification, even if it should later transpire that such ratification would have been perfectly lawful.

  473. This leads me to a consideration which appears to have been largely overlooked in the plaintiff’s analysis, but which in my view is also decisive. In Crotty, in the course of a short judgment granting the injunction, Finlay C.J., with whom all other members of the court agreed, recognised that in the constitutional context the balance of convenience was exceptional and considerations different to those of the ordinary injunction applied. The very fact that the plaintiff does not even address the question of an undertaking as to damages, normally a sine qua non of the grant of an injunction in private law is perhaps an acknowledgement, albeit tacit, of the accuracy of this observation. In the plaintiff’s determination to challenge the wisdom and legality of the Government’s decision, he appears to give no weight to the fact that it is a decision made by the Government. That is the body to which the Constitution has allocated the task of making such decisions whether trivial, important, wise, or profoundly misguided. Here the Court is invited to restrain the exercise of constitutional function by a body authorised to carry out that function, and in respect of which function the Constitution imposes little in the way of express limitation, and contemplates direct accountability to the Dáil and indirectly the People, rather than to the courts. Indeed, in one sense this case goes further. It has been asserted, in my view plausibly, that it is in the national interest for Ireland not only to ratify the ESM Treaty, but to do so as soon possible. No one can be unaware of the importance of speed and the unpredictable consequences of delay in such matters. Time therefore is more critical in the context of this application than even in Crotty, where it might be said that Ireland’s national interest would be protected by ratification within a reasonable time. A court requested to grant an injunction in circumstances such as this , is faced with a form of zero sum calculation. It is not possible to freeze the time for making this decision. Events, both in Ireland and elsewhere, will move on. Accordingly, if the decision cannot be made to ratify the Treaty immediately, then that is, in effect, a decision not to ratify the Treaty immediately. The question then becomes not just what decision should be made but who should make it, even temporarily. That is a question on which the Constitution gives clear guidance. The Constitution makes that decision one for the Executive branch and does not confer that function upon either this Court, or any individual plaintiff. The fact that the decision may be momentous does not alter the constitutional allocation. Governments are elected to make decisions whether trivial or momentous successful or catastrophic, and for those decisions they are answerable to the Dáil, and through it to the People.

  474. Accordingly, this case presents in a particularly acute way an invitation to the Court, which is itself obliged to ensure that the functions of the other constitutional bodies are exercised within their proper sphere, not just to prevent what is, on its face, a performance of constitutional function by the body to which the Constitution has allocated that function, but also to become, however temporarily, a participant in the exercise of the function. This is something which in the general sphere, a court is correctly, reluctant to do. For example a court simply will not interfere with the legislative process prior to the enactment of legislation, no matter how plain the alleged defect is: Wireless Dealers’ Association v Fair Trade Commission (Unreported, Supreme Court, 14 March, 1956). Once enacted, and the Legislature has performed its function, the legislation may be challenged. The exercise of the State’s exercise in foreign affairs may be somewhat different, because it can occasionally carry with it the prospect of a decision being implemented and immunised, and effectively put beyond contest, review or remedy. But that should not obscure the fact that fundamentally, a court should be very slow to take a step which may involve effectively substituting its decision even if only temporary and suspensive , for that of the Government in matters of foreign affairs. Accordingly, in my view, the proper functioning of the constitutional balance requires that considerable weight indeed should be accorded to the constitutional interest in ensuring that the Government performs the executive functions assigned to it in the way it considers appropriate and for which it is accountable in the first place to the Dáil and through it to the People. The constitutionality of the measure can still be challenged after it has come into effect. There may be cases which are particularly clear and strong, and which are attended by considerations such as unreviewability, immunity and urgency. It is not necessary or indeed wise to anticipate such eventualities. It is enough to say, that this case is decidedly not one such. Here, the balance of convenience, on any view, weighs heavily against the grant of an injunction. The Plaintiff’s claim has been addressed with considerable expedition, in the High Court, this Court, and the ECJ. That process will provide a very speedy resolution of the issues raised by the plaintiff. Pending the final outcome of those proceedings the challenged measures, both at domestic and EU level, remain in place. In my view that is the appropriate, and certainly preferable, way to the address the Plaintiff’s concerns.

    Justice O’Donnell

  475. I gratefully adopt the account of both the procedural history of this case, and the nature and effect of the European Stability Mechanism Treaty (“the ESM Treaty”) contained in the judgments of Denham C.J. and Clarke J. with which judgments I am in full agreement.

  476. The central issue in this case is whether or not entry into an international treaty containing provisions such as those contained in the ESM Treaty, could contravene the constitutional limitations on the exercise of Executive power in the field of foreign affairs identified in Crotty v An Taoiseach [1987] I.R. 713. The plaintiff’s case in this regard was that the ratification of the ESM Treaty was a momentous decision on the part of the Irish Government involving a potential liability of up to €11.1454 billion by way of contribution to a fund totalling some €700 billion for the express purpose of securing the stability of the Eurozone, or any member thereof, in circumstances where the allocations from the fund could, at least in certain circumstances, be made by a qualified majority of the contracting states which might not include Ireland, either because Ireland disagreed with the allocation or was excluded from voting.

  477. It was argued that the essence of the decision in Crotty was to be found in a passage of the judgment of Walsh J. at p.781 in which he said:–

  478. As was pointed out in the decision of this Court in the first part of this case the essential nature of sovereignty is the right to say yes or to say no. In the present Treaty provisions that right is to be materially qualified.

    The reference to the first part of the case was to the single judgment of the Court delivered by Finlay C.J. upholding the constitutionality of the European Communities (Amendment) Act 1986, which had brought into force those elements of the Single European Act (“the SEA”) which did not involve foreign affairs. It was argued therefore, that the ESM Treaty was an unconstitutional fettering of Irish sovereignty because, to put it at its simplest, the ESM (including Ireland’s contribution) could be applied in circumstances in which Ireland might not agree. It was argued that this could not be permitted other than by a decision of the People in a referendum, akin to the provisions of the third amendment inserting Article 29.4.3 which permitted the State to become a member of the European Communities.

  479. There can be little doubt that if the essence of sovereignty, at least as contemplated by the Irish Constitution, is to be understood as meaning that Ireland fetters its sovereign right to decide by joining any organisation which acts collectively, or at least one in which Ireland does not retain a veto (and therefore the right to say no), then the ESM Treaty would be of dubious constitutional validity, along with, it must be said, many other important international agreements. However, judgments are not to be read in the same way as statutes. A single sentence in a judgment rarely encapsulates the essence of a lengthy judgment, and a judgment of one judge, even one as eminent and influential as Walsh J., is not to be taken, in isolation, as stating the ratio decidendi of a case. There is always a danger of substituting the invocation of a vivid and memorable phrase for the analysis of the substance of a judgment. Like Denham C.J. and Clarke J., and those of my colleagues concurring with those judgments, I am quite satisfied that the plaintiff’s arguments here involve a clear misunderstanding and misinterpretation of Crotty, but perhaps more importantly, of the Constitution.

  480. The provisions of the Constitution dealing with the exercise of Executive power in the field of foreign affairs were closely analysed in the judgments in Crotty and particularly in those of Barrington J. in the High Court and Finlay C.J. and Walsh and Henchy JJ. in the Supreme Court. It is indeed a distinctive feature of the Constitution adopted in 1937 that it deals with external relations at all. The historical background is usefully discussed in a Thomas Davis lecture delivered by Mr. Justice Barrington in 1988 entitled “The North and the Constitution” (published in Farrell ed., De Valera’s Constitution and Ours, (Dublin: Gill & Macmillan, 1988)), which pointed out that in 1936 when the Constitution was being drafted, Mr de Valera was President of the League of Nations and that some of the values of the Covenant of the League of Nations were clearly reflected in the Constitution itself and in particular in Article 29. It is also noteworthy that the provisions dealing with the conduct of foreign affairs, and particularly the extent to which there was to be review of the Executive’s conduct in such matters and the identification of the body exercising such power of review, were the subject of very carefully drafted, nuanced provisions, clearly influenced by, and consistent with, other aspects of the architecture of the Constitution. Thus it is noteworthy that the Constitution contemplates that the Government may enter into international agreements and then divide those agreements into a number of types, with different constitutional consequences. All international agreements must be laid before the Dáil under Article 29.5 (and it is to be noted, only the Dáil and not the Oireachtas generally), consistent with the Government’s answerability to that house under Article 28.4.1. Any agreement which goes further and involves a charge on public funds (other than an agreement of a technical or administrative character), must be approved by the Dáil, again consistent with that body’s distinct role in financial matters reflected in Articles 17, 20, 21, 22, and 28.7. Finally, in this regard no international agreement may become part of the law of the State save as may be determined by the Oireachtas as a whole pursuant to Article 29.6, a provision which is once again consistent with the vesting in the Oireachtas of the sole and exclusive power of making laws for the State under Article 15.2.1. From these provisions may be drawn the unremarkable conclusion that the Constitution contemplates that the conduct of the State’s foreign relations will necessarily involve the making of binding agreements with other states, which agreements could have financial consequences for the State, and on occasions require an alteration of its domestic law.

  481. Among the other relevant provisions of the Constitution dealing with foreign affairs is the specific requirement that war may not be declared save with the assent of Dáil Éireann (Article 28.3). This is striking because it appears to be the single incidence in which the Executive power in the field of foreign affairs is restricted by a requirement to obtain the prior agreement or concurrence of any other body, but equally significant for present purposes in that the assent of the Dáil alone is required. Not only is there not a requirement of approval by the Oireachtas generally, but there is clearly no requirement for direct approval by the People. The more general and rarely litigated provisions of Article 29 are also instructive in this regard. Ireland’s affirmation of its devotion to the ideal of peace and friendly cooperation, and adherence to the principle of pacific settlements of international disputes by international arbitration and judicial determination, together with its acceptance of the generally recognised principles of international law, may all appear unremarkable today, but were significant and far sighted provisions in 1937. It can be deduced from these constitutional provisions, at a minimum, that the Constitution clearly anticipated the Executive power could and would involve the making of binding agreements with other nations, and that Ireland might become involved in disputes which themselves might be resolved by a process involving a binding determination by which Ireland would be obliged to abide. Article 29.4.2 is a little discussed provision nowadays, being seen as of largely historically interest. However, it again clearly envisages that in its conduct of foreign affairs, Ireland could adopt mechanisms utilised by members of any group or league of nations with which the State could become associated for the purposes of international cooperation. This again contemplates that the business of the conduct of foreign affairs might necessarily involve the making of agreements with foreign States, cooperation with, and membership of, international bodies, and occasionally, and regrettably, the possible occurrence of disputes including the commitment of the State to a war.

  482. While these explicit provisions are instructive, they very deliberately impose little by way of judicially enforceable restriction on the substantive exercise by the Executive of its conduct of foreign relations. Article 29.4 makes it clear that it is the Government which shall conduct external relations and by its reference to Article 28 emphasises that in that respect, the Government is responsible to the Dáil. That is the method the Constitution envisages for review and control of the exercise of the Executive power in the conduct of foreign relations. The courts have repeatedly affirmed their limited role in the review of Governmental activity in the field of foreign affairs. In Crotty at p. 774, Finlay C.J. said that:–

  483. There is nothing in the provisions of Articles 28 and 29 of the Constitution, in my opinion, from which it would be possible to imply any right in the Courts in general to interfere in the field or area of external relations with the exercise of an executive power.

    At p. 777, Walsh J. said, to similar effect:–

    It is the Government alone which negotiates and makes treaties and it is the sole organ of the State in the field of international affairs.

    [emphasis added]

  484. The courts’ function in this regard is to enforce those boundaries of, and limitations to, the exercise of the Executive power in foreign relations which are either express in, or to be implied from, the constitutional text, and at the same time to reject any attempt to impose limitations on Governmental conduct of foreign relations not justified by the Constitution. The State (Gilliland) v The Governor of Mountjoy Prison [1987] I.R. 201 is a rare example of the enforcement of an express limitation in the Constitution where a treaty was found to involve a charge on public funds which had not been approved by the Dáil. Crotty is an example of a limitation derived from the structure of the Constitution itself. Since it is to the Government alone that the conduct of foreign affairs is consigned by the Constitution, it follows that such international relations must be conducted by the Government, which cannot abdicate, alienate, transfer or subordinate its functions to any other State or body.

  485. Returning then to the present case, it is clear that the plaintiff’s argument places considerable reliance on the single sentence from the judgment of Walsh J. referring to the right to say yes or no in order to contend that an agreement such as this, which creates at least the possibility of decisions being made on the allocation of ESM funds without Ireland’s agreement, is unconstitutional. In my view, that contention is profoundly misconceived on a number of levels.

  486. It seems clear to me that even in the very specific context in which the words are used, they should not be understood in the manner contended for. As already observed, Walsh J. referred back to the single judgment of the Court on the European Communities (Amendment) Act 1986 when he repeated the phrase that the essence of sovereignty was the right to say yes or no. The source of that observation was a portion of the judgment of Finlay C.J. at p. 769. That judgment however, upheld the 1986 Act which implemented the provisions of the SEA which took effect in domestic law on the grounds that the original licence granted by the People to join the European Communities was a licence to join a dynamic and developing entity. Therefore, incremental changes in European institutions within the scope of the existing licence did not require further express approval by the People. But one of the most significant changes challenged was the adoption by the Community of qualified majority voting rather than unanimity in certain cases. In each such case the consequence of the change was that Ireland (and necessarily every other member state) lost its veto: in specific terms, Ireland lost the right, in those circumstances, to say no. Yet that change was not incompatible with the Constitution. That in itself is a powerful indicator that the single phrase, vivid though it may be, cannot be read in the simplistic way put forward by the plaintiff in this case.

  487. That conclusion becomes even clearer when the judgment of Walsh J. is looked at as a whole in the context of the case. As Clarke J. points out in his judgment, the essence of the decision of the majority is to be found in a series of passages in the majority judgments. For example, and perhaps most clearly, in the judgment of Henchy J. it is stated thus at p.787:–

  488. It follows, in my view, that any attempt by the Government to make a binding commitment to alienate in whole or in part to other states the conduct of foreign relations would be inconsistent with the Government’s duty to conduct those relations in accordance with the Constitution.

    Hederman J. at p. 794 considered that the essential point was that the State could not “.... enter into binding agreements with other states, or groups of states, to subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interests of other states ....”

    These statements are clearly consistent with the judgment of Walsh J. at p. 778 where he said:–

    It is not within the competence of the Government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered to do so by the Constitution.

    Similarly, at p. 783 he said:–

    In enacting the Constitution the people conferred full freedom of action upon the Government to decide matters of foreign policy and to act as it thinks fit on any particular issue so far as policy is concerned and as, in the opinion of the Government, the occasion requires. In my view, this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures, and so to bind the State in its freedom of action in its foreign policy.

    In my view, the words “abdicate”, “alienate”, “subordinate” and indeed also “transfer” contain the essence of what was considered impermissible in Crotty.

  489. This conclusion is I think, consistent with a fair reading of the case as a whole, and in particular when considered in the light of what was in issue between the parties. In the Supreme Court, the State parties had taken up an absolute position – that the Government’s exercise of the Executive function of making treaties could never be the subject of judicial scrutiny – which was rejected by the entirety of the court. What divided the court itself was a narrower issue and essentially one of timing. There was little disagreement on the fundamental legal principle. The minority, comprised of Finlay C.J. and Griffin J. accepted that if the SEA created a form of political union then there could be no doubt that, in the words of Finlay C.J. at p.771 :–

  490. .... it would constitute an alteration in the essential scope of and objectives of the Communities to which Ireland could not agree without an amendment to the Constitution.

    However the minority considered that this point had not yet been reached. The majority for its part, in the words of Henchy J., considered that the SEA was a significant and decisive step along a path of gradualism towards that objective. There was no dispute therefore that to agree to adopt a single European foreign policy would be inconsistent with the Irish Constitution since the Irish Government would no longer be exercising that power alone. The question which did divide the Court was whether that point had been reached.

  491. I accept of course that there are elements of the judgment of Walsh J. which if taken out of both their specific, and general, context might suggest that it is not possible for the Government to enter into any international agreement which precludes it from saying no at some future stage, and that such freedom of action is of the essence of sovereignty. For a number of reasons I do not consider that the judgment should be so understood, and still less that such a test can be asserted to be part of the ratio decidendi of the case as a whole, or indeed could provide any workable test that is consistent with history, common sense, or the structure of the Constitution.

  492. First, for reasons already identified, the issue in Crotty was not the question now raised as to whether the essence of sovereignty is to be found in an obligation not to alienate or abdicate the power to make foreign policy generally, or alternatively, in maintaining a complete freedom of action in the future in respect of any individual decision. The issue which divided the parties in Crotty was whether or not the courts could enforce any limitation on Governmental activity in the field of foreign affairs. The issue which divided the Court was not whether the creation of a European wide foreign policy would be an alienation of Irish sovereignty, but rather whether such a development had occurred.

  493. Second, as Clarke J. points out in his judgment, any agreement made by a country or an individual almost necessarily limits the freedom of the parties. It certainly restrains the party from saying no to what has been agreed. Furthermore, in many cases the entry into an agreement may also create restraints on the freedom to enter into any inconsistent agreement. It is indeed in the nature of international relations, and expressly contemplated by the Constitution, that states will make treaties, enter into trade agreements, form alliances, join groups and assist in the setting up of international bodies with agreed mandates and which on occasion may have adjudicative functions. There is no sense in which Ireland or any other state can remain completely free to say no, once it has entered into any such agreement, alliance, grouping or body. It is the decision to enter into an agreement or alliance which is the exercise of sovereignty. Indeed as a matter of history, Ireland was a member of the League of Nations at the time that the Constitution was adopted, and in the early years of the Constitution’s life became a member of the United Nations (1955), subscribed to the World Bank and International Monetary Fund (“IMF”) (1957), became a member of the Council of Europe (1949), and accepted the jurisdiction of the European Court of Human Rights (1959). To take only one example, it cannot be suggested that Ireland retains a freedom not to abide by sanctions imposed by a UN resolution, even if Ireland considered that the sanctions were misguided, or that it stood to gain considerably by continuing to trade with the State in question. I do not see however, that that involves any loss of sovereignty: indeed I consider that the Constitution contemplates matters such as membership of the UN as an exercise in the sovereignty of a small country which at the time of the adoption of the Constitution was anxious to secure international recognition of its status as a nation. It is entirely inconsistent with the Constitution, and in particular the first two sub articles of Article 29, to conceive of Ireland being obliged to adopt a position of splendid isolation from other countries so that it could only engage in agreements in which Ireland (perhaps alone) insisted upon a veto over all future decisions, and indeed the right to resile from decisions already made and matters already agreed. The fallacy is perhaps to conceive of the breadth of the power accorded to the Government in the field of foreign affairs as amounting itself to a constraint: on this reading the Government only has freedom of action so long as it does not use it. Quite apart from the fact that such a conception makes little sense, and has not historically been the position taken by the State in the field of foreign affairs, it also appears to me to be inconsistent with what is explicitly contemplated both by the words and structure of the Constitution.

  494. The understanding of Crotty, contained in the judgments of Denham C.J. and Clarke J., is I think, fortified by a consideration of the underlying concept of sovereignty, and particularly the manner in which such sovereignty is expressed in the 1937 Constitution. The concept of sovereignty was traditionally defined as containing not just the positive requirement of a political superior to whom the population was in the habit of obedience, but also, and importantly for present purposes, the negative requirement that such superior owe no obligation of obedience to the dictates of any other body. Thus, John Austin famously asserted in The Province of Jurisprudence Determined (London: Weidenfeld & Nicholson, 1954) at p.193 that:–

  495. The superiority which is styled sovereignty, and the independent political society which sovereignty implies, is distinguished from other superiority and from other society by the following marks or characters –

    1.

    The bulk or the given society or the habit of obedience or submission to a determinative and a common superior: let that common superior be a common individual, or a certain body or aggregate of individual persons.

    2.

    That certain individual or that certain body of individuals is not in a habit of obedience to a determinative human superior.

    [emphasis added]

    Such a sovereign can of course enter into binding alliances with other sovereigns, even those which commit their respective countries to war. However a ruler cannot be a sovereign if he or she habitually acts in obedience to the wishes of another body or person, or to use the language of the majority judgments in Crotty, abdicates, alienates, subordinates or indeed transfers its decision making power to that body. This is, I think, consistent with the use and understanding of the word “ceannasach” used in the Irish text of the Constitution.

  496. Sovereignty, as being a condition of owing no allegiance or duty of obedience to any other entity, is, in my view, asserted very deliberately by the 1937 Constitution, and for obvious reasons, once the historical context is recalled. The new polity being established, in essence although not in name a republic, was one that consciously asserted all the attributes of sovereignty. This was a very deliberate contrast with even the expanded Dominion status which had existed prior to 1937. The Constitution reflected a fundamental truth as to the source of the sovereignty of the State, namely the people. The legal source of the Constitution was to be the decision of the People rather than a grant by a foreign Parliament. The preamble to the Constitution records that it came into being by virtue of the declaration that the people “Do hereby adopt, enact, and give to ourselves this Constitution.” Accordingly, Article 1 states that “The Irish nation hereby affirms its .... sovereign right to choose its own form of Government ....” Consistent with this assertion of sovereignty, Article 6 declares that “all powers of government, legislative, executive and judicial” derive from the people. Among the key attributes of such sovereignty was the right to conduct international relations on an equal basis with other countries and the exclusive exercise by the organs of government of the powers of government.

  497. Both Clarke and Hardiman J.J. have, in their judgments delivered today, emphasised that the Constitution recognises the exclusive powers of the Legislative, Executive and Judicial branches, within their proper spheres. This is of course true. But it is perhaps noteworthy, as the late Professor Kelly was wont to observe, that the form of separation of powers adopted in the Irish Constitution was not the hermetically sealed branches of Government posited by Montesquieu, but rather involved points of intersection, interaction and occasional friction between the branches of Government so established. Thus, by way of illustration only, the Executive appoint the Judiciary and the courts rely on the Executive to execute their judgments; the courts for their part review the acts of both the Legislature and the Executive for compatibility with the Constitution; and the Executive in turn is accountable to the Dáil and in practice commands it; and the members of the Government are required to be drawn from the Legislature. In the architecture of the 1937 Constitution therefore, the respective branches did not exclude each other entirely. On the other hand however, the Constitution did assert the exclusive right of those organs to exercise their respective powers of Government, as against any executive, legislative or judicial competitor, internal or external. Again, the historical context makes this clear. Not only did the new State face an internal challenge from groups seeking to deny it legitimacy and assert their own title to govern, but perhaps even more significantly, the legal status of a dominion (which was how Ireland was viewed by the United Kingdom) was such that the Imperial Parliament still claimed, at least in theory, the right to legislate for Ireland (a claim contained in s.4 of the Irish Free State Constitution Act 1922); the army and navy of the United Kingdom still occupied the Treaty Ports, and the entitlement of the Privy Council to hear appeals from the Irish Supreme Court had only recently been removed in Ireland. This, then, was a very real context in which the exclusive power of the organs of Government was being asserted in the Constitution alongside the assertion in Article 29 of Ireland’s entitlement to take its place among nations and conduct international relations with them. Thus at the very outset of the Constitution in Article 1 it is stated:–

  498. The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.

    [emphasis added]

  499. To the same effect are the statements in Article 28 that the Executive power is exercised by the Government (and it follows by no one else); in Article 34 that justice is administered in courts (and nowhere else), and in Article 15.2.1 that the Legislature has the “sole and exclusive” power to make laws for the State adding for good measure that “no other legislative authority has power to make laws for the State”.

  500. The interesting historical background to the late adoption of the words “sole and exclusive” in Article 12 of the Constitution of the Irish Free State, 1922, and the addition in 1937 of the words “no other legislative authority has the power to make laws for the State” contained in Article 15.2.1 is reviewed in Morgan, The Separation of Powers in the Irish Constitution, (Dublin: Roundhall, 1987) at pp. 262-263, and in Hogan, The Origins of the Irish Constitution: 1928-1941, (Dublin: RIA, 2012) at p. 335, which provide additional historical support for the conclusion contained in the judgment of Keane J. in Laurentiu v Minister for Justice [1999] 4 I.R. 26 at p. 83 that; “Historically, this Article can be seen as an uncompromising reassertion of the freedom from legislative control by the Imperial Parliament at Westminster of the new State”. But this conclusion is in my view also apt, mutatis mutandis, for the assertion of executive and judicial power in the new Constitution.

  501. Returning then to Crotty it is perhaps clear why the majority considered that the SEA was at the very minimum a “subordination” of Irish sovereignty. In the first place it is plain that the provision affected the entirety of the foreign policy of the State and not simply one area of agreed cooperation. Once enacted, such foreign policy would no longer be made by the Government alone but would be arrived at under a requirement of convergence with the policy of other member states. Seen in this way it is perhaps easy to see why it was claimed that the Executive power of the State in relation to the entirety of its foreign policy was being subordinated, and at least to some extent alienated and transferred, and to that extent abdicated. Ireland would no longer make its own determination of its relationship with other states, to use the language of Article 1, but would make decisions in the light of an embryonic collective foreign policy into which other countries would necessarily have an input. There would therefore have been, to that degree, a diminution of the sovereignty asserted and established under the Constitution, and effected without the assent of the People.

  502. This also demonstrates in my view why the provisions of the ESM are distinct from, and in constitutional terms markedly less significant than, the provisions of the SEA. The ESM does not concern Ireland’s foreign policy as a whole. Instead it relates solely to a decision by Ireland to invest, alongside other member states, in an institution which may make those funds available in accordance with the terms and criteria established by the Treaty, to contracting states, including Ireland. The decision to participate in the ESM was in my view an exercise in sovereignty rather than an alienation of it, and was taken by the organ of Government to which such decisions are consigned by the Constitution. In one sense it is a one off decision by Ireland to invest up to a defined maximum pursuant to a scheme which prescribes the countries to whom funds can be lent, the procedure under which any decision to lend will be made, and the criteria for such a decision. It is no more a breach of Irish sovereignty asserted under the Constitution and defended in Crotty, than a person who decides to invest a large portion of his or her wealth in a limited company with a defined investment objective could be said to lose his or her status as a citizen.

  503. There is no doubt that the figures involved here are very substantial and the decision to ratify the ESM is one which may have significant consequences for the Irish economy, but the quantum of a decision does not alter the identity of the actor required by the Constitution to make the decision. As a matter of history, Irish Governments have expended very considerable sums indeed in, for example, the education and health sectors, pursuant to departmental circulars, and without even the benefit of legislation still less the approval of the People in referenda. In more recent times, Governments have made decisions involving both the expenditure and borrowing of enormous sums of money. In none of these cases has it been suggested that the approval of the People in a referendum is required. Under the Constitution, Governments are expected, and required, to make decisions which on occasion may be momentous, including indeed the declaration of war, albeit in that case with the agreement of Dáil Éireann. In my view there is no reason to conclude that the decision to join the ESM is not one within the Executive power of the Government for which it is answerable to the Dáil.

  504. In my view this approach also demonstrates why it is not possible to read the majority decision in Crotty as requiring that individual decisions made by the Government in the field of foreign policy must, if they are to be valid, make provision for future decisions to be made by unanimity or alternatively, accord to Ireland alone a veto over any such future decision. First, it is plain that no such individual decision was in issue in Crotty: on the contrary, the case concerned the requirement to bend Ireland’s foreign policy in general towards a common European policy. For the reasons already set out, I do not consider that any such supposed principle could be required by the Constitution, and in my view it is not required by Crotty. There is nothing in Crotty, or indeed in logic, to suggest that the concept of sovereignty contained in the Irish Constitution requires that Ireland, while it may enter into agreements, must insist that it retain the capacity to change its mind. Even if the judgment of Walsh J. in Crotty could be interpreted differently (and for the reasons already set out, I do not accept that that is the case), there is in my view no basis for attributing to that judgment, still less a phrase from it, a position of primacy within the case. The ratio decidendi of a decision made by a collegiate court is in my view to be determined by that proposition, or reason, which decides the particular case and on which, it can be said, a majority of the court is agreed. In my view that ratio decidendi is that already set out above, and as addressed in the judgments of the Chief Justice and Clarke J.

  505. This is sufficient to dispose of the centre piece of the plaintiff’s case. But it is also suggested that the ESM is not compatible with the Irish Constitution at least without the approval of the People in a referendum, on two interrelated grounds: first, that it involves Ireland committing a very large of sum of money to be expended by a body outside the Irish legal order; and second, in reliance on dicta contained in the judgment of Henchy J., that it involves an expenditure of monies for a purpose quite different from that of furthering the common good of the People of Ireland. It is necessary to consider these points separately.

  506. It is true that the ESM fund, including that portion subscribed by Ireland, may be expended outside the territory of Ireland. But it is commonplace for public funds to be extended to, and expended by, bodies outside the Irish legal order whether under the guise of overseas aid, specific grants in cases of national emergencies, or subscriptions to international bodies such as the IMF, the World Bank or any international body. In my view, what the Constitution requires is that the decision to subscribe such funds should be taken by the correct organ of Government on its own, and not in subordination to any other body. That decision cannot be transferred, alienated or abdicated to another body. The relevant decision however is the decision to subscribe the funds for an identified purpose. Here that decision was made by the appropriate organ of government, in accordance with the procedures, and accountability, provided for in the Constitution.

  507. Second, I very much doubt that the judgment of Henchy J. is to be understood as suggesting that the courts can review the actions of the Government in the field of foreign relations and if appropriate restrain Governmental action on the grounds that the Court considers, by some standard not identified, that the action or agreement is not in pursuance of the common good of the Irish People. I consider that this portion of the judgment of Henchy J. is really an illustration of the central holding that the SEA, if enacted without constitutional amendment, would involve Ireland in an impermissible alienation or subordination of Governmental authority since the Irish Government would by definition have to take account of considerations outside Ireland’s national interest. To borrow a concept from administrative law, the Irish Government would, to that extent, be making decisions by reference to a consideration which was constitutionally irrelevant and indeed impermissible. I do not think that this could be taken, without much more elaborate and detailed argument and consideration, as an authority for the proposition that the Court can review individual decisions of the Government on the grounds that the decision to adhere to any particular international agreement are not within the interests of the common good of the People of Ireland. Such a proposition would raise very serious issues indeed as to the standard of review and, more fundamentally, the constitutional justification for it. But it is not necessary to address and resolve such issues here because in my view, it is very clear that the Government was fully entitled to conclude that it was in the national interest of Ireland, a country whose currency is the euro and which has suffered significant financial instability, to enter into an agreement which provides for support of the Eurozone generally, or for the economies of individual countries therein. In the circumstances I would dismiss the appeal on this issue.

  508. Interlocutory Injunction

  509. The plaintiff’s application for an interlocutory injunction was refused by Laffoy J., for reasons set out at section VII of her judgment. That decision has been appealed to this Court. However, although formulated as an appeal against the refusal of the injunction by the High Court, the application here was in substance a fresh application for an interlocutory injunction pending the determination of the appeal, akin to that granted by the Supreme Court in Crotty, after the refusal by the Divisional Court of the plaintiff’s claim, and pending the hearing of the appeal by the Supreme Court. See: Crotty v An Taoiseach [1987] I.R. 713 at p.763.

  510. Much jurisprudence has grown up around the grant of interlocutory injunctions. Such orders can be of very considerable, and sometimes decisive, significance. The grant of an interlocutory injunction is often a difficult decision particularly in the field of public law. That difficulty becomes more acute where, as here, matters of fundamental constitutional significance both in relation to Bunreacht na hÉireann, 1937 and the Treaties establishing the European Union are asserted. Nevertheless an injunction remains a flexible remedy designed essentially to control a temporary situation pending the final determination of a dispute by a court. A basic element in the calculation that the court must make therefore, is to identify, and if possible limit, the period of time during which any temporary regime must be in place.

  511. Here the plaintiff made a number of different claims which required determination in plenary hearing. This raises further difficulties for the analysis of the interlocutory injunction application because it is necessary to identify and analyse the differing arguments on the harm that will be occasioned by the grant or refusal of an injunction in respect of each different claim. The manner in which the Court has dealt with this case has however usefully sharpened the focus of the hearing. Thus as is recounted in more detail in the judgment of Clarke J., the Court fixed a time for the hearing of what might be described as the pure Crotty point, that is the argument that the ratification of the ESM Treaty was an impermissible ceding of sovereignty by the Government of Ireland and was accordingly something that could only be permitted by approval of the People in a referendum. This in the helpful terminology adopted by Clarke J. is the “sovereignty claim”. The Court heard the full appeal on that point on Tuesday 24th July. Not only was it a useful exercise in case management, since it allowed for focussed debate upon a single important issue, but this approach also had the effect of reducing the number of variables that the Court had to consider on the application for an interlocutory injunction: if the plaintiff’s Crotty argument had succeeded he would have been entitled to a permanent injunction and no issue of an interlocutory injunction would have arisen; conversely it was only if his Crotty argument failed, or was not determined, that it would be necessary to consider the interlocutory application but without reference to the Crotty issue. That is the basis upon which the argument proceeded, on the 24th. In the event, the Court announced its decision on the 31st July rejecting the plaintiff’s claim based upon Crotty. Accordingly the issue for this Court became whether an interlocutory injunction should be granted pending the final resolution of the remaining issues in the case.

  512. The most significant issues which remain are matters of EU law. The logical sequence of the issues might be first, whether the ratification by Ireland of the ESM Treaty as a stand alone international agreement is itself a breach of this country’s obligations under the Treaty Establishing the European Union (“TEU”) or the Treaty on the Functioning of the European Union (“TFEU”) (and hereafter collectively referred to as the “Treaties”) (“the ESM Treaty claim”). If not, the remaining questions are less relevant. If, however, ratification of the ESM Treaty is contrary to the Treaties, then a question arises whether the Treaties may be amended by a Council decision such as that contained in Council Decision 2011/199/EU, so to permit relevant member states to accede to the ESM Treaty. Finally, even if such amendment is permissible in principle, an issue would remain as to the validity of the individual decision particularly the use of the accelerated procedure (these two related issues are the “Council Decision claim”). The Court has decided that it was necessary, in conformity with Art.267 of the TFEU to refer questions to the European Court of Justice (“ECJ”) on these issues, and requested the Court to consider adoption of its accelerated procedure given the asserted urgency of the situation. The ECJ will hear argument on this issue on the 23rd of October. Accordingly, the question to be addressed on the interlocutory injunction application now becomes more limited again, both by reference to the legal issues in play (which are now largely matters of European law) and the period of time before a definitive answer can be given to those legal issues.

  513. In analysing the issues in this way, I do not lose sight of the argument made on behalf of the plaintiff that a breach of the Treaties is ipso facto a breach of the Irish Constitution because it is said that it is only to the Treaties in their unamended forms, that the Irish People have given approval in the Constitution, and to that extent the relevant treaties have become part of the constitutional law of Ireland. It is apparent however that this constitutional point is an entirely consequential one. It is completely dependent on, and follows ineluctably from, the European law argument. The alleged breach of the Constitution occurs because there is an alleged breach of the Treaties. The European issue is therefore logically anterior to the constitutional argument, and whatever that constitutional argument adds in terms of rhetoric and significance, it adds nothing in scope. Unless the European law argument succeeds the constitutional argument cannot succeed. It also follows, and this is important in the context of an interlocutory injunction application in particular, that if it is possible to remedy a breach of the European law, then the constitutional breach is also remedied. In my view therefore, and even assuming for the purposes of this stage of the argument that there is or may be merit in the contention that a breach of the Treaties is a breach of the Constitution (on which I express no view), it adds nothing to the calculation the court must carry out on an application for interlocutory injunction to say that the European law argument can also be framed in domestic constitutional terms.

  514. Finally an argument was also made, described helpfully by Clarke J. as the “power transfer claim”, to the effect that the European Stability Mechanism Act 2012, being the statutory mechanism utilised to implement the ESM Treaty in Irish law, involved an impermissible transfer of power from the Dáil to the Minister for Finance. However like Clarke J., I consider that this claim, whatever its merits, could not itself give rise to any plausible claim for an interlocutory injunction. On the assumption that all other more substantive claims failed but this succeeded, then the matter would be purely the method of implementation of the ESM Treaty, which is both capable of adjustment in accordance with any judgment of this Court, and as a purely domestic matter is in any event within the power of these courts. This in my view is fatal to any allegation of irreparable damage, which is the starting point for any claim for an injunction. Accordingly it is not necessary to address the question which might otherwise arise as to what considerations should apply to an application to restrain the operation of legislation, validly enacted and presumed constitutional, pending a trial, or as in this case, an appeal.

  515. The Court must therefore assess how best the situation should be managed pending the determination of these issues on foot of the reference to the European Court which will as a matter of a practicality resolve the European law points, and therefore in all probability, the litigation. It is argued by the Plaintiff that this was essentially the same task as faced the court in Crotty and it was pointed out that in a short judgment in that case (at p.763) the Supreme Court per Finlay C.J., granted an interlocutory injunction restraining ratification of the Single European Act, after the dismissal of the Plaintiff’s claim in the Divisional Court of the High Court, and pending the hearing of the Supreme Court appeal. It was also suggested that the appropriate test was that set out in the decision of the ECJ in Zuckerfabrik Süderdithmarschen (Case 143/88 and 92/89) [1991] E.C.R. 1-415 and restated in case Atlanta Fruchthandelsgesellschaft mbH v Bundesamt für Ernährung und Forstwirtschaft (Case 465/93) [1995] E.C.R. 1-3761 at p.3795 where it is provided that a national court should only grant interim relief with respect to a national administrative measure adopted in the implementation of a community regulation if:

  516. (1)

    that court entertains serious doubts as to the validity of the Community act and, if the validity of the contested act is not already an issue before the Court of Justice, itself refers the question to the Court of Justice;

    (2)

    there is urgency, in that the interim relief is necessary to avoid serious and irreparable damage being caused to the party seeking the relief;

    (3)

    the court takes due account of the Community interest; and

    (4)

    in its assessment of all those conditions, it respects any decisions of the Court of Justice or the Court of First Instance ruling on the lawfulness of the regulation or on an application for interim measures seeking similar interim relief at Community level.

  517. Some doubt was expressed as to whether this test differs in substance from the well known test in Campus Oil v Minister for Industry and Energy (No.2) [1983] I.R. 88. There may be cases in which it is necessary to address that point, and in particular to determine whether some higher threshold should be established before an injunction is granted restraining the implementation of a measure asserted to be invalid, but for the reasons as expressed by Clarke J., I consider it is possible to resolve this case by reference to the balance of convenience, or balance of justice as it is sometimes expressed.

  518. Counsel on behalf of the plaintiff also relied on the well known passage from Amministrazione delle Finanze dello Stato v Simmenthal SpA (Case 106/77) [1978] E.C.R. 629 at p.644:

  519. It follows from the foregoing that every national court must, in a case within its jurisdiction, apply Community law in its entirely and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it, whether prior or subsequent to the Community rule.

    Accordingly any provision of a national legal system and any legislative, administrative or judicial practice which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions which might prevent Community rules from having full force and effect are incompatible with those requirements which are the very essence of Community law ....

    The first question should therefore be answered to the effect that a national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provision by legislative or other constitutional means.

  520. The essence of the Plaintiff’s case was that he considered that what he described as respect for the rule of law required that the Court grant an injunction. It was said if the plaintiff was correct in his legal argument – and that was the assumption upon which the interlocutory injunction application must be approached – then ratification of the ESM Treaty would involve the creation of a permanent and irreversible arrangement that was itself a breach of EU law.

  521. The Plaintiff swore a detailed affidavit in support of his application. The thrust of the affidavit was to assert that unless an injunction was granted, the State would have entered into an irreversible binding commitment in international law, and the court would be deprived of jurisdiction to grant remedies in the event the Plaintiff succeeded. Furthermore the State would then be bound permanently to a breach of European law and consequently Irish constitutional law, and to financial commitments totalling €11.144 billion with the possibility of subsequent increases. The Plaintiff also referred to an unsuccessful challenge in the Estonian courts and a pending challenge in the German Constitutional Court, both of which appear to be by reference to provisions of the domestic constitutions. He also asserted that there was no particular urgency in ratification, because Ireland would be fully funded under the Memorandum of Understanding with the so called Troika, until the end of 2013.

  522. Counsel on behalf of the State for his part stated that he was expressly instructed that it was the unambiguous and unqualified view of the State parties, that should the ECJ find that the entry into the Treaty was a breach of European law, there would be a remedy at that level; indeed such a finding and declaration would be part of such a remedy. An affidavit had been sworn by Mr Jim O’Brien the second Secretary in the Department of Foreign Affairs asserting that irreparable harm would be caused to the interests of the State, and indeed those of the European Union, were Ireland not to be in a position to ratify the ESM as soon as possible. At paragraph 7 of his affidavit he stated:

  523. I say and believe that the need for the ESM is urgent, and it is the carefully considered view of the Government that it is essential in the national interest that Ireland should ratify the ESM Treaty as soon as possible. The Euro area member states and the European Union also have pressing interest in Ireland’s ratification of the ESM Treaty at the earliest possible opportunity.

  524. Counsel on behalf of the State sought to distinguish Crotty in three respects. First, he said there was not similar urgency involved in the ratification of the SEA, and the injunction was only granted for a number of days to permit the Supreme Court hear and determine the appeal in that case. Second, Crotty concerned an issue solely of Irish constitutional law. Third, and perhaps most importantly, it was asserted, and accepted by the Court in that case, that there was serious risk of irreversibility. If the SEA was ratified, the consequence would have been an amendment of the then applicable European Treaties which it was said would put the Treaty beyond constitutional challenge by virtue of the provisions of Article 29.4.3. That he asserted, was simply not the case here.

  525. Notwithstanding the vigour with which the case was made, and the skill and learning shown in the written submissions advanced, I have come to the conclusion that the application for an interlocutory injunction in this Court is profoundly misconceived. On every single consideration I am satisfied that the balance is decisively against the grant of such an order.

  526. First, I am satisfied that the analogy with Crotty is misplaced. Crotty was a truly exceptional case involving an issue of Irish constitutional law, and a view, which appears to have been accepted at least for the purpose of the application by the Court, that the decision to ratify the SEA would put it beyond any subsequent challenge. The question of the irreversibility of the measure was therefore central to the decision to grant the injunction in Crotty. Furthermore, the period of time involved was very limited, and a matter within the Court’s own control. Here by contrast the issue is one of European, rather than Irish, law and at its core is the capacity of members of the Euro area to enter into a separate ESM Treaty. In my view it is clear therefore that ratification pending the conclusion of the case would not put the ESM treaty beyond effective challenge at the level of EU law.

  527. Second, it follows from the foregoing that no irreparable harm would be caused, still less any irreparable harm to the plaintiff in these proceedings, if the injunction is not granted. If for example the ECJ considered that the ESM Treaty contravened the Treaties in some respect, then given the fact that every participant of a treaty in the ESM Treaty is a member of the EU and is bound by the decisions of the ECJ, it would clearly be within the power of the EU, whether alone or in conjunction with the national courts, to secure compliance with what it had determined to be the true interpretation of the Treaties and the obligations of the relevant member states. Indeed it would be the duty of the participant countries to conform to the law as so declared. That would be the application of the principle in Simmenthal rather than a breach of it.

  528. Third, on the assumption that an effective declaration of invalidity might indeed be made even after ratification, the Plaintiff nevertheless argued that steps could be taken quite quickly on foot of ratification such as calls for capital, borrowing on foot of that, and even advancement of loans, which might be difficult to reverse. It was emphasised that the sums involved were enormous. Even allowing this I do not consider that this compels the grant of an injunction. First, it is not beyond the power of courts, whether at national or EU level, to require steps taken to be reversed if it is considered necessary to bring parties in to conformity with the requirements of the law. Furthermore, the Plaintiff has never expressed himself to be opposed to the advancement of particular monies to particular countries. His objection, repeatedly stated during this case, lay at the level of principle, and was to a permanent mechanism with the possibility of a requirement for further funding from this country. Notably, he has not challenged, and apparently has not raised any complaint about, the EFSF mechanism which has been in place since May 2010, and made considerable disbursements thereafter, and which the ESM is intended to replace. It follows, that in the event that the plaintiff should succeed in these proceedings pursuant to the reference to the ECJ, then the ESM in its current form would be brought to an end, and would have had a lifetime much shorter than that of the EFSF. Accordingly, in such an event, neither Mr Pringle, nor the interests he asserts, would have suffered any irreparable harm, or indeed any harm at all.

  529. Fourth, it must be recalled that the point which now remains in this case is an issue of pure European law equally applicable in theory in every country throughout the European Union. However, if the Plaintiff were to succeed and if an injunction were to be granted, the effect would only be that Ireland would not ratify the Treaty. Such an injunction would not restrain approval by other Member States, or indeed the coming in to force of the ESM, which is the object Mr Pringle seeks to achieve. The remedy of an injunction would therefore produce the worst of all outcomes even if temporary: it would run the risk of causing the harm to the defendant’s interests which they apprehend without benefiting the plaintiff’s interest in any material way. If the plaintiff were ultimately to succeed, that would have the same impact across the Eurozone. Pending such a decision there is no compelling reason why Ireland should not be in the same position as its European partners.

  530. A fifth consideration is that as set out in Zuckerfabrik, which requires that the interests of what was then the Community (and now the Union), should be taken into account. The domestic concept of the balance of convenience is I think sufficiently flexible to take such a consideration into account. It seems apparent that the interests of the Union weigh heavily against the grant of an injunction at this stage, since the only certain consequence of such an order is further uncertainty in an already volatile financial world. Furthermore it does not appear that any other citizen of the EU has commenced a challenge to the ESM on grounds of European law. The citizenry of the Union have interests and rights which would be affected, perhaps severely, by the grant of an injunction. In circumstances where the Plaintiff’s case is not compelling, and where the outcome of any order is unpredictable, I consider that the interests of the Union lie against any temporary order under which the interests of the wider citizenry of the Union and the Eurozone in particular might be affected, without the possibility of representation in the proceedings, or remedy should the proceedings ultimately fail.

  531. Finally, there is in my view, a real risk of irreparable harm to the defendants if an injunction is granted. It cannot be ignored that an affidavit has been sworn by a high official in that Department of Government which exercises the Executive function in the conduct of foreign affairs. That duty is consigned solely to the Government pursuant to Article 29.4, of the Constitution subject only to the Government’s accountability to the Dáil (of which, it might be observed, the Plaintiff is a member) pursuant to Article 28.4.1. Mr O’Brien has sworn that it is the considered view of the Government that it is essential in the national interest not just that Ireland ratify the Treaty but that it do so as soon as possible. If ratification is prohibited by order of this Court , then it follows that the national interest, at least in the view of the organ entrusted with the sole power to conduct international relations and which for good measure manages the State’s economic affairs, is necessarily damaged. Furthermore, that particular damage is irreparable. If the injunction sought is granted, then the one thing that cannot be done, and can never be done whatever the subsequent outcome of this case, is that Ireland should proceed to ratify the Treaty at that time which the body entrusted with that decision had decided it was in Ireland’s national interests to do so. It is manifest that there is nothing that the plaintiff or indeed this Court could do to remedy that damage. It is also truly remarkable that on this application the courts should be invited simply to disregard that stark statement, and to accept instead the assertion of the plaintiff, who lacks both the constitutional function and it appears any professional expertise to make such a judgment, that Ireland is fully funded until 2013 and that therefore no damage will be done to Ireland’s national interest by a delayed ratification, even if it should later transpire that such ratification would have been perfectly lawful.

  532. This leads me to a consideration which appears to have been largely overlooked in the plaintiff’s analysis, but which in my view is also decisive. In Crotty, in the course of a short judgment granting the injunction, Finlay C.J., with whom all other members of the court agreed, recognised that in the constitutional context the balance of convenience was exceptional and considerations different to those of the ordinary injunction applied. The very fact that the plaintiff does not even address the question of an undertaking as to damages, normally a sine qua non of the grant of an injunction in private law is perhaps an acknowledgement, albeit tacit, of the accuracy of this observation. In the plaintiff’s determination to challenge the wisdom and legality of the Government’s decision, he appears to give no weight to the fact that it is a decision made by the Government. That is the body to which the Constitution has allocated the task of making such decisions whether trivial, important, wise, or profoundly misguided. Here the Court is invited to restrain the exercise of constitutional function by a body authorised to carry out that function, and in respect of which function the Constitution imposes little in the way of express limitation, and contemplates direct accountability to the Dáil and indirectly the People, rather than to the courts. Indeed, in one sense this case goes further. It has been asserted, in my view plausibly, that it is in the national interest for Ireland not only to ratify the ESM Treaty, but to do so as soon possible. No one can be unaware of the importance of speed and the unpredictable consequences of delay in such matters. Time therefore is more critical in the context of this application than even in Crotty, where it might be said that Ireland’s national interest would be protected by ratification within a reasonable time. A court requested to grant an injunction in circumstances such as this , is faced with a form of zero sum calculation. It is not possible to freeze the time for making this decision. Events, both in Ireland and elsewhere, will move on. Accordingly, if the decision cannot be made to ratify the Treaty immediately, then that is, in effect, a decision not to ratify the Treaty immediately. The question then becomes not just what decision should be made but who should make it, even temporarily. That is a question on which the Constitution gives clear guidance. The Constitution makes that decision one for the Executive branch and does not confer that function upon either this Court, or any individual plaintiff. The fact that the decision may be momentous does not alter the constitutional allocation. Governments are elected to make decisions whether trivial or momentous successful or catastrophic, and for those decisions they are answerable to the Dáil, and through it to the People.

  533. Accordingly, this case presents in a particularly acute way an invitation to the Court, which is itself obliged to ensure that the functions of the other constitutional bodies are exercised within their proper sphere, not just to prevent what is, on its face, a performance of constitutional function by the body to which the Constitution has allocated that function, but also to become, however temporarily, a participant in the exercise of the function. This is something which in the general sphere, a court is correctly, reluctant to do. For example a court simply will not interfere with the legislative process prior to the enactment of legislation, no matter how plain the alleged defect is: Wireless Dealers’ Association v Fair Trade Commission (Unreported, Supreme Court, 14 March, 1956). Once enacted, and the Legislature has performed its function, the legislation may be challenged. The exercise of the State’s exercise in foreign affairs may be somewhat different, because it can occasionally carry with it the prospect of a decision being implemented and immunised, and effectively put beyond contest, review or remedy. But that should not obscure the fact that fundamentally, a court should be very slow to take a step which may involve effectively substituting its decision even if only temporary and suspensive , for that of the Government in matters of foreign affairs. Accordingly, in my view, the proper functioning of the constitutional balance requires that considerable weight indeed should be accorded to the constitutional interest in ensuring that the Government performs the executive functions assigned to it in the way it considers appropriate and for which it is accountable in the first place to the Dáil and through it to the People. The constitutionality of the measure can still be challenged after it has come into effect. There may be cases which are particularly clear and strong, and which are attended by considerations such as unreviewability, immunity and urgency. It is not necessary or indeed wise to anticipate such eventualities. It is enough to say, that this case is decidedly not one such. Here, the balance of convenience, on any view, weighs heavily against the grant of an injunction. The Plaintiff’s claim has been addressed with considerable expedition, in the High Court, this Court, and the ECJ. That process will provide a very speedy resolution of the issues raised by the plaintiff. Pending the final outcome of those proceedings the challenged measures, both at domestic and EU level, remain in place. In my view that is the appropriate, and certainly preferable, way to the address the Plaintiff’s concerns.

    Justice William M. McKechnie

  534. In view of the other judgments of the Court dismissing this application, a conclusion with which I entirely agree, I propose to add a few brief observations only, to put in context my agreement with such decision.

  535. The key issue on this part of the constitutional challenge is the application of Crotty v An Taoiseach [1987] IR 713 (“Crotty”): no-one has suggested that Crotty was wrongly decided. The defendants expressly acknowledge the correctness of the decision and say that whilst it may have been controversial at the time, that certainly is no longer the case. The plaintiff relies upon it as the fundamental pillar or cornerstone in the challenge undertaken by him. Therefore, how Crotty was decided is not the point, although I should say that in my view the decision was correct. Rather, it is whether, by reference to the principles properly deducible from the majority decision, the State, by becoming a contracting party to the European Stability Mechanism Treaty, done at Brussels on the 2nd February, 2012 (“ESM Treaty”), can be said to have “alienated”, “abdicated”, “surrendered”, or “transferred” the powers bestowed upon it by the Constitution, in a manner not so permitted by it. This aspect of the case is in effect a single precedent one: is the State’s ratification of the ESM Treaty prohibited by Crotty?In other words, has the Government, in the exercise of its executive authority in the field of foreign affairs, infringed the limitations imposed on that power, when referenced to Crotty?

  536. Before looking at Crotty however, it is important to note that the suggested action of the Government is not challenged by virtue of any express constitutional provision. The absence of such challenge is entirely understandable because, at the level of principle, it is uncontroverted that:

  537. the executive power of the State, generally and in particular with reference to foreign affairs (“external relations” is the phrase used in Article 29.4 of the Constitution), is exercised solely by or on the authority of the Government;

    subject to informing Dáil Éireann, and where a charge on public funds is involved, getting its approval, the State may enter into international agreements; and

    where any such agreement is intended to be part of domestic law, the approval of the Houses of the Oireachtas is required;

    these provisions do not apply to agreements of a technical and administrative character.

    There is nothing surprising in any of these provisions: the Dáil requirement reflects domestic accountability at political level and the legislative requirement reflects the institutional structure of the Constitution.

  538. There is thus no dispute about these general principles or the fact that the exercise of this power by the executive branch of Government, in the field of foreign affairs and indeed otherwise can be subject to judicial scrutiny, and therefore to judicial analysis (Walsh J. and Henchy J. at pp. 778 and 786 respectively of Crotty, and McCarthy J. at 541 of Ellis v O’Dea [1989] I.R. 530). Equally so, any act done in this area, such as for example, entering into an international agreement or treaty, whether by virtue of entry alone or by reason of the commitments and obligations thereby undertaken, must be compatible with the Constitution. Article 29.4.1, in conjunction with Article 28.2 expressly states that such power is subject to the provisions of the Constitution. In such circumstances Walsh J. must surely have been correct when he said that the Government, or for that matter the Houses of the Oireachtas, cannot operate free from the constraints of the Constitution (p. 778 of Crotty). Subject to this limitation, which is imposed at the highest level of our legal order, it has also been readily acknowledged that the Government alone is the actor in this field and that it enjoys extensive autonomy in that regard. The source of this competence is not statute-dependent, but rather stems from the Constitution itself; see not only Article 29, but also the provisions of Articles 1, 5, and 6.

  539. In considering the complaint and allegation of unconstitutionality in this case, the evaluation test or criteria to be applied, is to be found in Crotty and at a most general level can be described by stating that, the relevant powers of Government cannot be abdicated, alienated, transferred, or subordinated to other states or bodies. These words are rooted squarely on the sovereignty of the State and on the Nation’s affirmation of its inalienable and indefeasible right, inter alia, to determine its relation with other nations (Article 1), and on the right of the people, in the final appeal, to decide all questions of national policy having regard to the requirements of the common good (Article 6). As can be imagined, much learned debate on both the judicial and academic side, has followed Crotty with a view to ascertaining the true meaning of these words. Of necessity and largely by reason of the paucity of cases where the issue arises, much of the discussion has been abstract lead. Notwithstanding the unquestioned value of such contributions, nonetheless, I believe that the real and essential import of such words are more likely to emerge from an examination of their practical effect, on a set of concrete circumstances such as those presenting in the instant case. Such an examination at a general level is briefly conducted at paras 13 and 14 infra. Whilst correctly there has been much concentration on these phrases, nevertheless, reference must of course also be made to the detail of Crotty, without which a full understanding of the decision would obviously be lacking.

  540. Despite the fact as indicated, that the parameters of the decision still give rise to much debate and differing views, I do not believe that, for the purposes of this case, Crotty must necessarily be microscopically examined in such a way that a conclusion – supporting, refining, or dissenting – from each and every aspect of the decision, must be reached. I do not find such an exercise vital, at least at this stage, for the very fundamental reason that, at a comparative level, the subject of the investigation in that case, namely Title III of the Single European Act (“SEA”), is wholly distinguishable from the provisions of the ESM Treaty, the subject of the instant case.

  541. The views of the majority in Crotty which underpin the Court’s conclusion were described in varying and differing ways: these have been fully set out in the judgments of the other members of this Court and I gratefully adopt what they say. I wish to add only a few comments:

  542. Walsh J., in a passage referred to at p. 781 of the report, states that the essential nature of sovereignty is the right to say “yes or no”. Sovereignty in this context can only mean that as provided for and as intended by the Constitution. It is said by the plaintiff that this right encapsulates the very heart, not only of the majority decision but of sovereignty itself. Without qualification or context I cannot agree with this proposition, either at a particular or general level. Given the extensive observations of the learned judge on this issue, to take such a phrase and to treat it, in isolation, as founding the essence of his decision is in my view, to misread his judgment. To suggest that the criteria for determining the instant challenge, to the exercise by the Executive of its power to ratify the ESM Treaty, can be determined on such a basis is simply not sustainable. In fairness, I should immediately say, lest I appear to do an injustice to the plaintiff, that his reference to and reliance upon this phrase may have been intended as a shorthand expression of his more general argument under this heading. Therefore, whilst the point has to be addressed, the overall case has to be determined on the entirety of what the majority said, and not simply on this passage.

    Reverting to the particular argument for a moment, the reason why I reject the suggested significance of the expression is that in the first place, the judge himself expressly acknowledged that Finlay C.J. was the source of such phrase, when giving the Court’s judgment on the challenge to the SEA save for Title III thereof. That remark, as originally made, was entirely appropriate to the context then under discussion by the Chief Justice. At page 769 of the report the context appears: “[t]he capacity of the Council to take decisions with legislative effect is a diminution of the sovereignty of Member States, including Ireland, and this was one of the reasons why the Third Amendment to the Constitution was necessary. Sovereignty in this context is the unfettered right to decide: to say yes or no”. Therefore, having transposed such remark, it is not appropriate to assign or ascribe to it, the determinative importance which has been suggested.

    A much more representative version of the judgment of Walsh J. is to be found at the end of p. 780, and on pp. 782 and 783 of the report. What is stated there has been set out in the other judgments delivered and therefore I will not repeat them: everyone is familiar with the key expressions from that and the other majority judgments, such as the impermissibility of “abdicating”, “alienating”, “surrendering”, or “transferring” such powers, save as allowed by the Constitution.

    It is clear from these passages that the learned judge was very much focusing on the freedom which the Constitution bestowed on the Government in deciding matters of foreign policy. That freedom was to develop, formulate and pursue policy and to change or adjust that policy as occasion required. That freedom to exercise, or not to exercise as the case may be, in a particular way, could not be abridged by the terms of an agreement binding on the Government and reached with a third party country or other entity.

    It is true to say that some excerpts from his judgment may be capable of an interpretation consistent only with Ireland having an overriding control, within the terms of any such agreement, being one capable of exercise at all times and on all issues. For the reasons given by O’Donnell J. and Clarke J., I do not agree that such an interpretation is the correct one. In fact, Walsh J. pointed out several agreements to which Ireland was a signatory, where no such control existed and therefore could not be exerted.

    In addition however, if there should be ambiguity in this regard, the words or expressions in question, must be looked at and measured against the terms of Title III, of the SEA, which were the subject matter of the challenge. Given the scope, breadth, and skeleton nature of the aspirations envisaged by that treaty and the demanded level of cooperation necessary to give effect to them, it is understandable how it could be said that the core constitutional freedom in question, at least in part, was being surrendered. Furthermore, when a comparative analysis is conducted between Title III of the SEA and the provisions of the ESM Treaty, the seismic distinction between both, becomes instantly demonstrable.

  543. Henchy J. likewise viewed Title III as a vehicle to move foreign policy from a national to a Community level: it constituted a “fundamental transformation” in the relations between participating states. Such had the effect, amongst others, of entirely undermining the pre-eminence of the “common good”, which should prevail in all government questions of national policy. Article 6 of the Constitution, in conjunction with Article 5 and others thereof, did not so allow. It was one thing to consult with other States in the conduct of foreign policy, but it was quite a different matter to enter into a binding agreement whereby the State was required to act “in the sphere of foreign relations in a manner which would be inconsistent with constitutional requirements”. Such was not permitted.

  544. Finally in this regard, Hederman J. was of the view that the Government could not submit or subordinate the exercise of its constitutional powers, in this field, “to the advice or interests of other states, as distinct from electing from time to time to pursue its own particular policies in union or in concert with other states in their pursuit of their own similar or even identical policies” (p. 794 of the report).

  545. All of the judicial observations made in Crotty must obviously be viewed against the Treaty provisions which the Court was called upon to examine: such provisions committing the State and all future Governments to do the following:

  546. 1.

    To endeavour to formulate and to implement a European foreign policy.

    2.

    To undertake to inform or consult the other Member States on any foreign policy matters of general interest (not just of common interest) so as to ensure that the combined influence of the States is exercised as effectively as possible through co-ordination, the convergence of their positions and the implementation of joint action.

    3.

    In adopting its position and in its national measures the State shall take full account of the position of the other Member States and shall give due consideration to the desirability of adopting and implementing common European positions.

    4.

    The State will ensure that with its fellow Member States common principles and objectives are gradually developed and defined.

    5.

    The State shall endeavour to avoid any action or position which impairs the effectiveness of the Community States as a cohesive force in international relations or within international organisations.

    6.

    The State shall so far as possible refrain from impeding the formation of a consensus and the joint action which this could produce.

    7.

    The State shall be ready to co-ordinate its position with the position of the other Member States more closely on the political and economic aspects of security.

    8.

    The State shall maintain the technological and industrial conditions necessary for security of the Member States and it shall work to that end at national level and, where appropriate, within the framework of the competent institutions and bodies.

    9.

    In international institutions and at international conferences which the State attends it shall endeavour to adopt a common position with the other Member States on subjects covered by Title III.

    10.

    In international institutions and at international conferences in which not all of the Member States participate the State, if it is one of those participating, shall take full account of the positions agreed in European Political Cooperation.

    One other matter expressed in somewhat ambiguous terms at Article 6 (c) in Title II is as follows:

    Nothing in this Title shall impede closer cooperation in the field of security between certain of the High Contracting Parties within the framework of the Western European Union or the Atlantic Alliance.

  547. Littered within the above obligations, are requirements, not only to consult with and inform other states, but also by endeavour to ensure that “common principles and objectives” are generally developed and defined; to take account of their position in adopting a national perspective; to adjust such perspective to accommodate the common good of other states; and to converge its interests so that the objective of reaching a common European policy could be furthered. In addition, the State was required to step down its own position if otherwise that would impede reaching a consensus or prevent joint action; and much more.

  548. At a general level Title III of the SEA, constituted an abstract framework in many fundamental respects. It lacked specificity and failed to set out or provide parameters either by reference to the formulation or implementation of policy. It set broad and distant targets which if achieved, would bring about significant changes in constitutional structure. The method of progress in this regard was largely unspecified save to note the significance of the power vested in organs or bodies, external to the State: the outside boundaries were ill-defined as was the timescale and structures envisaged. It involved the State being made subservient to the interests of other member states and would have brought about a “fundamental transformation” of Ireland’s relations with such states. It would have increased the essential scope and objectives of the Community. In all, it was very much a journey into the unknown.

  549. When one contrasts the above position with that prevailing under the ESM Treaty, it becomes immediately clear that what is established by the latter, is an international financial institution, financed by contributions from contracting states as well as having an ability of itself to raise funds on the market. Its operational remit is to provide assistance to contracting states who cannot obtain finance on the market at reasonable and sustainable rates. Such assistance is subject to strict conditionality.

  550. At the point of principle what is strikingly different between the provisions of the ESM Treaty and Title III of SEA, is the level of detail underpinning the former and the absence of such detail regarding the latter. The entire substance of the ESM Treaty structure is set out, commencing with the purpose of its establishment, its memberships, its governance – which includes voting rights of contracting states, how decisions are made, specifying those which require mutual agreement and those which can be recorded by qualified or simple majority and making specific provision for true emergency situations – and its initial capital which is maximised at a certain level with each contracting state’s contribution being calculated or capable of ready calculation. It goes on to detail how such can be reviewed in accordance with Article 10(1) and Article 5(6)(b) thereof, how stability support can be provided to a contracting party with the use of a financial instrument most appropriate to its financial management and it also deals with the establishment of reserve and other funds, coverage of losses, etc..

  551. This brief survey of its provisions do not do immediate justice to a comparative analysis with Crotty. If time and space permitted, the laying out of its terms in full, would immediately convey the disparity between it and Title III SEA. In effect the fundamental difference between both is the fact that the ESM Treaty is essentially policy implementing and not policy making. Therefore, it cannot be said that there is any fundamental transfer of sovereign power to the institution or to the other subscribing states.

  552. Whilst I acknowledge that there are certain provisions, heavily relied upon by the plaintiff which might suggest the contrary, in reality and as a matter of practice, none of these involve an open-ended commitment by the State. In addition, the State has a voice on such matters. It is true that if the State defaults in making its contribution to the authorised capital stock or in honouring its obligations to reimburse any financial assistance obtained from the institution, then and for so long as such default continues, it shall be unable to exercise its voting rights, by virtue of Article 5(8) of the Treaty. However, even in such a situation it seems most unlikely that there could be any increase in authorised capital stock as any such decision could only enter into force after the members had complied with their applicable national procedures (Article 10). I rest this view not on any definitive interpretation of the Treaty’s provisions, that ultimately being a matter for the General Court, but rather on the undeniable fact that as part of domestic law, the Dáil’s approval would be required for any such increase. In this context it should be noted that subject to the possible review last mentioned, Ireland’s maximum contribution has been capped and in fact the Minister for Finance has been authorised, by virtue of Section 2 of the European Stability Mechanism Act 2012, to make such payments as required.

  553. In addition, whilst the institution may provide financial support for a member state during the currency of any default period, which of necessity would mean that the State could not influence the terms of any such assistance, nonetheless that consequence could not be classified as decisive or determinative in this area. In any event it is a consequence which is within the State’s power to avoid. Equally so, when one considers the actual terms of the Treaty and the relevant provisions of Articles 28 and 29 of the Constitution, I do not believe that the absence of a specific provision for withdrawal, has any negative effect or consequence for sovereignty.

  554. Consequently in my view, I cannot agree that the State, by entering into this Treaty, has acted impermissibly in the manner identified by the majority in Crotty. Rather, when the benefits of the Treaty are also accounted for, it can be said that its ratification, in the full knowledge of the commitments undertaken, is in itself an act of sovereign power and not a subjection of it. Furthermore, it can rightly be seen as a step in furtherance of the common good of the Nation even if in this regard the common good of other member states is also satisfied.

  555. Finally, I agree with the judgment of the Chief Justice on the injunction issue.

  556. For the above reasons, I would dismiss this aspect of Mr. Pringle’s claim.

    Justice Clarke

  557. 1. Introduction

  558. On the 11th July, 2011 those of the Member States of the European Union who are also members of the euro area agreed the Treaty Establishing the European Stability Mechanism (respectively the "ESM Treaty", or simply the "Treaty", and "the ESM"). The ratification procedure for the ESM Treaty in the subscribing Member States is under way. Ireland had not, when these proceedings came before this court, ratified the Treaty. It is in that context that these proceedings were brought by the plaintiff/appellant ("Deputy Pringle") who is an Independent Member of Dáil Éireann.

  559. Deputy Pringle alleged that the ratification by the Irish government of the ESM Treaty would be in breach of the Constitution. Deputy Pringle also alleged that the ESM Treaty was inconsistent with aspects of the treaties of the European Union and in particular certain provisions of the Treaty on the Functioning of the European Union ("TFEU") so that, it was said, Ireland's ratification of the ESM Treaty and membership of the ESM would entail obligations which were incompatible with the EU treaties.

  560. In addition Deputy Pringle asserted that, in the absence of the Government being prepared to give an undertaking to the court that it would not ratify the ESM Treaty pending the outcome of these proceedings, an injunction should be granted restraining the Government from such ratification.

  561. It should also be noted that the European Council has adopted European Council Decision 2011/199/EU on the 25th March, 2011 ("the Council Decision"). The precise interaction between the Council Decision and the ESM Treaty will need to be considered later in this judgment. However, on a number of bases, Deputy Pringle asserts that the Council Decision is inconsistent with the EU treaties and is therefore invalid.

  562. These proceedings moved with considerable urgency. A plenary summons was issued in the High Court on the 13th April, 2012 with a statement of claim being delivered on the 25th April. Detailed particulars were exchanged with a defence being filed on behalf of the defendants/respondents ("the State") on the 1st June and a reply being filed on behalf of Deputy Pringle on the 11th June. The matter was listed for an expedited hearing before Laffoy J. and was heard between the 19th and the 29th June.

  563. On the 9th July Laffoy J. gave a brief outline ruling as a result of which, subject to one matter, Deputy Pringle's claim was dismissed in its entirety. At para. 4 of the order made on that day, Laffoy J. indicated that one part of Deputy Pringle's claim should be referred to the Court of Justice of the European Union. On the 17th July a detailed written judgment was delivered by Laffoy J. setting out her full reasons. Deputy Pringle appealed against the judgment and order of Laffoy J. to this court.

  564. This judgment deals with some, but not all, aspects of the issues which were raised by Deputy Pringle's appeal. In order to set out why this judgment is directed to only some of the issues raised it is necessary to say something about the procedural history of this appeal before this court. I therefore, turn, to the procedural history.

  565. 2. Procedural History

  566. As noted earlier Laffoy J. gave an oral ruling on the 9th July setting out, in summary form, her conclusions. On the same day counsel for Deputy Pringle and counsel for the State applied to this court for an expedited hearing. It will be necessary to return briefly to the issues said to give rise to urgency. However, this court concluded that it would endeavour to provide such an expedited hearing in respect of at least some of the issues which arose on the appeal and fixed the week of the 23rd July for that hearing. The court arranged for the appeal to be listed for case management on the previous Friday being the 20th July. At that case management hearing a number of practical issues were canvassed.

  567. By that time the parties had filed detailed written submissions. From those submissions it appeared to the court that, at least in broad and general terms, it was possible to group the issues which seemed likely to arise on the appeal as a whole in the following manner:–

    1. ssues which arose from the arguments which suggested that, as a matter of Irish constitutional law, the adoption and proposed ratification by Ireland of the ESM Treaty would amount to an impermissible delegation of the sovereignty of the State and an excessive exercise by the government of its executive powers in conducting the external relations of the State ("the sovereignty claim");

    2. ssues which derived from the claim that the legislation enacted by the Oireachtas to implement the ESM Treaty in Ireland (the European Stability Mechanism Act 2012 ("the 2012 Act")) involved a constitutionally impermissible transfer of power from the Oireachtas (and in particular the Dáil) to the Minister for Finance ("the power transfer claim");

    3. ssues arising from the claim that Member States, contracting in accordance with the provisions of the ESM Treaty, would undertake obligations which would be in contravention of provisions of the Treaty on European Union ("TEU") and the TFEU concerning economic and monetary policy and would directly allow encroachment on what were said to be exclusive competences of the Union in the matter of the euro and related policies ("the ESM Treaty claim");

    4. ssues arising from the argument that the Council Decision is invalid as (a) it was not lawfully adopted because of the use of the simplified revision procedures provided for by Art. 48(6) of the TEU (it being said that the Council Decision involves an alteration of the competences of the Union contrary to the third paragraph of that article) and also (b) because it is said that the Council Decision is inconsistent with provisions of the Treaties concerning economic and monetary union and general principles of the law of the European Union in particular the principle of legal certainty ("the Council Decision claim"); and

    5. ssues concerning whether it is appropriate to grant an injunction to restrain the State from ratifying the ESM Treaty pending a final resolution of these proceedings ("the injunction claim").

  568. It is, perhaps, appropriate to note one possible refinement of that analysis. Counsel on behalf of Deputy Pringle argued that there was a potential connection between at least some of the arguments raised under what might loosely be called the "EU element" of the appeal (that is the ESM Treaty claim and the Council Decision claim) and the argument raised concerning the alleged inconsistency of ratification with the Constitution. In brief it was argued by counsel that the fact that the people of Ireland adopted the EU treaties, and in particular the Maastricht Treaty which provided for the measures necessary to establish the euro, meant that a material alteration to that regime which was in breach of those treaties was, it was said, also in breach of the Irish Constitution. It is obvious that this issue only arises in the event of the alleged incompatibility of the ESM Treaty with the EU treaties being established. It should be noted that counsel for the State argued that such questions were matters of EU law only and had no bearing on the Irish constitutional position.

  569. The court was concerned to ensure that any issues in respect of which real urgency arose were afforded as early a hearing as could be facilitated. In that context counsel on both sides were invited to indicate the basis of any urgency asserted. On behalf of Deputy Pringle it was said that urgency only arose in the event that there was no undertaking given on behalf of the State or injunction imposed by the court which would have the effect of preventing the State from ratifying the ESM Treaty pending a resolution of these proceedings. The argument of counsel for the State was, in a sense, the mirror image. It was said that the matter was not urgent, strictly speaking, because the State was not constrained from ratifying the Treaty. However, it was acknowledged that the Government would be reluctant to ratify the Treaty while a challenge based on purely Irish constitutional grounds was before this court. On the other hand counsel indicated that it was the view of the Government that it would be contrary to the national interest for the Treaty to come into effect without, as counsel put it, Ireland having a seat at the table.

  570. In that context it is appropriate to mention the practicalities which surround the ratification of the ESM Treaty. In order for the Treaty to come into effect it is necessary that it be ratified by countries representing at least 90% of the capital sums to which the ESM Treaty would require subscribing states to commit. It is clear that the allocation to Germany represents a sum of 27.1464% of that capital so that the 90% barrier cannot be reached without the support of Germany (in passing it should be noted that France, Italy and Spain also have allocations in excess of 10% so that overall ratification is not possible without the individual ratification of each of those countries as well). In any event German ratification had been delayed pending a decision of the German Constitutional Court. When the matter was first mentioned before this court, counsel for the State indicated that it was possible that at least a preliminary ruling of the German Constitutional Court which might, on one view, clear the way for German ratification, could be given prior to the end of July. However, by the time of the case management hearing to which reference has been made, it had become clear that the relevant preliminary ruling was not to be delivered until at least the 12th September, when it was in fact delivered.

  571. However, counsel on behalf of the State indicated that it was the Government's view that, in the event that the ruling of the German Constitutional Court was such as permitted German ratification, a sufficient level of ratification would occur very soon after the 12th September so as to allow the Treaty to come into effect. The Government's concern, as expressed by counsel and supported by affidavit evidence filed on behalf of the State, was that it would not be in Ireland's interest if that were to occur without Ireland being a participant from the beginning. It was in the same context that counsel had, when the case was first mentioned before the court, indicated that the Government was willing to give an undertaking not to ratify pending a hearing in this court on the sovereignty claim provided that the court was able to accommodate an expeditious hearing. Counsel for the State also explained the Government's view that early ratification, even before any decision of the German Constitutional Court, was important as a measure designed to build international confidence in Ireland and thus, it was said, increase the chances of Ireland being in a position to return to the international lending markets.

  572. A second matter touched on at the case management hearing was the question of a possible reference to the Court of Justice under Art. 267 of the TFEU. Counsel for Deputy Pringle suggested that it was almost inevitable that this court, as a court of final appeal, would be required to make a reference. Counsel for the State, while acknowledging that there were only limited circumstances in which this court could decline to make a reference, nonetheless indicated that there might be matters which the court would wish to consider before making a final decision on whether to make a reference.

  573. Finally, a question arose as to whether, as counsel for Deputy Pringle argued, the issues of Irish constitutional law which arose on the appeal were so inextricably linked with issues of European Union law that it would not be possible to reach any conclusions on the Irish constitutional issues until a reference had been made and answered by the Court of Justice. On the other hand counsel for the State argued that there were matters of Irish constitutional law which could and should be determined by this court independent of any matters which might require to be the subject of a reference to the Court of Justice.

  574. Having considered the submissions of counsel, the court came to the view, without reaching a final conclusion, that it was possible that there were issues of pure Irish constitutional law which the court could and should determine independent of any reference to the Court of Justice. The court was persuaded that any such issues (being the sovereignty claim) were ones of real urgency and that argument should be heard on those issues and, if possible, a determination given in relation to same, at the earliest possible date. The court listed those issues for hearing on Tuesday the 24th July. In addition it should be noted that the court decided to direct a system of fixed periods for all oral submissions on those issues, allocating two hours to Deputy Pringle's side, a further two hours to the State in response and half an hour to Deputy Pringle in reply.

  575. Second, the court indicated that it would list, on Thursday the 26th July, the question of whether, and if so in what form, a reference should be made to the Court of Justice. The court indicated that it would endeavour to provide the parties, on Tuesday the 24th, with the court's suggested draft of such a reference. A draft reference was so provided.

  576. The court also indicated that it would hear counsel on the question of whether it was appropriate to restrain the Government, pending a final resolution of all of the issues which arise in these proceedings, from ratifying the ESM Treaty with such argument also to be heard on Thursday the 26th. The court left over all other questions until a future date. For the reasons which follow I supported the court's decision so to do.

  577. The remaining issues did not seem to me to be of the same level of urgency. If it were found to be permissible, as a matter of pure Irish constitutional law, for Ireland to ratify the ESM Treaty then the precise mechanism, which might be employed for Ireland's participation and, in particular, any question as to the extent of the oversight by the Dáil over the exercise by the Minister for Finance of his role in the ESM Treaty, would be an entirely internal Irish matter over which this court could exercise effective control. Thus the power transfer claim did not seem to me to be of the same level of urgency as the other claims.

  578. Likewise the argument raised as to the interconnection between aspects of the claims based on EU law and the Irish constitutional claims seemed to me to be one which could await the result of the reference to the Court of Justice for further consideration. Indeed by then the point may well be moot for if the Court of Justice finds for the State then the point does not arise and if the Court of Justice finds for Deputy Pringle then it seems highly unlikely that the ESM Treaty in its present form could go ahead, at least without further measures being adopted.

  579. Having conducted the hearings referred to, the court, on the 31st July, made a ruling on the issues there argued. It should be noted that, as a result of hearing the observations of the parties on the question of a possible reference, the court had invited counsel on both sides to attempt to agree certain amendments to the draft reference which had been provided to the parties by the court. Counsel very helpfully supplied an agreed amended version of the reference. On further consideration the court made a number of, relatively minor, further adjustments. The final form of the reference was annexed to the Ruling of the Court delivered on the 31st July.

  580. It should also be recorded that counsel for the State did not strongly press the suggestion that no reference was appropriate. In addition, counsel on both sides were agreed that if there was to be a reference it should encompass not simply questions concerning the validity of the Council Decision but also questions arising from the ESM Treaty issue and a question concerning the entitlement of a Member State to enter into and ratify the ESM Treaty pending the entry into force of the Council Decision.

  581. It followed that all of the EU issues which arose in these proceedings were referred by this court to the Court of Justice. This court requested the Court of Justice to apply to the reference the accelerated procedure pursuant to Art. 104a of the Rules of Procedure of the Court of Justice. The result of the reference is still awaited.

  582. In addition, however, on the 31st July this court ruled that the ESM Treaty did not involve a transfer of sovereignty so as to make its ratification by Ireland incompatible with the Constitution. In addition this court refused the application for an interlocutory injunction restraining the State from ratifying, approving or accepting the ESM Treaty pending the final determination of these proceedings. The court went on to indicate that judgments on those latter issues would be delivered at a future date. This judgment is directed towards setting out the reasons why I support the decision of the court on both the sovereignty claim and the injunction claim. I propose to turn first to the sovereignty claim and on that basis it seems appropriate to turn to the arguments made in the High Court on the issue of pure Irish constitutional law and to the judgment of Laffoy J. on that question.

  583. 3. Issues of Irish Constitutional Law – The High Court

  584. Section IV of the judgment of Laffoy J., which begins at para. 91, is entitled "The ESM Treaty and the Constitution". Most usefully that section of the judgment commences by noting three points of substantial agreement which had emerged in both the written submissions filed before the High Court and at the oral hearing before that court. In addition the judgment, at para. 95, summarises what are described as the three limbs to Deputy Pringle's constitutional argument.

  585. It is, therefore, helpful to start by noting the parameters of the claim made in the High Court. The three issues on which there appears to have been consensus start with the acceptance on behalf of the State that the ESM Treaty is not "necessitated" by the obligations of membership of the European Union. Like Laffoy J., I agree that the State was correct to accept that proposition. The State could not seek to rely on Art. 29.4.6° of the Constitution (which renders immune from constitutional challenge measures necessitated by membership of the European Union) so as to provide a legal basis for the ESM Treaty. Indeed, much of the argument advanced on behalf of the State centres on the fact that the ESM Treaty is an international agreement such that the State's participation is, it is said, voluntary and not, therefore, necessitated by membership of the EU.

  586. The second matter of agreement was that, for the purposes of proceedings in which the courts are invited to consider whether ratification by the State of the ESM Treaty, without the approval of the people in a referendum in accordance with Art. 46 of the Constitution, would be consistent with his constitutional rights, Deputy Pringle has standing. There were some disputes as to Deputy Pringle's standing to raise certain of the EU related arguments also raised in the proceedings. However, there was no contest as to his standing to make the Irish constitutional argument.

  587. Third, it was accepted by the State that the Government is not immune from judicial control in the conduct of the State's external relations (placing reliance on the judgment of Henchy J. in Crotty v An Taoiseach [1987] I.R. 713, at p.786). However, counsel for the State did, as noted by the trial judge, also seek to place reliance on the wide discretion enjoyed by the Government in foreign policy and in the conduct of international relations as noted by Kearns J. in Horgan v An Taoiseach [2003] 2 I.R. 468, at p.512.

  588. None of those matters were, therefore, in controversy before the High Court or this court save, perhaps, to the extent that there may be an issue as to the precise extent of the discretion enjoyed by the Government in the conduct of foreign affairs and international relations.

  589. It is next appropriate to turn to what were described as the three limbs of Deputy Pringle's argument for contending that the ESM Treaty is incompatible with the Constitution. As noted by Laffoy J. at para. 95 of her judgment, counsel for Deputy Pringle had submitted a summary of the grounds underlying his claim which formed the basis of the trial judge's analysis of the issues which arose. The three limbs identified are derived from that summary.

  590. The first limb was to the effect that the ESM Treaty allegedly constitutes such a degree of delegation of sovereignty that it is incompatible with the Constitution and, as a consequence, that a referendum to amend the Constitution is necessary to permit ratification of the ESM Treaty and Ireland's participation in the ESM. This is the sovereignty claim. As noted by the trial judge the argument under this heading is based primarily on the decision of this court in Crotty.

  591. The second limb involved an argument that the implementation of the ESM Treaty in the manner contemplated involves an impermissible transfer from the Oireachtas of a degree of monetary and budgetary power to the Executive, and, in particular it is said, to the Minister for Finance, which infringes the Constitution. This is the power transfer claim. A little needs to be said about the background to this argument. While the case was at hearing before the High Court the 2012 Act was before the Oireachtas. That Act was enacted after the hearing was concluded but before judgment was delivered in the court below. Deputy Pringle had sought to amend his claim to include a challenge to the validity of the 2012 Act. A question arose in the High Court as to the extent to which it was possible, given that the 2012 Act had not been passed by the Oireachtas and signed into law by the President, for the courts to entertain such a challenge. However, by the time Laffoy J. came to make her ruling, the 2012 Act had become law and the judgment of the trial judge deals, therefore, with the specific challenge brought to the constitutionality of that Act. However, as the 2012 Act was concerned with the internal means adopted by Ireland to implement the ESM Treaty, rather than with the capacity of Ireland to ratify the ESM Treaty and participate in the ESM, this court did not, as pointed out, consider that the issues arising (being those which derive from the power transfer claim) were of the same degree of urgency and those questions were left over for further consideration.

  592. The third limb of Deputy Pringle's challenge was to the effect that the ESM Treaty is incompatible with European Union law and in fundamental contradiction to the EU treaties. On that basis it was argued that the Constitution was breached. While the trial judge considered, and rejected, that argument there was a question as to whether it was either necessary or appropriate for this court to consider those issues at this stage.

  593. However, as pointed out earlier, it seemed to me that the third limb of Deputy Pringle's argument was entirely dependant on it being established that there was an incompatibility or inconsistency between the ESM Treaty and the provisions of the EU treaties. Those questions were to be and have been referred to the Court of Justice. In the event that the Court of Justice rules in favour of Deputy Pringle in such a way as renders it incompatible with the EU treaties for all Member States who are members of the euro zone to participate in the ESM then it is difficult to envisage any circumstances in which the ESM could survive. It follows that, in those circumstances, the question of whether any such incompatibility with the EU treaties might also render participation by Ireland in the ESM inconsistent with Irish constitutional law could hardly arise in practice. If participation in the ESM is not found by the Court of Justice to be incompatible with the EU treaties then this latter argument of Irish constitutional law does not arise. It follows that no useful purpose would have been achieved by attempting to resolve that question of Irish constitutional law as a matter of urgency as any issues which might, in theory, arise under that heading would inevitably be answered, one way or the other, as a matter of practicality, by the result of the reference. For those reasons I supported the court's decision not to address that issue at this stage.

  594. In the light of that consideration and of the deferral of the issues arising under the power transfer claim until after a result of the reference becomes known, it follows that the only issues of Irish constitutional law on which this court has already ruled are the issues arising under the sovereignty claim. As pointed out, the arguments which arise under that heading stem from the decision of this court in Crotty. I, therefore, turn to a consideration of that case.

  595. 4. Crotty

  596. Crotty was concerned with the ratification by Ireland of the so called Single European Act ("the SEA"), but insofar as this court held that ratification without an amendment to the Constitution was impermissible, the decision was concerned with those aspects of the SEA which required coordination of foreign policy. It is logical, in my view, therefore, to start with an analysis of the relevant provisions of the SEA which were found, in Crotty, to give rise to a potentially impermissible transfer of sovereignty. Those provisions were found in Title III of the SEA.

  597. In the head note to the report of Crotty, at pp.713-714, the relevant provisions are described in the following way:–

  598. Title III of the SEA embodied a separate treaty whereby each of the High Contracting Parties agreed to adapt its foreign policy positions to those of the others and refrain from impeding a consensus and joint action within a structured framework known as European Political Cooperation.

  599. In characterising, for the purposes of his judgment, the commitments which would be entered into by Ireland on ratifying the SEA so far as Title III was concerned, Walsh J. noted the following at pp.781 and 782:–

  600. It commits the State, and therefore all future Governments and the Oireachtas, to the other Member States to do the following things:–

    1.

    To endeavour to formulate and to implement a European foreign policy.

    2.

    To undertake to inform or consult the other Member States on any foreign policy matters of general interest (not just of common interest) so as to ensure that the combined influence of the States is exercised as effectively as possible through co-ordination, the convergence of their positions and the implementation of joint action.

    3.

    In adopting its position and in its national measures the State shall take full account of the position of the other Member States and shall give due consideration to the desirability of adopting and implementing common European positions.

    4.

    The State will ensure that with its fellow Member States common principles and objectives are gradually developed and defined.

    5.

    The State shall endeavour to avoid any action or position which impairs the effectiveness of the Community States as a cohesive force in international relations or within international organisations.

    6.

    The State shall so far as possible refrain from impeding the formation of a consensus and the joint action which this could produce.

    7.

    The State shall be ready to co-ordinate its position with the position of the other Member States more closely on the political and economic aspects of security.

    8.

    The State shall maintain the technological and industrial conditions necessary for security of the Member States and it shall work to that end at national level and, where appropriate, within the framework of the competent institutions and bodies.

    9.

    In international institutions and at international conferences which the State attends it shall endeavour to adopt a common position with the other Member States on subjects covered by Title III.

    10.

    In international institutions and at international conferences in which not all of the Member States participate the State, if it is one of those participating, shall take full account of the positions agreed in European Political Cooperation.

  601. Likewise Henchy J., at p.785, characterised the principal courses of conduct to which the High Contracting Parties bound themselves in the following terms (being a quote from s.2 of Art. 30 of the SEA):–

  602. (a)

    The High Contracting Parties undertake to inform and consult each other on any foreign policy matters of general interest so as to ensure that their combined influence is exercised as effectively as possible through coordination, the convergence of their positions and the implementation of joint action.

    (b)

    Consultations shall take place before the High Contracting Parties decide on their final position.

    (c)

    In adopting its positions and in its national measures each High Contracting Party shall take full account of the positions of the other partners and shall give due consideration to the desirability of adopting and implementing common European positions.

    In order to increase their capacity for joint action in the foreign policy field, the High Contracting Parties shall ensure that common principles and objectives are gradually developed and defined.

    The determination of common positions shall constitute a point of reference for the policies of the High Contracting Parties.

    (d)

    The High Contracting Parties shall endeavour to avoid any action or position which impairs their effectiveness as a cohesive force in international relations or within international organizations.

  603. Henchy J. characterised the effect of those provisions of Title III as giving rise to a situation where, on ratification, "each State's foreign policy will move from a national to a European or Community level." In addition Henchy J. noted that, at p.785, apart from becoming bound to endeavour jointly to formulate and implement a European foreign policy, "each Member State will become specifically bound to inform and consult its fellow-members, to refrain from deciding on a final position as to an issue of foreign policy without prior consultations, to take full account of the positions of the other partners in adopting its positions and in its national measures, to ensure that common principles and objectives are gradually developed and defined, and to recognise that the determination of common positions shall constitute a point of reference."

  604. On that basis Henchy J. expressed the view that it was clear that each Member State would immediately, on ratification, "cede a portion of its sovereignty and freedom of action in matters of foreign policy".

  605. Likewise Walsh J., at pp.780 and 781, characterised the relevant provisions in the following terms:–

  606. What the Treaty does is to commit the State to pursuing a policy which has, inter alia , as one of its objectives the transformation of the relations of Ireland with the other Member States of the European Communities into a European Union.

  607. It is against the backdrop of those provisions that the judgments of the majority in this court in Crotty need to be analysed. The key passages from those judgments seem to me to be as follows. First, Walsh J. said the following:–

  608. All of these matters impinge upon the freedom of action of the State not only in certain areas of foreign policy but even within international organisations such as the United Nations or the Council of Europe. That latter effect of the Treaty could amount to the establishment of combinations within these organisations. In touching upon the maintenance of the technological and industrial conditions necessary for security the Treaty impinges upon the State's economic, industrial and defence policies. The obligation on the High Contracting Parties after five years to examine whether any revision of Title III is required does not give the Treaty a temporary character. [p.782]

    ....

    In enacting the Constitution the people conferred full freedom of action upon the Government to decide matters of foreign policy and to act as it thinks fit on any particular issue so far as policy is concerned and as, in the opinion of the Government, the occasion requires. In my view, this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures, and so to bind the State in its freedom of action in its foreign policy. The freedom to formulate foreign policy is just as much a mark of sovereignty as the freedom to form economic policy and the freedom to legislate. The latter two have now been curtailed by the consent of the people to the amendment of the Constitution which is contained in Article 29, s. 4, sub-s. 3 of the Constitution. If it is now desired to qualify, curtail or inhibit the existing sovereign power to formulate and to pursue such foreign policies as from time to time to the Government may seem proper, it is not within the power of the Government itself to do so. The foreign policy organ of the State cannot, within the terms of the Constitution, agree to impose upon itself, the State or upon the people the contemplated restrictions upon freedom of action. [p.783]

    In addition Walsh J. suggested that the "essential nature of sovereignty is the right to say yes or to say no" (p.781).

  609. In coming to the same overall conclusions Henchy J. said the following:–

  610. The essence of this fundamental transformation in the relations between the Member States of the European Communities is that they are no longer to have separate foreign policies but are, as far as possible, to merge their national foreign policies in a European (i.e. Community) foreign policy and to work together in the manner indicated, so as to implement what is called European Political Cooperation, with a view to achieving eventual European union. [p.785]

    ....

    It appears to me that this affirmation means that the State's right to conduct its external relations is part of what is inalienable and indefeasible in what is described in Article 5 as ‘a sovereign, independent, democratic State.’ It follows, in my view, that any attempt by the Government to make a binding commitment to alienate in whole or in part to other states the conduct of foreign relations would be inconsistent with the Government's duty to conduct those relations in accordance with the Constitution. [p.787]

    ....

    A perusal of Title III of the SEA satisfies me that each ratifying Member State will be bound to surrender part of its sovereignty in the conduct of foreign relations. That is to happen as part of a process designed to formulate and implement a European foreign policy. The freedom of action of each state is to be curtailed in the interests of the common good of the Member States as a whole. [p.787]

  611. In addition Hederman J. came to the following view:–

  612. It appears to me that the essential point at issue is whether the State can by any act on the part of its various organs of government enter into binding agreements with other states, or groups of states, to subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interests of other states, as distinct from electing from time to time to pursue its own particular policies in union or in concert with other states in their pursuit of their own similar or even identical policies. [p.794]

  613. Before going on to analyse the reasoning of the majority of this court in Crotty there are some other aspects of the decision in that case which bear noting. One feature of Crotty was a challenge brought to the validity of the European Communities (Amendment) Act 1986 ("the 1986 Act") having regard to the provisions of the Constitution. The terms of the SEA concerning foreign policy cooperation were not affected by the 1986 Act. Given that there was a direct challenge to the constitutionality of the 1986 Act a single judgment of this court was delivered by Finlay C.J.. For the reasons set out at pp.769 and 770, this court came to the view that the then European Community was "a developing organism with diverse and changing methods for making decisions and an inbuilt and clearly expressed objective of expansion and progress, both in terms of the numbers of its Member States and in terms of the mechanics to be used in the achievement of its agreed objectives".

  614. In that context Finlay C.J. went on to state the following:–

  615. Having regard to these considerations, it is the opinion of the Court that neither the proposed changes from unanimity to qualified majority, nor the identification of topics which while now separately stated, are within the original aims and objectives of the EEC, bring these proposed amendments outside the scope of the authorisation contained in Article 29, s. 4, sub-s. 3 of the Constitution. As far as Ireland is concerned, it does not follow that all other decisions of the Council which now require unanimity could, without a further amendment of the Constitution, be changed to decisions requiring less than unanimity.

  616. Two aspects of that passage require comment. First, it is clear that absence of unanimity was not considered, of itself, to necessarily involve a transfer of sovereignty. Some competences which had already been conferred on the then European Economic Community ("EEC") on the basis of requiring a unanimous decision were changed, as a result of the relevant provisions of the SEA, so that decisions could be made on the basis of qualified majority voting. That change was not, of itself, on the facts of Crotty, found to involve a transfer of sovereignty. It should, however, also be noted that Finlay C.J. cautioned against what might be described as a path of gradualism by noting that it did not follow that there could be a complete alteration, in all cases, of the requirement for unanimity without a transfer of sovereignty thus leading to a requirement for a change in the Constitution.

  617. In like vein, Henchy J., in that portion of the judgment concerned with foreign policy cooperation, said the following, at p.786:–

  618. Those and other commitments expressed in Article 30 make manifest that, although the approach to the ultimate aim of European Union is to be reached by a pathway of gradualism, each Member State will immediately cede a portion of its sovereignty and freedom of action in matters of foreign policy. National objectives and ideological positions must defer to the aims and decisions of an institution known as European Political Cooperation, which is to work in tandem with the European Communities. A purely national approach to foreign policy is incompatible with accession to this Treaty. The methods of co-operation between the Member States, which hitherto have been informal, aspirational or, at most, declaratory (as under the Stuttgart Declaration), now pass into a realm of solemnly covenanted commitment to the conduct of foreign policy in a way that will lead to European political union, at least in the sphere of foreign policy. In that respect, Title III of the SEA is the threshold leading from what has hitherto been essentially an economic Community to what will now also be a political Community.

  619. Thus both the judgments of Finlay C.J. and Henchy J. emphasised a cautionary approach to gradualism. It does always need to be kept in mind that it is not permissible to do by four separate small steps that which could not be done in one giant leap. However, what persuaded Henchy J., along with the majority, to find that the ratification of the foreign policy cooperation elements of the SEA was inconsistent with the Constitution was that those provisions amounted to an immediate ceding of sovereignty and freedom of action in the matter of foreign affairs.

  620. On a narrow reading of some of the passages cited it might be said that this court, in Crotty, came to the conclusion that the overall architecture of the Irish Constitution does not permit the Government, in exercise of its power to conduct the foreign policy of the State in accordance with Art. 29.4.1° of the Constitution, to enter into binding arrangements with other countries which would, in any way, have the effect of circumscribing Ireland's freedom of action in the foreign policy field. For reasons which I hope to demonstrate it does not seem to me that such a conclusion can be found in the judgments of this court in Crotty. If such were to be the proper analysis of the reasoning of the majority of this court in Crotty, then I would, respectfully, disagree with it.

  621. The backdrop to Crotty is, of course, the constitutional architecture relating to executive power and the conduct of international relations. Article 29.4.1° provides that the executive power of the State "in or in connection with its external relations" is to be in accordance with Art. 28, exercised "by or on the authority of the Government". Art. 28.2, of course, provides that the executive power of the State is to be, subject to the provisions of the Constitution, exercised by or on the authority of the Government. Thus, the Constitution is explicit that, in the conduct of the foreign policy of the State, the Government is constrained by the provisions of the Constitution.

  622. Article 29.5 provides a number of specific examples of express constitutional constraints that apply to the Government in exercising its foreign policy or external relations mandate. Article 29.5.1° requires that every international agreement to which the State becomes a member must be laid before Dáil Éireann, while Art. 29.5.2° provides that the State is not to be bound by an international agreement involving a charge upon public funds unless the terms of the agreement have been approved by Dáil Éireann. The only exception to these later requirements applies where the relevant agreement is of a technical and administrative character. Separately, Art. 29.6 provides that an international agreement is not to become part of domestic law, unless so determined by the Oireachtas. A fourth requirement is of a more general nature (but nonetheless required by Art.28.2) and it might be expressed as being the requirement that an international agreement not infringe the terms of the Constitution.

  623. It is important to note, therefore, that the Constitution does not require, as a matter of principle, that all international agreements be put to the people for approval through a referendum. It is only where an international agreement (either indirectly or by design) breaches the terms of the Constitution as it then stands that there is a requirement for an appropriate amendment to be made to the Constitution. The question of whether an international agreement infringes the Constitution is ultimately a matter for the determination of the courts and, in accordance with Art. 34.4.6°, the decision of this court, in that regard, is final and conclusive.

  624. The question of how the terms of a particular international agreement interacted with the terms of the Constitution was one of the issues facing this court in Crotty. As described earlier, the particular aspect of concern within the SEA was the requirements on the coordination of foreign policy. It was on the facts of those requirements that this court found that Title III of the SEA amounted to a potentially impermissible transfer of sovereignty, thus breaching the Constitution and in turn requiring a referendum.

  625. When speaking of international agreements, it is, of course, necessary to distinguish a particular type of such agreement or Treaty, to which the Constitution accords special status. Article 29.4.6° grants a special status to the EU treaties in that acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union are deemed not to infringe the Constitution. A similar provision, Art. 29.10, applies in respect of the Treaty on Stability, Coordination and Governance in the Economic and European Monetary Union ("TSGC"). Thus the EU Treaties, from time to time recognised by appropriate amendments to the Constitution, are by definition consistent with the Constitution. The only issue which arises, in the light of Crotty, is as to whether changes in the EU Treaties are of a type which would bring the scope of the competences of the EU beyond those which might be said to have been authorised by the Constitution in its then current form in a way which would render ratification of the new amending Treaty itself a breach of the Constitution. Against the background of that general constitutional architecture it is next necessary to say something about the conduct of foreign policy.

  626. The Government is given a very wide discretion as to how to conduct the foreign policy of this State under the Constitution. (See Horgan v An Taoiseach [2003] 2 I.R. 468). It would be a strange conclusion indeed if that broad discretion was to mean that the Government could not, as a means of exercising that discretion and, thus, exercising its sovereignty, enter into what must be the most usual way in which sovereign states exercise their sovereignty, i.e. by agreeing with other sovereign states to pursue a specified policy in a specified way. Many legitimate policy objectives which the Government, in exercise of its constitutional entitlement to formulate and implement foreign policy, might wish to pursue can only, as a matter of practicality, be achieved by entering into bi-lateral or multi-lateral treaty arrangements with other countries of like or similar mind with a view to securing specified ends.

  627. Obviously, such treaties, if they involve an exposure to financial obligations, require the approval of the Dáil in accordance with Art. 29.5.2° of the Constitution. However, subject to that requirement, what limitations can properly be said to lie on the discretion of the Government to enter into international treaties?

  628. It seems to me that the limitation can be found in the language of the judgments of the majority in Crotty. Walsh J., at p.783, spoke of the limitation as being one which did not permit the Government "to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way .... so to bind the State in its freedom of action in its foreign policy". Henchy J., at p.787, spoke of the Government not being permitted "to alienate in whole or in part to other States the conduct of foreign relations". Henchy J. also spoke of Title III of the SEA as amounting to a fundamental transformation in relations between the Member States of the then European Communities while Hederman J., at p.794, spoke of the limitation as being one which did not permit the Government "to subordinate, or to submit, the exercise of the powers bestowed by the Constitution to the advice or interest of other states".

  629. On that basis it seems to me that the overall position is quite clear. The Government enjoys a wide discretion, under Art. 29.4, to enter into international treaties subject only to the obligation to obtain the approval of the Dáil, if there is a commitment to financial expenditure, or that of the Oireachtas, if it is considered necessary to change domestic Irish law so as to comply with obligations undertaken by the treaty concerned. The limit on the discretion which the Government holds arises where the relevant treaty involves Ireland in committing itself to undefined policies not specified in the treaty and in circumstances where those policies, which Ireland will be required to support, are to be determined not by the Government but by institutions or bodies specified in the treaty. It is an abdication, alienation or subordination of policy formation and adoption which is not permitted. A transference of the means of implementing a policy agreed by the Government, and specified in the treaty concerned, to an appropriate implementation institution or body may be permitted provided that it does not go so far as to amount, in substance, to an abdication, alienation or subordination of the role of government under the Constitution.

  630. Very many international treaties involve an acceptance, at the level of international law, that Contracting States will be bound by certain obligations. If, in accordance with the policies of the institutions of the United Nations, sanctions are imposed on a country in accordance with the UN treaties, Ireland will be bound, as a matter of international law, to enforce those sanctions. That would be so even if it were to transpire that the Irish Government was not entirely comfortable with the imposition of sanctions on the country in question. However, the underlying policy behind the imposition of sanctions by the UN (including the circumstances in which a decision to impose sanctions might be adopted) is one to which Ireland subscribed by joining the United Nations. The implementation of that policy on the facts of any individual case is a matter which, under the UN treaties, is to be determined by the competent bodies within the UN. Short of leaving the UN, Ireland is bound to meet the obligations imposed by decisions made by competent bodies within the UN. Many other examples could be given.

  631. Against that general background it is necessary to turn to the provisions of the ESM Treaty to which counsel for Deputy Pringle draws attention for the purposes of suggesting that ratification and acceptance of the Treaty by Ireland would amount to a constitutionally impermissible transference of sovereignty.

  632. 5. The ESM Treaty

  633. It will be necessary to touch on some aspects of the detail of the ESM Treaty and, indeed, certain aspects of that treaty which may not be absolutely clear, in due course. However, the underlying structure of the Treaty can hardly be doubted. The Treaty establishes what is described as an international financial institution given the name ESM. As pointed out earlier the members of the ESM are the members of the European Union who are part of the euro zone. The ESM Treaty contemplates that any other EU Member States who become members of the euro zone may join the ESM.

  634. The key objective of the ESM Treaty is, as is pointed out in Art. 3, to "mobilise" funding so as to provide support to members in financial difficulty where the provision of that support is "indispensable to safeguard the financial stability of the euro area as a whole and of its Member States".

  635. It is, at this stage, appropriate to note some relevant features of the governance of the ESM. The principal means of governance is by a Board of Governors which is provided for in Art. 4. The minister responsible for finance of each member (including, therefore, the Irish Minister for Finance) is to be a member of the Board of Governors (see Art. 5.1), although there is provision for an alternate. Most of the important decisions of the Board of Governors are required to be taken by what is described as "mutual agreement" which under Art. 4.3 requires unanimity. However, there are two exceptions to that situation. First, Art. 4.4 allows a decision to grant financial assistance to a member (but only such a decision) to be taken by a qualified majority of 85% where the Commission of the European Union and the European Central Bank both conclude that a failure to urgently adopt a decision to grant such assistance would be to "threaten the economic and financial stability of the euro area". It is unnecessary to consider the precise circumstances in which the derogation set out in Art. 4.4 might apply. It is acknowledged on behalf of the State that there may be circumstances where, therefore, a decision to give financial assistance (as opposed to other types of decisions) could be taken without Ireland's agreement. The second manner in which it is possible that important decisions could be made without Ireland's agreement is to be found in Art. 4.8 whereby a member who has failed to pay sums required under the Treaty will, so long as the relevant sums remain outstanding, lose its entitlement to vote.

  636. At least at a general level the overall situation seems clear. There are limited circumstances, which I have set out, in which it is possible that a decision to provide financial assistance to a member may be made without unanimity and, therefore, by necessary implication, without Ireland's agreement. Also Ireland may lose its vote if Ireland is in arrears. However, in all other circumstances important decisions of the ESM must be taken by a unanimous decision of the Board of Governors including, as it will, if ratified by Ireland, Ireland's representative.

  637. The mechanism adopted to allow the ESM to have the funds necessary to provide financial assistance is to require the members of the ESM to provide capital and to permit the ESM itself to engage in borrowing. Capital is to be provided both on a paid-in basis and an authorised basis. The authorised capital stock is defined as €700 billion divided in a proportionate way between the Member States in a manner calculated in accordance with Annex I to the ESM Treaty (see Art. 8.1). Ireland's share is specified (in Annex II) as being €11,145,400,000. Likewise the so called "paid-in" shares are to total €80 billion with a proportionate allocation to each member.

  638. Thus what is contemplated is that the members of the ESM will, in a relatively short period of time, contribute €80 billion to the ESM in a manner proportionate to their economies. The members will also have an allocation of authorised capital which they can be called on to contribute in circumstances specified in the Treaty, up to a total collective sum of €700 billion. While there was some debate at the hearing about the precise borrowing provisions of the ESM Treaty there is no dispute but that the ESM is entitled to borrow although it is clear (see Art. 8.5) that the liability of each ESM member is limited to its share of the authorised capital stock at its issue price. The exposure of each member is, therefore, limited to the value of its share of the authorised capital stock unless the authorised capital stock is increased in accordance with the terms of the Treaty.

  639. Such an increase can only occur in accordance with the terms of Art. 10 which provides that the Board of Governors may review the adequacy of the authorised capital stock and can decide to alter that stock by making appropriate amendments both to the total and to the share of each member. However, it seems to me to be clear from Art. 10 that such a decision of the Board of Governors can only "enter into force after the ESM Members have notified the Depository of the completion of their applicable national procedures".

  640. As has been pointed out there are two circumstances in which a member such as Ireland might not have the opportunity to exercise an effective veto over a decision of the Board of Governors which is otherwise required to be unanimous. While counsel for Deputy Pringle suggested that the provisions of Art. 10 might be ambiguous it seems to me that its terms are clear. In order for an increase in authorised capital stock to "come into effect", "applicable national procedures" require to be completed. As an increase in authorised capital stock beyond the current sum of €700 billion would necessarily carry with it (unless it arose solely out of an increase in the membership of the ESM) an increase in the allocation of shares to Ireland with the consequential exposure of Ireland to an increased liability to meet any call on the as yet not "paid-in" shares, it follows that the Irish Constitution would require any such measure to be passed by the Dáil as part of Ireland's national procedures. I, therefore, respectfully disagree with the analyses of the circumstances in which the authorised capital of the ESM can be increased as suggested by Hardiman J. in his dissenting judgment. If the Dáil does not approve an increase then Ireland, as an ESM member, will not be able to complete "applicable national procedures" and the increase will not be able to "enter into force".

  641. It seemed to me that that analysis leads to two conclusions. The first might arise in circumstances where the Irish Government is in favour of an increase in authorised capital so that the Minister for Finance of the day, in his/her capacity as a member of the Board of Governors of the ESM, votes in favour of such a measure. The second might arise where Ireland is against the proposed increase in authorised capital but is unable in practice to block it for one or other of the reasons identified earlier. However, in either eventuality the increase cannot come into effect until all members have completed their applicable national procedures which, in practical terms, means that it is not possible to increase the authorised capital of the ESM without, amongst other things, that measure being approved by Dáil Éireann (and, doubtless, going through many other national procedures under the constitutional architecture of the other members).

  642. The combination of the limited liability of the members of the ESM to which reference has already been made and the fact that the authorised capital of the ESM cannot be increased without the approval of Dáil Éireann means, in substance, that the exposure of Ireland to the ESM is capped, in the absence of approval by Dáil Éireann, at the sum of €11.145 billion to which reference has already been made.

  643. I have already noted that there was some debate as to the precise parameters of the borrowing entitlement of the ESM. One preliminary point should be noted. There is already in being a funding mechanism termed the European Financial Stability Facility (the "EFSF"). While not material to the issues which this court has to decide it should be noted that the ESM Treaty contemplates that the ESM will take over the position of the EFSF. Certain of the transitional provisions of the ESM Treaty, therefore, make reference to total sums by reference both to the position of the ESM and the EFSF. Recital 6 of the ESM Treaty refers to the fact that the initial maximum lending volume of the ESM is set at €500 billion (including any outstanding EFSF stability support). The same recital notes that a reassessment of that amount is to occur "prior to entry into force of this Treaty". The recital further notes that the Board of Governors may increase the maximum lending volume in accordance with Art. 10.

  644. Thereafter, Art. 10 does make provision for a review by the Board of Governors of the maximum lending volume. Curiously, however, none of the articles of the Treaty actually make provision for a maximum lending volume as such (the only reference being in the recital to which I have referred). Further, while Art. 10 speaks of the Board of Governors carrying out a review of the maximum lending volume, no operative provision for an increase in that volume is to be found in Art. 10 although, again, Recital 6 seems to contemplate such a possibility. Finally, while that recital seems to contemplate a potential reassessment of the maximum lending volume prior to the Treaty coming into force, no particular mechanism for the carrying out of that reassessment is specified such that it is difficult to see how such a reassessment could be operative in the absence of an amendment to the Treaty.

  645. There is, therefore, some confusion as to the precise manner in which the maximum lending volume is to operate. However, it seems clear that, irrespective of how the maximum lending volume is determined, the ESM can only give financial assistance out of money which it has, either on the basis of capital contributed by its members or money obtained from financial institutions or on the financial markets. Irrespective of how much the ESM borrows, the members' limited liability means that the exposure of those members cannot, without the agreement of each member in accordance with the appropriate national acceptance procedures relevant to that member, exceed the authorised capital attributable to the relevant member. It follows that, irrespective of the amount of borrowing that the ESM engages in, Ireland's exposure is capped at the sum of €11.145 billion unless and until an approval of a larger capital allocation to Ireland is obtained from Dáil Éireann. Extra borrowing by the ESM does not expose Ireland to any larger potential liability. In those circumstances I found it difficult to see how there can be an argument that the borrowing entitlement of the ESM (however the relevant provisions may be interpreted and operate) can amount to a diminution in Irish sovereignty. Ireland has no obligation to cover such borrowings beyond the monies already committed to the ESM by reference to Ireland's allocation of the authorised capital.

  646. There was argument at the hearing before this court on what might be said to be the practicalities of a situation which might develop where there was a demand for further funding for the purposes of the ESM which, whether as a matter of accounting or as a matter of practicality (derived from an inability to borrow further) exceeded the current authorised capital. I do not doubt that circumstances could arise where it might be perceived that there was a political imperative to increase the authorised capital of the ESM. Doubtless, in such circumstances, there would be significant political pressure on Ireland to agree to an increase. However, it is clear that the Government of Ireland, through the Minister for Finance as a governor of the ESM, would, in almost all circumstances, retain the right to say no and, in any event, Dáil Éireann, in all circumstances, retains the right to say no.

  647. There are many circumstances in which both the Government and the Oireachtas may come under significant practical political pressure, either domestically or internationally, to adopt certain measures. That is the way of the world. However, the architecture of the Irish Constitution is concerned with where the final decision lies. The fact that institutions of government may, as a matter of practical politics, from time to time have to make decisions or bend their policies in the direction of the wishes of other countries does not, of itself, breach that model. That constitutional architecture may be interfered with when the institutions of government enter into commitments which amount to an abdication, alienation or subordination of the powers which the Constitution itself gives to those institutions.

  648. In the domestic field many schemes involve the expenditure of funds either as a result of legislation or administrative schemes for which the Dáil votes to allocate money. Changes in such schemes can be a matter of significant political controversy. Indeed, as current conditions demonstrate, it is often easier to resist pressure to implement a new scheme than to reverse a scheme already in place. However, such practical political effects do not alter the situation which is that the Oireachtas (if it be legislation) or the Government (with the support of the Dáil if it be administrative) retains the ultimate decision. The fact that previous action (i.e. the implementation of a scheme) may make it politically harder to change policy is a practical reality. However, the constitutional architecture is preserved because the decision is made by those organs of government which the Constitution specifies.

  649. Against the background of that analysis of the principal features of the ESM Treaty I now turn to the arguments made on behalf of Deputy Pringle which suggest that Ireland's participation in the Treaty would amount to an impermissible diminution in Irish sovereignty.

  650. 6. Deputy Pringle's Arguments

  651. While a range of more detailed arguments were addressed on his behalf, at the core of the case made by Deputy Pringle is an assertion that the Government cannot agree to provide, and the Oireachtas cannot commit, money for the purposes of the ESM Treaty because to do so amounts to the adoption of an irreversible policy not capable of being withdrawn from. On that basis it is said that, to use the words of Walsh J. in Crotty, Ireland loses, by ratifying the ESM Treaty, the right to say no.

  652. In putting forward that argument reliance was placed on a number of aspects of the Treaty. First it was said that the Treaty is permanent. Attention was drawn to the fact that there are no express provisions contained in the ESM Treaty permitting a member of the ESM to withdraw. In that context it should be noted that that the State argued that there is an implied entitlement to withdraw. That is an issue considered but, for reasons set out in her judgment, not dealt with by the trial judge and is one to which I will return.

  653. Second, attention is drawn to the two bases already analysed on which it is possible that what might loosely be called a lending transaction in favour of a member can be put into effect without the support of each of the ESM members. Counsel for the State accepts that that analysis is correct and that it is possible for a "lending" decision to occur without the support of Ireland in those limited circumstances. Given that agreed position on the functioning of the ESM Treaty it is argued on behalf of Deputy Pringle that future policy, in the sense of a decision as to whether money placed into the ESM by Ireland should be lent to other members, will be capable of being determined without Ireland’s agreement. On that basis it is said that Ireland has committed not to change its policy in a way analogous to the manner in which Ireland had committed to adapt its foreign policy to those of the other Member States of the then European Community which was found to be constitutionally impermissible without a referendum in Crotty.

  654. Next, attention was drawn to what were said to be the unlimited borrowing powers of the ESM. I have already addressed the somewhat unclear provisions of the ESM Treaty in this regard. However, for the reasons then noted, being that Ireland cannot, by virtue of the limited liability of the ESM, have any exposure in respect of ESM borrowings which exceed the amount of the authorised capital applicable to Ireland which the State would commit to, in the ESM Treaty, it follows that no question of loss of sovereignty under that heading can arise.

  655. Next reliance was placed on what was said to be the close interconnection between the TSGC and the ESM Treaty. Indeed both Treaties are described, in Recital 5 to the ESM Treaty, as complementary in “fostering fiscal responsibility and solidarity within the economic and monetary union”. It was said on behalf of Deputy Pringle that the ESM Treaty amounts, therefore, to a permanent and irreversible implementation of the policy behind both the TSGC and the ESM Treaty.

  656. Attention was also drawn to Art. 3 of the ESM Treaty which sets out its purpose (although, as counsel for the State noted, the title of Art. 3 is "purpose" and not "purposes"). The underlying requirement, as has already been noted, is that the giving of financial assistance is restricted to circumstances where it is considered that providing the relevant support is “indispensable to safeguard the financial stability of the euro area as a whole and of its Member States”. It was thus argued that the permanent policy inherent in the ESM is one which has as its primary focus the stability of the euro area as a whole with the provision of monies to that end. On that basis it was argued that a permanent and irreversible commitment by Ireland to such a policy is impermissible without the approval of the people on the basis of Crotty.

  657. Because the trial judge largely agreed with the submissions of the State on this aspect of the case it was, perhaps, hardly surprising that the written submissions filed on behalf of the State in this court were directed, to a significant extent, to expressing agreement with the relevant conclusions of the trial judge. In that context it is appropriate to turn to that aspect of the judgment of Laffoy J. which considered the sovereignty claim.

  658. 7. The High Court Judgment

  659. As described at para. 111 of her judgment, the nub of Deputy Pringle’s argument before the High Court on this issue (as it was before this court), was that Ireland’s participation in the ESM Treaty involved a transfer of sovereignty to the ESM because of the impact of such involvement on Ireland’s budgetary, economic and fiscal sovereignty involving, it was said, an open-ended, irreversible and permanent transfer of powers to an autonomous institution.

  660. In considering that matter, at para. 117, Laffoy J. indicated, correctly in my view, that the starting point was to identify what power the Constitution confers on the Government in relation to entering into an international treaty such as the ESM Treaty. Having reviewed a number of relevant provisions of the Constitution the trial judge noted that it was implicit in Art. 29.5.2° that the Government had power, subject to approval by Dáil Éireann, to enter into an international agreement, at least at the level of principle, which gives rise to financial liability on the part of the State. However the trial judge also noted that Crotty provides authority for the proposition that there are implicit restraints in the Constitution in relation to the manner in which the Government may exercise its power in relation to external relations.

  661. The trial judge went on, at para. 119, to suggest that the proper interpretation of Crotty is that the Constitution restrains the Government from abdicating or relinquishing in part its power to formulate and implement policy. For the reasons already set out in this judgment, in the section dealing with the judgment of this court in Crotty, I agree with the conclusions of the trial judge in that regard. On that basis it seemed to me to follow that the trial judge was correct when she suggested that the core question which arose in respect of this aspect of Deputy Pringle’s claim is as to whether the consequence of the ratification of the ESM Treaty will be that the formulation and implementation of the State's policy in relation to economic and monetary matters is to be significantly abdicated or subordinated to others.

  662. In seeking to answer that question the trial judge, at paras. 123 to 127 of her judgment, noted, correctly in my view, that neither Ireland nor any other member of the ESM assumes limitless financial liabilities. Laffoy J. went on, at para. 126, to decide that the fact that there were circumstances in which a decision to provide financial assistance could be made without Ireland’s agreement, but in furtherance of a policy to which Ireland had committed, could not amount to a transfer of sovereignty.

  663. Finally, and for completeness, it should be noted that Laffoy J. did not consider it either necessary or appropriate to reach a conclusion on the argument over whether a member of the ESM could withdraw. Like Laffoy J., it seems to me that it is appropriate to consider first whether there would be anything impermissible from a constitutional perspective in Ireland participating in the ESM Treaty (in the absence of a referendum) on the assumption that withdrawal is not possible and, therefore, without considering whether Ireland could withdraw. Given that the withdrawal issue involves an interpretation of an international treaty which, if it comes into effect by sufficient ratification, may have its own means of interpretation, it would, in my view, be preferable not to reach a conclusion on that question unless it was essential to the determination of these proceedings. On that basis I propose to consider the merits of Deputy Pringle’s claim.

  664. 8. Discussion

  665. It is important to start with sovereignty. As a general concept sovereignty is much debated both by political scientists and international (and of course constitutional) lawyers as well as other interested parties. However, it is important to start with recognition that the Irish Constitution does not simply embrace a general notion of sovereignty leaving it up to the courts to consider its parameters. It is true that the Constitution does use the term "sovereign" in both Art.1 which speaks of the sovereign right to, amongst other things, determine relations with other nations and in Art.5 which defines Ireland as a sovereign independent democratic State. However, the Constitution is, in many respects, quite specific about the model of sovereignty adopted. Article 15.2 confers on the Oireachtas "the sole and exclusive power" of law making. Article 34.1 requires that justice only be administered in courts established by law by judges appointed under the Constitution itself. As already noted the power of conducting foreign policy is conferred exclusively on the Government (Art. 29.4.1) as is the executive power of the State (Art. 28.2). The constitutional regime is clear. The judicial, legislative and executive organs of government are given exclusive power in their respective domains. The Constitution does not, by its clear terms, permit those powers to be given away or significantly shared with others. That constitutional restriction does not, of course, mean, for the reasons set out by O'Donnell J. in his judgment in this case, that there may not be an interaction between the way in which those organs of government may operate. However, that interaction is itself specified expressly by the terms of the Constitution.

  666. There may well be arguments in favour of models of sovereignty which see the ability of nations (and especially small nations) to achieve self determination as being enhanced by a pooling of sovereignty so as to give greater practical leverage at an international level. However, such models are not those adopted in the Irish Constitution except, of course, in those provisions of Art. 29 which recognise the supremacy of measures necessitated by EU membership. The starting point of any discussion has to be to acknowledge the model specified in the Constitution and the limitations it imposes. It is also necessary to note that the power with which this judgment is concerned (the power to conduct external relations) is one expressly conferred by the Constitution on the Government and not the Oireachtas (save for the requirements to obtain Dáil approval for measures involving financial commitment).

  667. It follows that the fact that Ireland is a sovereign state whose government or parliament has not the constitutional capacity to give away its sovereignty cannot be doubted. The terms "inalienable" and "indefeasible", as analysed by Hardiman J. in his judgment in this case make that clear. Powers conferred by the Constitution cannot be given away or "fettered", to use the term adopted by Hederman J. in Crotty. But in international relations, as in very many other areas of public and private life, freedom to act will often, as a matter of practicality, involve freedom to make commitments which will, to a greater or lesser extent, limit ones freedom of action in the future. Persons are free to enter into lawful contracts. However by so doing the person concerned may restrict their ability to enter into other contracts in the future. It is inherent in certain types of decision that the decision in question will have a reach into the future to a greater or lesser extent. It seems to me to follow that the mere fact that decisions taken now can have such a reach cannot mean, on any proper analysis, that the relevant decision is necessarily taken to amount to an impermissible restriction on freedom to act in the future. If it were to be otherwise, parties, both in the private, public and international spheres would, in truth, be deprived of a significant freedom of action.

  668. That is not to say that certain decisions may not be so far reaching and so diminishing of the freedom to act in the future that they can be said to amount to a denial of the very freedom exercised in making the decision in the first place. A person might commit to a contract of employment for (say) five years. In so doing it seems to me that such a person is exercising freedom of contract. To say that such a person has lost the freedom to deal with their services in whatever way they wished (within the law) would, in my view, be a mischaracterisation. Any contract of employment will, to some extent, restrict the right of the employee for some period into the future.

  669. On the other hand a contract which amounted to little more than indentured servitude or slavery might well legitimately be characterised as one which, although agreed to, would nonetheless entirely negate the very freedom to contract for one's services exercised in making the contract in the first place.

  670. Without pushing the analogy too far, it seems to me that there are parallels in the international sphere. The way in which international policy is pursued in a whole range of areas is by states entering into treaties whether bi-lateral or multi-lateral. In modern conditions many multi-lateral treaties involve the establishment of bodies or institutions with a greater or lesser permanence. At the level of principle, sovereign nations who enter into such agreements are exercising their sovereign right to adopt policy directed towards what they perceive to be their own advantage or in support of values which they wish to uphold. Inevitably entering into such treaties involves some diminution in freedom of action in the future. As a matter of international law countries are bound by the obligations which they undertake in treaties. The international community is entitled to expect that countries can be taken at their word most particularly when that word is expressed in the solemn form of a treaty. Having to be taken at your word means that your freedom of action is necessarily circumscribed. However, even then, as a matter of practicality, sovereign nations retain the ability to breach treaty obligations provided they are prepared to face what ever consequences, as a matter of law or politics, flow from such a decision.

  671. However there may be circumstances where the commitment entered into does, in truth, amount not to an exercise in sovereignty which has, as a necessary consequence, a narrowing of the freedom to act in the future but rather amounts to such a significant narrowing of future policy options so that it can be properly be said that there has been a transfer or pooling of sovereignty. This will be particularly so where those future policies by which the contracting parties are bound are as yet undecided and are to be determined in the future by others or by collective bodies.

  672. The real question on the issue of loss of sovereignty seems to me to turn on the nature of the commitments entered into and the extent to which those commitments can truly be said to involve an abdication of the powers conferred by the Constitution, an alienation to others of such powers or the subordination of those powers to the interests of others.

  673. Against that background it is appropriate to turn to the ESM Treaty itself. For the reasons already addressed I propose considering this issue, at least initially, on the assumption that it is not possible for a member to withdraw. In that sense counsel for Deputy Pringle argues that it is permanent. However it seemed to me that it is not appropriate to become overly focused on whether, in a technical sense, the ESM Treaty is permanent or not, i.e. whether any member can withdraw and if so in what circumstances. There is a very real sense in which the obligations of membership of the ESM Treaty are one off and will occur in the very near future. As already pointed out there is an immediate obligation to put up, over a short period of time, Ireland’s proportionate share of €80 billion. There is also an immediate commitment, approved of by the Oireachtas, to take up, if required under the terms of the Treaty, the balance of Ireland’s share of the authorised capital.

  674. However Ireland undertakes no further obligations under the Treaty. For the reasons already analysed it does not seem to me that there is any basis for suggesting that Ireland can be obliged, without a decision of the Dáil, to commit to putting up any further capital. Likewise, for the reasons already analysed, Ireland can have no liability, beyond the amount of authorised capital to which commitment will have been made if the Treaty is ratified, to make good any losses of the ESM. It follows that Ireland has really only one obligation under this Treaty (or perhaps one obligation in two parts). That obligation is to commit, if necessary, to making available capital up to the sum of €11.145 billion (with a portion of that capital being provided in early course).

  675. The ESM Treaty is, arguably, permanent in the sense that monies contributed, and monies in respect of which a commitment has been given which have not yet been called on, must be made available (at an appropriate time) for the purposes of the ESM indefinitely. However, it seems to me that there is a very significant difference indeed between giving a current and finite commitment to making monies available for a specified purpose, on the one hand, and giving a commitment to meet obligations, to be decided by others, on an indeterminate basis and in furtherance of policies not yet determined, on the other. It seems to me to be appropriate to characterise the ESM Treaty as one in which Ireland's obligations are current and immediate but where the practical consequences of those obligations, being the ability of the ESM to provide financial assistance to other members in accordance with a pre-ordained policy, may be indefinite. In that context it is important to draw attention to the very narrow purpose provided for in Art. 3 of the ESM Treaty. As correctly pointed out by counsel for the State it is a single purpose. It is clearly set out. It is true that the judgment as to whether the purpose is met on the facts of any individual case proposed for financial assistance is to be made by the Board of Governors and that there are limited circumstances in which such a decision could be made without Ireland's agreement. But it does not seem to me that those limited circumstances are material. Absence of unanimity does not necessarily mean a transfer of sovereignty as pointed out by Finlay C.J. in Crotty. The basis on which the money in this case can be utilised is fixed once and for all by the terms of the ESM Treaty.

  676. It is, of course, the case that decisions to provide financial assistance carry with them the possibility that monies provided may be lost. It is true, therefore, that those decisions could have an effect on the level of continuing monies available to the ESM and, to the extent that not all of the authorised capital had not been called in, to the need to invoke the provisions of the ESM Treaty to require further capital (up to the agreed limit) to be paid in. It is not, therefore, the case that decisions to provide financial assistance might have no effect on Ireland. Ireland might well have views as to whether it was appropriate, in all the circumstances, to lend to a particular member. However, the commitment given by Ireland on ratifying the ESM Treaty is one which enables the ESM to provide financial assistance in clearly defined circumstances. The fact that there may be very limited occasions when financial assistance could be provided against Ireland's wishes does not, in those circumstances, seem to me to fall far short of the circumstances where there could be said to be a material transference of sovereignty.

  677. Characterised in that way, it seems to me that the ESM Treaty is, as was argued by counsel for the State, an exercise in sovereignty rather than an abdication or transference of sovereignty. It involves an immediate commitment which is finite in the sense that it cannot be increased without the agreement of Dáil Éireann. It is no different, in principle, to the allocation of monies to any international purpose without the expectation of their return. The monies can be deployed, by whatever international body the monies are given to, in any manner within the remit of the body concerned. The fact that the sum is large does not necessarily render a commitment to such a sum as being one which is outside the competence of a sovereign state. It must, after all, be remembered that the total sum being committed to the ESM is only a fraction of the amounts which this State has had to commit to meeting its obligations in respect of the Irish banking system. It is not the function of the courts to consider the merits of the underlying policy behind any such decisions including the decision of the Government to agree to the ESM Treaty and the decision of Dáil Éireann to approve it.

  678. In addition, it seems to me that a comparison of the features of the SEA identified in the judgments of the majority in Crotty with the material features of the ESM Treaty bears close consideration. The ten commitments applying to all future Irish governments, as identified by Walsh J. in the passage from his judgment in Crotty already cited, involve a permanent obligation on the State to deal, in all respects, with its foreign policy in a manner designed to promote the formulation of a common European foreign policy. While the obligations undertaken were not specific they were overarching across all aspects of foreign policy and required, as Henchy J. noted, that national objectives must defer to the aims and decisions of the relevant European institutions. It seems to me that there is a very significant difference indeed between those types of obligations and those contained in the ESM Treaty. As pointed out the ESM Treaty involves a once-off, albeit significant, commitment to set up an institution designed to provide support for the euro (such support being, in the Government's view, in Ireland's interest as a member of the euro zone) where the only decisions which will be binding in any sense on Ireland, are decisions made by the ESM Board of Governors to provide financial assistance to other members of the ESM where such assistance is considered "indispensable to safeguard the financial stability of the euro area as a whole and of its Member States". That financial assistance must come from funds already committed by Ireland (with the approval of the Dáil) or from funds borrowed by the ESM in circumstances where there will be no recourse to Ireland. The ESM Treaty has a narrow, if important, policy objective to which an immediate commitment of substantial funds is made with the attainment of the specified objectives being left to a Board of Governors on which Ireland will have a representative. That Board of Governors will not make policy but rather will implement it.

  679. In passing I should note that, in my view, there may be circumstances in which a permanent and irreversible commitment to a very wide ranging set of policies in an important field, such that the Government lost the ability to ever change those policies in the future, might (even though the policies were specifically identified) cross the boundary of involving an impermissible ceding or pooling of the type of sovereignty found in the Irish constitutional model. However, it seems to me that the commitments which Ireland would make by ratifying the ESM Treaty fall a long way short of breaching any such boundary. I would leave to another case the question of determining with precision where any such boundaries might lie. For the purposes of this case it seems to me that the ESM Treaty can be distinguished from the aspects of the SEA which were under consideration in Crotty in the manner which I have already identified. The ESM Treaty does not involve a transference of the power to make policy into the future, in any material way, to other countries or institutions. In addition the ESM Treaty does not involve a permanent commitment to a set of policies which is so far reaching as to amount to an effective transference of sovereignty.

  680. In all those circumstances it did not seem to me that there was any basis for the suggestion that participation by Ireland in the ESM Treaty amounted to an abdication or diminution in sovereignty such as would be outside the competence of the Government to agree and Dáil Éireann (within its specific financial constitutional remit) to approve. For the reasons already set out, that conclusion is based solely on a consideration of Irish constitutional law and does not, therefore, determine any of the issues raised by Deputy Pringle as to the alleged incompatibility of either the ESM Treaty or the Council Decision with EU law.

  681. I now propose to turn to the reason why I supported this court's decision not to grant an interlocutory injunction in favour of Deputy Pringle.

  682. 9. The Injunction Claim

  683. A starting point on the considerations which apply to the grant or refusal of an injunction to restrain ratification of an international treaty requires a return to an aspect of the decision of this court in Crotty. Subsequent to the rejection of Mr. Crotty's claim in the High Court and the bringing of an appeal to this court, the question of the grant of an interlocutory injunction, to restrain ratification pending that appeal, arose. This court was persuaded that a fair issue to be tried had been made out by Mr. Crotty. In addition Finlay C.J., speaking for the court, said the following at p.763:–

  684. As to the second question, whether the balance of convenience justifies the granting of an interlocutory injunction, the balance of convenience in the context of the Constitution is exceptional and considerations different to those of the ordinary injunction apply. If the interlocutory injunction sought by the plaintiff were not granted, then the Government's act of ratification would deprive this Court of its jurisdiction or power to grant to the plaintiff the remedies necessary to protect his constitutional rights. If that submission is correct, a fair argument has been made out and it constitutes what, in my view, would justify making an exception, given a reluctance to interfere with the Executive. I am satisfied that in order to do justice to the parties the injunction should continue.

  685. It seemed to me that the key sentence from the passage cited is the one which notes that this court would be deprived, in the absence of an interlocutory injunction, of any power to grant the plaintiff the remedies necessary to protect his constitutional rights if he were to succeed. However, the circumstances which gave rise to that situation need to be examined. The SEA purported to amend the treaties of the then EEC. If the SEA was ratified by all of the then Member States then the treaties would be amended. It would not have been within the power or competence of the Supreme Court of Ireland to make an order which would require the reversal of those amendments. Thus, if Ireland had ratified the SEA pending the appeal in Crotty to this court (and all other states had also ratified), the issues raised by Mr. Crotty would, in effect, have become moot.

  686. It seemed to me that the situation with which this court was confronted in this appeal was entirely different. Pending a resolution by this court of the sovereignty claim there may, or may not, have been an argument available to Deputy Pringle along the same lines as that which prevailed at the interlocutory stage in Crotty. I express that view in a somewhat equivocal way because, unlike the situation that pertained in Crotty, the ESM Treaty is not a European Community or Union treaty which would have the effect of amending the underlying legal basis for a Community or Union of which Ireland was a member.

  687. However, be that as it may, the sovereignty issue has now been found against Deputy Pringle. The remaining issues of Irish constitutional law are the power transfer issue and the residual question of whether it might be a breach of the Irish Constitution for Ireland to ratify a treaty which was in breach of the EU treaties. The power transfer claim does not affect Ireland's entitlement to ratify the ESM but rather, if found to be valid, would affect the manner in which Ireland's obligations in respect of the ESM were to be operated on an internal basis. The residual constitutional claim is, itself, entirely dependant on the success of Deputy Pringle on the reference already made. It follows that the sort of situation with which this court was faced in Crotty, being that there would be no ultimate remedy available in the event of ratification, does not apply. If the power transfer claim succeeds then the Oireachtas will be constrained to enact a different, and constitutionally legitimate, form of legislation implementing the ESM Treaty. The residual Irish constitutional claim, and each of the claims based on European law, can only succeed if the Court of Justice so determines. However, if the Court of Justice does so determine then there is no reality to the ESM continuing as counsel for the State readily and properly conceded. Deputy Pringle has, therefore, a remedy in the shape of whatever determination the Court of Justice might make. The situation is, therefore, radically different from that with which this court was faced in Crotty. It also follows that the real question is as to whether Ireland should be restrained from ratification pending the resolution of the reference, the other issues having been either decided or not affecting the power to ratify.

  688. Insofar as Finlay C.J. suggested, in Crotty, that the considerations which determine where the balance of convenience lies, in relation to claims made in a constitutional context, may be different to those arising in private civil litigation, then it seems to me that that is but an expression of the fact that the sort of considerations which apply, in the public law field, to the grant of interlocutory relief, while based on the same underlying principles as those which apply in private law, being to minimise the risk of injustice, nonetheless may, in their practical application, be different to those which arise in private litigation.

  689. In that context it is appropriate to refer to the recent decision of this court in Okunade v Minister for Justice, Equality & Law Reform [2012] IEHC 49 for an analysis of the application of the balance of justice test in the public law field. Similar (although not necessarily identical) considerations apply in determining the proper course to adopt at an interlocutory stage in proceedings involving constitutional issues. In that context I should record my agreement with O'Donnell J. as to the significant weight to be attached in assessing the balance of justice to the fact that the decision-making power with which this case is concerned (i.e. the conduct of relations with other nations) is specifically conferred by the Constitution on the Government (Art.29.4.1).

  690. With those observations made, I now turn to a consideration of the proper test to be applied.

  691. There are, in my view, potential complications about the precise test to be applied by this court in considering an interlocutory injunction pending the resolution of issues referred to the Court of Justice such as those which are the subject of the reference in this case. Those issues are even more complicated, so far as the reference in respect of the ESM Treaty is concerned, by the fact that that treaty is not, of course, a Union measure at all.

  692. The question is as to whether the appropriate principles are those identified in the Irish jurisprudence in cases such as Campus Oil Limited v Minister for Industry and Energy (No.2) [1983] I.R. 88 (modified, perhaps, to reflect the public law and constitutional nature of the case) or those set out in the decisions of the Court of Justice in cases such as the joined cases of C-143/88 & C-92/89 Zuckerfabrik Süderdithmarschen AG v Hauptzollampt Itzehoe and Zuckerfabrik Soest GmbH v Hauptzollampt Paderborn [1991] ECR I-415, as well as C-465/93 Atlanta Fruchthandelsgesellschaft mbH v Bundesant für Ernährung and Forstwirtschaft [1995] ECR I-3761.

  693. The Campus Oil test is well settled. First the court must decide whether it has been shown by the relevant plaintiff that there is a fair issue to be tried. Thereafter the court may consider whether damages would be an adequate remedy although the relevance of such a consideration in the public law field may be doubted. Third, where damages would not be an adequate remedy, the balance of convenience must be considered. The relevant test in relation to the grant of interim measures where European Union law arises is to be found at para. 51 of the decision in Atlanta where the Court of Justice indicated that injunctive relief might be granted by a national court in relation to a national administrative measure adopted in implementation of a Union act only if:–

    1. The court entertains serious doubts as to the validity of the Union Act and, if the validity of the contested act is not already in issue before the Court of Justice, itself refers the question to the Court of Justice;

    2. There is urgency, in that the interim relief is necessary to avoid serious and irreparable damage being caused to the party seeking the relief;

    3. The court takes due account of the Union interest;

    4. In its assessment of all those conditions, it respects any decisions of the Court of Justice or of the now General Court of the European Union (formerly the Court of First Instance) ruling on the lawfulness of the regulation or on an application for interim measures seeking similar interim relief at Union level.

  694. There are, thus, some differences between the two tests. Under Campus Oil only a fair issue to be tried needs to be established. Under Atlanta the court must "entertain serious doubts" about the validity of the measure. It is at least arguable that the strength of the case needs to be established to a higher degree to meet the Atlanta test.

  695. In my view it may be necessary, in another case, to analyse with some care whether, and if so to what extent, there may be other substantial or material differences between those two tests. There is no doubt that, at a minimum, the tests laid down by the Court of Justice in the cases to which reference has been made require a national court, in considering whether to grant an interlocutory injunction, to have regard to the Union interest. However, it does not seem to me to be necessary, on the facts of this case, to engage in any such analysis.

  696. In my view, whether viewed as a matter of the domestic Irish jurisprudence or on the basis of the tests laid down in the jurisprudence of the Court of Justice, the balance in this case is overwhelmingly in favour of the refusal of an injunction. Deputy Pringle can only succeed in these proceedings in preventing the ESM from coming into or continuing in operation if he persuades the Court of Justice that it is not possible for Member States of the European Union, consistent with their obligations under the EU treaties, to participate in the ESM and, to the extent that the Council Decision might, on one view, be necessary to provide a legal basis for such participation, that the Council Decision is invalid. If Deputy Pringle succeeds in so persuading the Court of Justice then he will have his remedy. If he does not succeed then he will be found to have no interests to protect. To the extent that there might be any theoretical detriment in allowing ratification to go ahead in circumstances where participation in the ESM might be determined to be inconsistent with obligations found in the EU treaties, that detriment is significantly tempered by the fact that success for Deputy Pringle will require that all Member States respect the decision of the Court of Justice so that the ESM will be unable to continue, in the absence of further legitimate measures, and the Member States will need to put in place an appropriate regime for dealing with that situation which is consistent with the EU treaties. Thus the only detriment will, at most, be largely theoretical and certainly short term.

  697. On the other hand if Ireland were to be prevented, by injunction, from ratifying the Treaty at this stage but if the Court of Justice was ultimately to find that the ESM could proceed without any Member States being in contravention of their obligations under the EU treaties, then very significant detriment indeed would be caused at least to Ireland, which would be deprived of its ability to participate from the beginning in the ESM, and, possibly, to other Member States as well. The State has placed before the court, on this issue, cogent evidence from the affidavit of Mr. O'Brien of the Department of Finance, as to the serious risks to the national interest that such a course of action would involve.

  698. If Deputy Pringle succeeds before the Court of Justice then the ESM will fall for all Member States. If Deputy Pringle fails before the Court of Justice, but Ireland is excluded from participation pending the result of the reference, then significant detriment to the national interest is risked.

  699. This court did not, of course, enter into a discussion of the merits of Deputy Pringle's claim insofar as the relevant issues were referred to the Court of Justice. In order to conclude, in accordance with Atlanta, that the court "entertains significant doubts" about any relevant matters, then it might well have been necessary for the court to enter into such a consideration. In addition it would have been necessary to consider whether, and if so in what way, the Atlanta principles apply in the different circumstances which arise in this case where it is suggested that a Member State might be acting in breach of its obligations under the EU treaties by entering into a separate multi-lateral international treaty with other Member States. Atlanta was concerned with the effect on a private company of national measures designed to implement a Union act where it was argued that the Union act was invalid. However, whether viewed as an order required to avoid serious and irreparable damage (in accordance with Atlanta) or one required to meet the balance of convenience (as per Campus Oil) it seems to me that Deputy Pringle's claim for an interlocutory injunction fails.

  700. Irrespective, therefore, of the precise test to be applied, I was satisfied that the balance of justice overwhelmingly favoured the refusal of an injunction. In those circumstances I did not consider it necessary to form a view on the precise test to be applied for it did not seem to me that a determination on that question was decisive in this case.

  701. 10. Conclusions

  702. For those reasons I supported the court's ruling to the effect that ratification of the ESM Treaty did not involve an impermissible transfer of sovereignty and thus that the sovereignty claim should be dismissed. I was satisfied that ratification of the ESM Treaty would not abdicate, alienate or subordinate constitutional power conferred on the Government to another.

  703. I also agreed with the court's view that the issues referred to in the draft reference annexed to the court's ruling should be referred to the Court of Justice.

  704. For the reasons set out in section 9 of this judgment I supported the court's ruling which refused to grant an interlocutory injunction against ratification.

  705. Finally, I agreed with the court's decision to leave over all other issues arising on this appeal until the Court of Justice has ruled on the reference.


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