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Cite as: [2012] IEHC 296, [2013] 1 CMLR 16
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Judgment Title: Pringle -v- The Government of Ireland & Ors Neutral Citation: [2012] IEHC 296 High Court Record Number: 2012 3772P Date of Delivery: 17/07/2012 Court: High Court Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation Number: [2012] IEHC 296 THE HIGH COURT [2012 No. 3772P] BETWEEN THOMAS PRINGLE PLAINTIFF AND
THE GOVERNMENT OF IRELAND, IRELAND AND THE ATTORNEY GENERAL DEFENDANTS Judgment of Ms. Justice Laffoy delivered on 17th day of July, 2012. Section I – The plaintiff’s claims in the proceedings The proceedings 1. These proceedings were initiated by a plenary summons which issued on 13th April, 2012. While the plaintiff is a member of Dáil Éireann, on his case as pleaded, the capacity in which he brings these proceedings is as a natural person, a citizen of Ireland and a citizen of the European Union (the Union). In essence, in the proceedings the plaintiff challenges the validity under Union law and Bunreacht na hÉireann (the Constitution) of –
(b) a Treaty entered into by the seventeen euro area Member States of the Union. 2. Because of the importance of the issues raised in the proceedings, the hearing of the proceedings was expedited. It commenced on 19th June, 2012 and concluded on 29th June, 2012. While the proceedings have been pending, various events have occurred which are of relevance to the proceedings, for instance, the referendum referred to above and the enactment of three Acts of the Oireachtas. This judgment is based on the state of affairs as existed on 9th July, 2012, when I gave the decisions on which this judgment elaborates, and was inevitably going to exist when the hearing concluded. 3. Understandably, because of what has been happening in the background since the proceedings were initiated, and the expedition with which the procedural aspects of the matter have had to be completed, the position of the parties, and in particular that of the plaintiff, has changed during the proceedings. I propose initially identifying in chronological order the acts and instruments the validity of which the plaintiff impugns, either as to validity or as to incompatibility with Union law or the Constitution or both, and outlining the current bases of the plaintiff’s challenge, as well as the specific reliefs currently being sought in the proceedings. In so doing, I will explain how the plaintiff’s case has evolved. Decision 2011/199/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.”
(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).”
(b) 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,
7. The European Communities (Amendment) Act, 2012 (hereinafter referred to as the Amendment Act of 2012) was enacted after the hearing was concluded, but before this judgment was due to be given. These proceedings were initiated prior to the introduction of the Bill, which was so enacted. 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”:
(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 – (i) . . . (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, (iii) . . . (iv) . . .” 8. The initial reliefs sought in the statement of claim by the plaintiff based on the alleged invalidly of Decision 2011/199/EU with EU law and the Constitution are:
(b) an injunction restraining the first defendant, 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. 9. A written summary of the plaintiff’s claim was put before the Court on 27th June, 2012, in which counsel for the plaintiff helpfully outlined the plaintiff’s claims in their final form. I propose using the written summary as the basis for identifying the elements of the plaintiff’s claim, and the grounds therefor, which the Court has now to determine. The grounds set out in the written statement on which the plaintiff challenges the constitutionality of the Amendment Act of 2012 and the validity of Decision 2011/199/EU are summarised as follows:
(b) As will appear later, in summarising the grounds for his challenge to the constitutionality of the ESM Treaty, the plaintiff asserts that he has 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. (c) As regards Decision 2011/199/EU vis-à-vis Union law and the Constitution: (i) 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. (ii) 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)”. (iii) 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. (iv) 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. (v) 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 a challenge to the ESM Treaty. (vi) Its incompatibility with the EU Treaties ought to be referred to the Court of Justice of the European Union (CJEU) pursuant to Article 267 TFEU. (vii) The plaintiff 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 a procedural issue raised by the defendants. 10. On 2nd February, 2012 the seventeen Member States of the European Union which are euro area Member States entered into an intergovernmental agreement known as the Treaty establishing the European Stability Mechanism (the ESM Treaty), Article 1.1 whereof provides:
(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 related matters.” 12. The text of the ESM Treaty (including annexes) is set out in the schedule to the ESM Act of 2012. 13. At the hearing the Court was informed that the first defendant, the Government of Ireland, proposes to ratify the ESM Treaty on 9th July, 2012. The process of ratification thereof is governed by Article 47(1), which provides:
14. The reliefs initially sought in the statement of claim by the plaintiff based on his allegation of incompatibility of the ESM Treaty with the Constitution and the EU Treaties are:
(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. 15. In outlining in the written summary the grounds on which the plaintiff asserts the incompatibility of the ESM Treaty with Union law and the Constitution and the unconstitutionality of the ESM Act of 2012, the plaintiff has categorised his submissions under the following headings:
(b) the ESM Act of 2012 and the Constitution; and (c) the ESM Treaty and Union law.
(b) 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. (c) The ESM Treaty is incompatible with Union law and, consequently, constitutes a breach of Article 29.4 of the Constitution, given the status of Union 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] IR 713). (d) 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 plaintiff contends that any fundamental alteration of the substance of that vote and referendum equally requires the approval of the people. (e) The determination of the constitutional law issues raised at (b) and (c) above entail a prior interpretation of the Union Treaties and of Union 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. (f) The plaintiff has standing to institute the present proceedings concerning the constitutionality of the ESM Treaty and Decision 2011/199/EU and to raise questions of Union law arising in relation to the evaluation of constitutionality, the ratification of the ESM Treaty and the approval of Decision 2011/199/EU.
(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 Union 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 Union Treaties on the basis of the grounds set out at (a) to (e) in para. 16 above.
(b) 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 Union Treaties. This I understand 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.” (c) It is incompatible with the Union 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 Union legal framework, given that it is only envisaged to enter into force, at the earliest, on 1st January, 2013. (d) It entails a conferral of competences that alters and violates the competences conferred on the Union 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. (e) 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 Union Treaties. (f) It is incompatible with the respect for effective judicial protection enshrined in the Charter of Fundamental Rights of the European Union (the Charter) and the European Convention on Human Rights and recognised as “a General Principle” of Union law. (g) The combined and cumulative effect of the breaches of Union law that it entails (as particularised at (c) to (f) above), would constitute a fundamental alteration of the Union 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 Union framework and the Union legal order. (h) Article 4(3) TEU and the principle of sincere cooperation, prohibits Member States from entering into international agreements that are incompatible with the Union Treaties. Ireland is prohibited from acceding to the ESM Treaty under Union law. (i) The question as to whether Union law permits Ireland to accede to the ESM Treaty is a matter of Union law and ought to be the subject of a reference made to the CJEU pursuant to Article 267 TFEU. 19. The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (Fiscal Stability Treaty) was signed in Brussels on 2nd March, 2012 by twenty five Member States of the European Union, 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. 20. The people approved of the ratification by the State of the Fiscal Stability Treaty in the 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 (hereinafter referred to as “the Thirtieth Amendment of the Constitution Act”) was enacted on 27th June, 2012. Section 1 thereof provides that Article 29 of the Constitution is amended by the insertion after subsection 9° of section 4 of the following provision:
22. The Court was informed on 28th June, 2012 by counsel for the plaintiff that the plaintiff is not pursuing the relief claimed in paragraph 6 of the prayer in the statement of claim (Transcript, Day 6, page 86). 23. Nonetheless, the Fiscal Stability Treaty was drawn into the arguments in support of the plaintiff’s case, the plaintiff contending that the considerations which led the defendants to conclude that a referendum was necessary in relation to its ratification, apply a fortiori with respect to the ESM Treaty, submitting that the ESM Treaty also falls outside the Union legal framework and affects the sovereignty of the State, and therefore, the defendants have adopted an inconsistent approach to the two treaties. The defendants’ response was that no inconsistency exists. Further, 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 and there the plaintiff’s submission rests. In the circumstances, the Court cannot express any view on those submissions. Reference to CJEU
(b) The determination of certain of the constitutional aspects of the case is dependent on the interpretation of the Union Treaties and “General Principles of Union law”, as developed in the case law of the CJEU. (c) Questions of law ought to be referred to the CJEU for preliminary ruling pursuant to Article 267 TFEU. Interlocutory injunctive relief
(b) an order restraining the defendants from completing the procedures for the approval of Decision 2011/199/EU. Overview of defence
(i) Its proposed ratification by the Government on 9th July, 2012 is permissible. Applying the principles established by the Supreme Court in the Crotty decision, there is no incompatibility between the ESM Treaty and the provisions of the Constitution. (ii) The plaintiff is incorrect as a matter of law in his assertion that the alleged incompatibility between the ESM Treaty and existing Union Treaty provisions renders the ESM Treaty incompatible with the Constitution. (iii) There is, in any event, no incompatibility between the ESM Treaties and the existing Union Treaties. (iv) Decision 2011/199/EU is not required for Member States to ratify the ESM Treaty, but one of the consequences of its coming into force on 1st January, 2013 will be to put beyond doubt the compatibility of the ESM Treaty with Union Treaty provisions. (b) As regards the challenge to the validity of Decision 2011/199/EU, the position of the defendants is as follows: (i) Its approval by Ireland does not require a referendum. This is so because the power conferred on the European Council to adopt amendments to Part Three of the TFEU by way of decision pursuant to Article 48(6) of the TEU was inserted by the Treaty of Lisbon, the ratification of which was approved by the people in the Twenty-Eighth Amendment of the Constitution Act 2009. (ii) The plaintiff is precluded from challenging its validity by an absence of standing and/or by reason of delay. (iii) It was, in any event, validly adopted on the basis of Article 48(6) of the TEU. (c) As regards the plaintiff’s request that the Court refer certain questions to the CJEU, the position of the defendants is that, of the matters listed at (a) and (b) above, only the matters referred to at (a)(iii) and (b)(iii) could conceivably warrant a reference to the CJEU. It is contended that any reference in respect of point (b)(iii) will be overtaken by the coming into force of Decision 2011/199/EU and, in any event, none is required. No reference is required in relation to point (a)(iii), not least because of the lack of standing and delay. (d) In reality, the defendants did not resist the plaintiff’s application to amend the pleadings to include a claim that both the ESM Act of 2012 and the Amendment Act of 2012 are unconstitutional. Therefore, the plaintiff is given leave to amend the pleadings as sought. The defendants did, however, in their oral submissions deny that either Act is unconstitutional. 28. In broad terms, the defendants’ response to the plaintiff’s claim for interlocutory injunctive relief was that there are no circumstances in which the Court should grant the restraining orders sought against the defendants. It was submitted that the Court should determine the issues arising out of the challenge to the constitutionality of the Amendment Act of 2012 and the ESM Treaty Act of 2012. If the Court determines those issues in favour of the plaintiff, then it was submitted that the proper course is for the Court to grant the plaintiff permanent injunctions. However, if the Court dismisses the plaintiff’s claims, that is the end of the matter. It was further submitted on behalf of the defendants that, even if the Court concludes that a reference should be made to the CJEU, for the reasons which I will outline later, this is not an appropriate case in which to grant interlocutory injunctive relief of the type sought by the plaintiff. Evidence 30. I think it is important to emphasise that the Court is determining the issues in these proceedings without the benefit of any expert testimony as to the practical implications of what is proposed in the ESM Treaty for a participating Member State or, conversely, the practical implications of non-participation. The consequence is that it has to be inappropriate for the Court to accept some of the assertions made by counsel on behalf of the parties, even cum grano salis. Two examples will illustrate the point. Having emphasised the importance of price stability in the Union Treaties, counsel for the plaintiff asserted that the “putting of money into the system of States which are insolvent inevitably affects price stability. . . . You create inflation”. The context in which that argument was advanced was that the ESM Treaty is at odds with the principle of price stability (Transcript, Day 3, at pp. 75/76). The second example arose out of the defendants’ reply to the plaintiff’s contention that the ESM Treaty infringes Article 3(1) of the TFEU which provides that the Union shall have exclusive competence in, inter alia, the area of “monetary policy for Member States whose currency is the euro” (para (c)). The defendants’ reply was to embark on an exposition of what is meant by “monetary policy”, stating that it is part of a broader economic policy and deals with the setting and management of interest rates and money supply by policy-makers usually at a central bank. Counsel for the defendants properly recognised that the Court might take the view that what constitutes monetary policy in a particular context should be a matter for evidence (Transcript, Day 5, p. 82). I mention those two examples to illustrate that the Court could be inhibited by the lack of expert evidence, if its role is different to what I consider to be its role, as outlined later. Finally, on this point, it is worth observing that the basis of the decision of the Supreme Court in the Crotty case, that Title III of the Single European Act could oblige the Government in relation to foreign policy to make the national interests subservient to the interests of other Member States, obviously required no evidential elucidation. Structure of the remainder of the judgment
• In Section III, I will deal with the issues arising out of the plaintiff’s claims that the ESM Treaty is incompatible with Union law. • In Section IV, I will deal with the issues arising out of the plaintiff’s claims that the ESM Treaty is incompatible with the Constitution and that the ESM Act of 2012 is unconstitutional. • In Section V, I will deal with the issues arising out of the plaintiff’s claims that Decision 2011/199/EU is invalid and that the Amendment Act of 2012 is unconstitutional. • In Section VI, I will deal with the plaintiff’s request that questions be referred to the CJEU. • In Section VII, I will deal with the plaintiff’s application for interlocutory injunctive relief. • In Section VIII, the summary of the decisions of the Court given on 9th July, 2012, on which this judgment elaborates, will be set out. 32. It is a central element of the plaintiff’s case that the ESM Treaty is incompatible with Union law and, consequently, is contrary to Article 29.4 of the Constitution, and that it is incompatible with the Constitution. The defendants deny those claims. The plaintiff further contends that, before the Court can properly address the issue as to compatibility with the Constitution, the Court should refer questions in relation to whether the ESM Treaty is compatible with Union law to the CJEU pursuant to Article 267 TFEU. 33. The grounds on which the plaintiff alleges incompatibility of the ESM Treaty with Union law have been summarised above by reference to the plaintiff’s written summary. In fact, the plaintiff’s oral submissions went beyond that summary. Further, as I have stated, with the plaintiff’s written summary, counsel for the plaintiff furnished the Court with a draft of “proposed questions” to be referred to CJEU. Obviously, if the Court were to decide if there should be a reference, the form of the reference would be a matter for further submissions. However, purely for the purpose of fully understanding the plaintiff’s case, I think it is instructive to record the questions which the plaintiff envisages the Court referring to the CJEU in relation to both the ESM Treaty and Decision 2011/199/EU. First, by reference to specific Articles of the Treaties (Article 3(4) TEU, the provisions of Part Three, Title VIII TFEU, Article 3(1)(c) TFEU, Article 2(3) TFEU, Article 4(3) TEU and Article 47 of the Charter, the question posed by the plaintiff is whether –
- direct financial assistance; - recapitalisation of the financial institutions of a Member State whose currency is the euro; - a loan to a Member State whose currency is the euro; - an arrangement for the purchase of bonds of a Member State whose currency is the euro on the primary or secondary market, and where that financial assistance may be provided on the basis of strict conditionality, and where the actions of the institution are subject only to limited judicial control and review, which judicial control and review operates outside the Union legal order.”
Section II: Overview of provisions of ESM Treaty alleged to be incompatible with Union law and the Constitution General observations 36. Broadly speaking, my understanding of the plaintiff’s case is that the provisions of the ESM Treaty which are alleged to breach the provisions of the Union Treaties and to be incompatible with the Constitution are the Articles dealing with the purpose of the Treaty, governance, financing the ESM, the operations of the ESM, financial management, conferral of power and interpretation and dispute resolution. Establishment and purpose
Governance 39. The voting rules, while quite complex, are very precise. Article 4 provides that the decisions of the Board of Governors shall, as specified in the Treaty be taken by –
(b) qualified majority, that is to say, eighty per cent of the votes cast (Article 4(5)), or (c) simple majority, that is to say, a majority of the votes cast (Article 4(6)). 40. However, the voting rules are complicated by the fact that Article 4(4) permits a derogation from the mutual agreement requirement “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”. In such an emergency situation, the crucial decision in relation to the granting of financial assistance as provided for in Articles 13 to 18 may be made by the Board of Governors by a qualified majority of eighty five per cent of the votes cast. 41. The voting rights of each Member are equated with the number of shares allocated to it in the authorised capital stock of the ESM, as set out in Annex II. Ireland’s voting rights represent 1.5922% of the total voting rights. Counsel for the plaintiff produced an interesting analysis in tabular form of the number of States capable of forming a blocking majority on a qualified majority vote and the minimum number of States capable of passing resolutions by qualified majority vote. The analysis, with which the defendants do not disagree, illustrates that the five Members with the largest voting rights (Germany, France, Italy, Spain and the Netherlands) together are capable of passing resolutions by qualified majority and, those States coupled with Belgium, together would be capable of passing a resolution by the eighty five per cent qualified majority provided for in Article 4(4). 42. Finally, one of the provisions relied on by the plaintiff in support of his constitutional article is Article 4(8) which provides as follows:
Financing 44. Article 8 makes provision for authorised capital stock in the amount of €700 billion, both paid in and callable, of which, by virtue of Annex II, Ireland’s total subscription to authorised capital stock (both paid in and callable) is set at €11.1454 billion. It is provided that the initial total paid-in capital is €80 billion. The plaintiff raises a number of issues in relation to Article 8, which are pertinent to the issue of the compatibility of the ESM Treaty with the Constitution, the most significant of which are outlined here. First, under Article 8(4) ESM Members irrevocably and unconditionally undertake to provide their contribution to the authorised capital stock in accordance with Annex I. The plaintiff submits that a change in the circumstances of a Member does not permit it to abdicate that duty. The response of the defendants, which will be recorded in greater detail later, is that under international law, as codified in Article 56 of the Vienna Convention on the Law of Treaties (the Vienna Convention), a Member (for example, Ireland) would be permitted to denounce the ESM Treaty and negotiate its withdrawal therefrom. Secondly, the plaintiff points to Article 8(5), under which the obligation to contribute to the authorised capital stock is not affected if the Member becomes eligible for, or is receiving, financial assistance from the ESM, in other words, if the Member is in dire financial straits. The answer of the defendants is that Members may voluntarily make the choice as to whether or not to seek financial assistance. 45. Article 10(1) provides:
46. In relation to other provisions in relation to capital to which the plaintiff adverts and invokes in support of the alleged incompatibility with the Constitution argument, for example, the right of the Board of Governors to call in authorised unpaid capital (Article 9(1)) and the right of the Board of Governors to adjust the contribution liability of a Member State based on relevant percentage voting rights as stipulated in Annex I (referred to as the “Contribution Key”) in certain circumstances, such as the accession of a new Member to the ESM (Article 11), it is the case that decisions by mutual agreement are also required under Article 5(6). Operations
48. In answering the plaintiff’s arguments in relation to Article 12, the defendants put forward the following general propositions, which they have particularised in their submissions:
(b) conditionality must comply with policy already established by the Union, as is expressly stipulated in Article 13(3), which is quoted below, and on which the defendants, in my view, properly lay particular emphasis; (c) setting conditionality in accordance with Article 13(3) is not policy making or policy co-ordination or policy determination or policy implementation; (d) conditionality does not interfere with national sovereignty, emphasising the voluntary nature of participation in the ESM, which does not involve a transfer of sovereignty; (e) conditionality does not interfere with Union powers; (f) conditionality does not interfere with Union economic policy; and (g) conditionality does not interfere with Union monetary policy, which will be considered below in the context of the plaintiff’s contention that the authorisation of the giving of stability support through the instruments provided for in Articles 14 to 18 constitutes a violation of Article 127 TFEU. 50. Article 12(3) provides that collective action clauses (CACs) shall be included, as of 1 January, 2013, –
51. Article 13 deals with the procedure to be followed by a Member of the ESM in seeking stability support and the steps to be followed by the ESM in considering whether to accede to the request. 52. Article 13(3), reliance on which is at the core of the defendants’ defence of the plaintiff’s claim as to incompatibility of the ESM with Union law, provides:
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.” 53. Article 13(4) provides that the European Commission shall sign the MoU on behalf of the ESM. Counsel for the plaintiff pointed to the fact that it is the Commission, an institution of the Union, which signs the MoU on behalf of the ESM, as being noteworthy. The defendants’ position is that the Commission has competence to perform the role provided for in Article 13 pursuant to the mandate given to it in Article 17 TEU, which mandates it to “promote the general interest of the Union and take appropriate initiatives to that end”. Further, it is suggested that the Commission’s tasks pursuant to the ESM Treaty must be viewed in the light of the fact that the Commission is already integral to the Union system of economic and fiscal surveillance, reference being made to the five Regulations and one Directive proposed by the Commission in October 2011 and approved by all twenty seven Member States and by the European Parliament (the so-called “Six Pack”: Regulation (EU) 1173/2011; Regulation (EU) 1174/2011; Regulation (EU) 1175/2011; Regulation (EU) 1176/2011; Regulation (EU) 1177/2011; and Directive 2011/85/EU). The defendants point to the multiple functions performed by the Commission pursuant to those legislative measures, which the defendants suggest, are regarded as falling within the scope of Article 17 TEU, the emphasis being on the fact that no Treaty amendment was required to permit the Commission to carry out those functions. 54. The plaintiff’s claims as to the incompatibility of the power conferred on the ESM to grant stability support by means of the various financial assistance instruments provided for in Articles 14 to 18 is primarily a claim that such power is incompatible with identified provisions of the Union Treaties. It is convenient to consider the detail of those Articles and the submissions of the parties in relation thereto together with the Articles of the Union Treaties which it is contended they infringe, as will be done in Section III below. 55. Article 21 of the ESM Treaty deals with borrowing operations and provides that 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. The plaintiff’s position on this Article is probably more relevant to the constitutional argument than to the contention of incompatibility with the Union Treaties. The plaintiff’s contention is that there is no limitation on the power to borrow. The defendants dispute this and contend that there are clear and strict limitations on the borrowing powers of the ESM and that, by application of Article 3, which I have quoted earlier, its power to borrow is limited to the purpose stipulated in Article 3. Financial management 57. The plaintiff’s invocation of Article 25 of the ESM Treaty, which deals with coverage of losses, is related to the alleged incompatibility of the ESM Treaty with the Constitution. Article 25 provides for the manner in which losses arising in the ESM operations shall be charged: firstly against the reserve fund; secondly, against the paid-in capital; and lastly, against an appropriate amount of the authorised unpaid capital, which shall be called in in accordance with Article 9(3). As I understand the plaintiff’s position, he does not make any complaint about the schema for the distribution of liability for losses. His complaint is that it is not clear that there any limitations on the losses, that there is no statement that losses are limited to authorised share capital. Further, he asserts that ESM borrowing powers are not restricted in amount to the authorised or paid-in capital. In relation to Article 25(2), which the plaintiff also invokes and which addresses the situation where there is default by an ESM Member in relation to a capital call, by mandating the making of a revised increase capital call to all ESM Members with a view to ensuring that the ESM receives the total amount of paid-in capital needed, subject, however, to remediation as provided in Article 25(3), if the defaulter settles its debt, the position of the defendants is that there is no basis whatsoever for asserting that the losses could be unlimited. It is reiterated that Ireland’s total authorised capital contribution to the ESM, both paid in and callable, is capped at €11.1454 billion, that any increase would require the approval of Dáil Éireann, and would require amendment by the Oireachtas to the ESM Act of 2012. Other relevant provisions
Section III: Alleged incompatibility of ESM Treaty with Union law General approach 59. I propose addressing the plaintiff’s allegation of incompatibility between the provisions of Articles 14 to 18 and Article 19 of the ESM Treaty first. Notwithstanding some inevitable degree of repetition, I will then address the Articles of the TFEU and the Articles of the TEU with which the plaintiff contends the ESM Treaty is incompatible and I will then set out my conclusions, which will be informed by the matters set out in addressing the specific complaints made by the plaintiff in relation to the powers conferred on the ESM by Articles 14 to 18 and Article 19 of the ESM Treaty. Articles 14 to 18 and Article 19 of the ESM Treaty
(b) as regards the power conferred by Article 15 to “grant financial assistance through loans to an ESM Member for the specific purpose of recapitalising the financial institutions of that ESM Member”, that it violates Articles 123, 125 and 127; (c) as regards the power conferred by Article 16 to “grant financial assistance in the form of a loan to an ESM Member”, that it violates Articles 123, 125 and 127; (d) as regards the power conferred by Article 17 to “arrange for the purchase of bonds of an ESM Member on the primary market”, that it is expressly prohibited by Article 123 and constitutes the assumption of commitments prohibited by Article 125; and (e) as regards the power conferred by Article 18, to “arrange for operations on the secondary market in relation to the bonds of an ESM Member”, that it is prohibited by Articles 123, 125 and 127. 62. First, they state that each type of stability support authorised by Articles 14 to 18 inclusive is authorised to be granted by the ESM, not by the European Central Bank or central banks of the Member States. That distinction is unquestionably correct and it is of crucial significance. For example, Article 123 TFEU expressly prohibits overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of Member States in favour of, inter alia, central governments, but not with the ESM. 63. Secondly, while Article 125 TFEU provides that –
(b) a Member State shall not be liable for or assume the commitments of, inter alia, public undertakings of another Member State, 64. Thirdly, the defendants submit that the granting of stability support in any of the forms provided for does not interfere with monetary policy. The explanation of that proposition by counsel for the defendants harks back to the observations in relation to the paucity of evidence adduced by the parties in Section I above. In any event, as the defendants assert, monetary policy for the euro area is managed by the European Central Bank and the European system of central banks. Under Article 127(1) TFEU, the primary objective of the European system of central banks is to maintain price stability, but it is also required to support the general economic policies in the Union and is required to act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources. It is the defendants’ position that the activities of the ESM do not interfere with Union monetary policy, nor do they affect or interfere with the performance by the European system of central banks of the basic tasks which it is required to carry out in accordance with Article 127(2), which include defining and implementing the monetary policy of the Union. The rationale underlying that assertion is that the funding provided by the ESM seeks to fulfil the funding needs of ESM Members that can no longer access international capital markets at reasonable and sustainable interest rates. The funding is raised by the ESM on international funding markets and lent to the relevant ESM Member subject to strict conditionality. The defendants’ position is that the ESM will not alter the overall money supply in the euro area; rather, it will redistribute it within the euro area. 65. Fourthly, the defendants reject the plaintiff’s contention prompted by the references to Articles 107 and 108 TFEU in Article 15 of the ESM Treaty, that the granting of financial assistance to recapitalise financial institutions is a “radical departure from the normal rules” in relation to State aid, as set out in those Articles. The position of the defendants is that the MoU must have conditions which require compliance with competition law and that it will be the role of the Commission in preparing the MoU to ensure that this is achieved. 66. The plaintiff submits that the power conferred by Article 19 to review the list of financial assistance instruments provided for in Articles 14 to 18 inclusive and to decide to make changes to it violates Article 125 TFEU. The defendants reiterate that none of the financial instruments currently envisaged by the ESM Treaty involve liability or the assumption of commitments prohibited by Article 125. Further, the defendants submit that the plaintiff’s assertion that the exercise of the power contained in Article 19 may alter that situation is premature, hypothetical and unfounded. It is also pertinent to record that, by virtue of Article 5(6)(i) of the ESM Treaty, the exercise of the power contained in Article 19 requires mutual agreement. Article 2(3) TFEU
Article 3(1)(c) TFEU Part Three, Title VIII TFEU
(b) Chapter 2 (entitled “Monetary Policy”), being Articles 127 to 133 inclusive; and (c) Chapter 4 (entitled “Provisions specific to Member States whose currency is the euro”), which includes Article 136, the amendment of which is the subject of Decision 2011/199/EU. 70. Article 121(1) provides:
Article 122
Article 123 Article 125
Article 126 Article 127
76. The defendants’ primary response to the plaintiff’s allegation of incompatibility of the ESM Treaty with Article 127 is the same as their response to the allegation of incompatibility with Article 3(1)(c): that there is no determination or implementation of monetary policy pursuant to the ESM. In my view, an analysis of the purpose of the ESM and the contents of the provisions of the ESM Treaty, the objective of which is to achieve that purpose, supports the conclusion that the ESM has no competence in the area of monetary policy as regulated by the Treaties, which was the defendants’ primary answer to the plaintiff’s contention of incompatibility of the ESM Treaty with Article 3(1)(c), as outlined earlier. Additionally, the defendants contend that, by reason of the provisions of Article 13(3) of the ESM Treaty, there is no scope for conflict with Article 127. However, counsel for the plaintiff pointed to the fact that there is no reference to monetary policy in Article 13(3). Counsel for the defendants agreed that that is so, pointing out that monetary policy is not referred to, because funding, that is to say, provision of stability support, which is what the ESM Treaty is concerned with, is not part of monetary policy. Presumably, on the basis of that submission, the Court is not being invited to treat reliance on Article 13(3) as part of the defendants’ answer to the allegation of incompatibility of the ESM Treaty with either Article 3(1)(c) or Article 127. In any event, I am satisfied that the ESM Treaty is not concerned with the definition or implementation of monetary policy and does not encroach on the policy area governed by Article 3(1)(c), Article 119(2) or Article 127 of the TFEU. Therefore, I am satisfied that the provisions of the ESM Treaty are not incompatible with Article 127. Other submissions 78. In the context of their submissions in relation to Articles 122(2), 123 and 126, counsel for the plaintiff cite the decision of the Court of Justice in Commission v. Ireland [2006] ECR I – 4635. The premise on which they rely on that decision as authority for the proposition that the provisions of the ESM Treaty are incompatible with the provisions of the TFEU is that the power to give financial assistance is a Union competence conferred on the Council under the TFEU and that the ESM Treaty interferes with that Union competence in conferring an equivalent, overlapping and conflicting power to a autonomous international institution that operates outside the framework of the Union legal order. The issue in Commission v. Ireland was whether Ireland was permitted to initiate dispute-settlement proceedings against the United Kingdom under the United Nations Convention on the Law of the Sea concerning the MOX plant located at Sellafield. In its judgment, the Court stated (at para. 123):
79. While, in their written submissions, as in their oral submissions, counsel for the defendants’ refutation of the plaintiff’s allegation that the ESM Treaty encroaches on Union competence, particularly by reference to Articles 2(3) and 3(1)(c) TFEU, was the submission I have outlined earlier, namely, that the ESM Treaty is a funding agreement, which has nothing to do with coordinating economic policy or defining or implementing monetary policy, an alternative position adopted in their written submissions was that the plaintiff had overlooked that Article 2(1) TFEU, or more correctly the principles to be found therein, as interpreted by the Court of Justice in Case 22/70 Commission v. Council (AETR) [1971] ECR 263, would permit Member States to enter into the ESM Treaty. Article 2(1) TFEU provides:
80. Reliance by the defendants in their written submissions on the decision in the AETR case led to considerable significance being attached by counsel for the plaintiff in his replying submissions to one aspect of the judgment. The issue before the Court in that case arose out of a dispute between the Commission and the Council as to whether, at the relevant time, the negotiation and conclusion of the AETR, which was an international agreement in the sphere of transport policy between Member States and other European countries, could only be carried on by the Community, and not by the Member States, as had occurred. Counsel for the plaintiff referred the Court to, inter alia, paragraphs 13 to 21 of the judgment. Reference was made by the Court of Justice to the Article of the Treaty then in force, which provided that the adoption of a common policy in the sphere of transport was specially mentioned amongst the objectives of the Community, and also to the Article, which counsel for the plaintiff referred to as the predecessor of the present sincere cooperation provision (Article 4 TEU) and then stated (at para. 22):
Article 4(3) TEU
The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union. The Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives.” Conferral of new functions: The Commission/Article 17 TEU 83. It is part of the plaintiff’s case that the ESM Treaty confers “new functions” on, inter alia, the Commission in connection with the performance of tasks provided for under the ESM Treaty, which functions are not contemplated by the Union Treaties. The defendants refute that allegation by reference to Article 17 TEU which deals with the competence of the Union and provides that the Commission shall promote the general interest of the Union and take appropriate initiatives to that end. As has been noted earlier in Section II in giving an overview of Article 13 of the ESM Treaty, it is the defendants’ position that the Commission is already performing similar tasks to those envisaged for it in the ESM Treaty in accordance with the regulation introduced in the so-called “Six Pack”, for which there is a clear legal basis in the TFEU. The principal institutions of the Union in adopting, and in giving favourable opinions to the adoption of, Decision 2011/199/EU, as will be outlined later in Section V, clearly did not share the plaintiff’s view that the establishment of a permanent stability mechanism would confer functions on the Commission at variance with what is permitted under Article 17. In my view, the plaintiff’s allegation of an infringement of Article 17 is unfounded. Conferral of new functions: The European Central Bank Conferral of new functions: CJEU/Article 273
(b) Such a dispute would be a dispute “which relates to the subject matter of the Treaties”, given that the purpose of the ESM (as set out in Article 3) is to mobilise funding and provide stability support if indispensable to safeguard the financial stability of the euro area as a whole. Therefore, such dispute would relate to the subject matter of the Treaties. (c) Article 37 of the ESM Treaty constitutes a “special agreement” within the meaning of Article 273, on the basis that there is no impediment in that Article to establishing in advance of a dispute resolution mechanism that can be used in predetermined conditions, if and when a dispute arises. Article 47 of the Charter 87. Article 47, which is entitled “Right to an effective remedy and to a fair trial” provides that everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a Tribunal in compliance with the conditions laid down in Article 47. It further elaborates on how an effective remedy is to be afforded, namely: by a fair and public hearing within a reasonable time; by an independent, impartial tribunal previously established by law; and by affording everyone the possibility of being advised, defended and represented, and of having recourse to legal aid if he or she lacks sufficient resources insofar as such aid is necessary to ensure effective access to justice. 88. The defendants argue that the plaintiff does not have any standing to pursue the ground of challenge based on Article 47, as distinct from what is referred to as “Crotty” type standing, that is to say, standing to challenge the consistency of the ESM Treaty with the Constitution, to which I will refer later in Section IV. The defendants’ reasoning is that, in effect, in the terminology of Henchy J. in Cahill v. Sutton [1980] I.R. 269, he is relying on the putative rights of a hypothetical third party. Notwithstanding that stance, the defendants address the substantive issue and argue forcibly that there is no lacuna in the judicial protection created in the ESM, nonetheless, observing, in my view justifiably, that it is difficult to envisage circumstances in which the activities of the ESM, given their nature, could give rise to a violation of the fundamental rights and freedoms which are protected by Article 47. In particular, it seems to me inconceivable that financial institutions, or the shareholders of such institutions, with which the ESM may enter into financial arrangements would be relying on the ESM Treaty as the basis of a legal relationship with the ESM. Apart from that, the defendants argue that the role of the CJEU pursuant to Article 37 of the ESM Treaty in connection with “the interpretation and application” of the Treaty is sufficiently broadly worded to incorporate a review which takes cognisance of rights and freedoms protected by Article 47. They demonstrate that historically, and in the absence of reference to human rights in the EC Treaty, the CJEU nonetheless fashioned a sophisticated human rights jurisprudence, suggesting that it is simply not tenable that the CJEU would ignore that well developed jurisprudence on a referral to it of a dispute as to the “interpretation and application” of the ESM Treaty, simply because there is no express reference therein to human rights. 89. Whether or not the plaintiff does have locus standi to pursue the allegation that the ESM Treaty infringes Article 47 of the Charter, on which I do not consider it necessary to express a view, the assertion that the ESM Treaty does infringe Article 47 is, in my view, unsustainable. On the basis of the various arguments put forward by the defendants, I am satisfied that the plaintiff has not established that there is incompatibility between the ESM Treaty and Article 47. Summary of conclusions Section IV: The ESM Treaty and the Constitution General observations 91. Before addressing the areas of contention between the parties on the alleged incompatibility of the ESM Treaty with the Constitution, it is appropriate to note some areas of consensus which emerged from the submissions of the parties. 92. First, the defendants, properly in my view, do not contest the plaintiff’s submission that the ESM Treaty is not “necessitated” by the obligations of membership of the Union and do not rely on Article 29.4.6° of the Constitution as affording the ESM Treaty the force of law in the State. The defendants’ position is that the ESM Treaty is an international agreement and the State’s participation in it is voluntary. 93. Secondly, the defendants do not contest the plaintiff’s assertion, in reliance on the decision of the Supreme Court in Crotty, that he has locus standi to request the Court to consider whether ratification by the State of the ESM Treaty without the approval of the people in a referendum in accordance with Article 46 of the Constitution would be consistent with his constitutional rights, although that acknowledgement is made without prejudice to the defendants’ arguments on the plaintiff’s alleged lack of standing to challenge the incompatibility of the ESM Treaty with Article 47 of the Charter, which was addressed in Section III earlier. As will appear in Section IV, the defendants also dispute that the plaintiff has standing to challenge the validity of Decision 2011/199/EU in these proceedings, which will be considered in Section V below. It may also be observed that, in acknowledging the plaintiff’s locus standi, the defendants refer to the rights he enjoys “as citizen and Teachta Dála” under the Constitution. I did not understand the plaintiff to assert that his standing to challenge the constitutionality of the ESM Treaty or the ESM Act of 2012 was related to his membership of Dáil Éireann. I consider that his standing is based on the fact that he is a citizen of Ireland. 94. Thirdly, while the defendants do not dispute the plaintiff’s contention, also in reliance on the judgment of the Supreme Court in the Crotty case, “that in the conduct of the State’s external relations, as in the exercise of executive power in other respects, the Government is not immune from judicial control if it acts in a manner or for a purpose which is inconsistent with the Constitution” (per Henchy J. at p. 786), the defendants remind the Court of what, following an analysis of the Crotty decision, has been described by the High Court as “the wide discretion so accorded to [the Government] in foreign policy and conduct in international relations (per Kearns J., as he then was, in Horgan v. An Taoiseach [2003] 2 IR 468 at p. 512). 95. As the summary of the plaintiff’s grounds for contending that the ESM Treaty is incompatible with the Constitution as outlined in Section I above indicates, in essence, there are three limbs to the plaintiff’s constitutional argument. The first limb is that the ESM Treaty 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 pursuant to Article 46 of the Constitution to permit ratification of, and Ireland’s participation in, the ESM Treaty. This argument is based primarily on the decision of the Supreme Court in the Crotty case. The second limb is that the ESM Treaty, or more properly I would suggest, its implementation, entails the 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. While the defendants pointed to the fact that this ground was not pleaded, nonetheless they addressed it and I propose to consider it. As the ESM Act of 2012 has been enacted, the second limb has to be considered in the context of the plaintiff’s challenge to the constitutionality of that legislation on the grounds summarised in Section I above. The third limb, which the defendants also contend was not pleaded, but which they addressed and which I propose considering, is that the ESM Treaty is incompatible with Union law and that it is in fundamental contradiction to the Union Treaties and, consequently, the Constitution is breached and the approval of the people in a referendum is necessary to give effect to the necessary amendment of the Constitution. 96. In addressing the first limb of the constitutional argument, I propose outlining the provisions of the Constitution which were under scrutiny in the Crotty case, before consideration of that decision. Articles of the Constitution under scrutiny in the Crotty decision 98. Article 29.4.1° provides:
100. The aspect of the Crotty decision which is of relevance to the first limb of the plaintiff’s argument on the inconsistency of the ESM Treaty with the Constitution is the majority decision (in the judgments of Walsh J., Henchy J. and Hederman J.) of the Supreme Court declaring that the ratification of Title III of the Single European Act (SEA) would be unconstitutional. As the headnote in the report succinctly records, Title III of the SEA embodied a separate Treaty whereby each of the High Contracting Parties agreed to adopt 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. The provisions of Title III of the SEA were not inserted into the European Communities Act 1972 by virtue of the European Communities (Amendment) Act 1986, the constitutionality of which was upheld by the separate decision of the Supreme Court in the Crotty case. As is pointed out in the judgment of Walsh J., Title III was, in reality, a separate Treaty, although not so in form. The SEA provided that it would be ratified “by the High Contracting Parties in accordance with their respective constitutional requirements”. As Walsh J. pointed out in his judgment (at p. 777), in essence, the issue before the Supreme Court was whether or not, as a matter of Irish law, the method of ratification proposed by the Government was in accordance with the Constitution, namely, whether it could be ratified on the basis that its terms had been approved in their entirety by Dáil Éireann in accordance with Article 29, s. 5, sub-s. (2) of the Constitution. 101. In his judgment Walsh J. (at p. 780) summarised the effect of the Treaty in issue before the Supreme Court as follows:
103. Having considered Article 29.4.2°, Walsh J. stated that the framers of the Constitution in that provision had refrained from granting to the Government the power to bind the State by agreement with groups of nations “as to the manner or under what conditions” the executive function of the State conferred by that provision would be exercised. He identified where the line is drawn between what the Government can and cannot do in the following passage (at p. 783):
104. In his judgment, Henchy J., in considering the scope and objective of Title III, observed that it set the Member States on a course leading to an eventual European Union in the sphere of foreign policy. He continued (at p. 785) as follows:
107. Counsel for the defendants referred the Court to the following passage from the judgment of Walsh J. in the Crotty case (at p. 777):
108. In the sentence which succeeds the passage from the judgment of Walsh J. in the Crotty case which I have quoted in para. 103 above, Walsh J. stated, referring to freedom to form economic policy and freedom to legislate, that those freedoms had prior to 1987 been curtailed by the consent of the people to the amendment of the Constitution which is contained in Article 29.4.3°, which was the result of the third amendment of the Constitution approved of in 1972 to allow the State to become a member of the European Communities. It cannot be gainsaid that, as the defendants submit, such residual freedom in the field of monetary and economic policy as remained in the State in 1987 has been significantly curtailed by the Treaty on European Union (the Treaty of Maastricht) and the Treaties of Amsterdam, Nice and Lisbon, all of which were approved by the people in 1992, 1998, 2002 and 2009 respectively. 109. Against that background, I will consider the submissions of the parties on the first limb of the constitutional challenge to the ESM Treaty, insofar as they have not been already outlined and considered in the overview of the provisions of the ESM Treaty. Submissions on first limb of constitutional argument 111. The nub of the plaintiff’s arguments based on the decision in the Crotty case is that participation in the ESM Treaty involves a transfer of sovereignty to the ESM, because such participation impinges on and diminishes Ireland’s budgetary, economic and fiscal sovereignty, in that it entails an open-ended and irreversible transfer of powers to an autonomous institution that exposes 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. The plaintiff’s case is that this transfer of sovereignty is compounded by:
(b) the contended for power of the ESM to create and construct its structural and operational parameters in the course of its activities, as and when required, so that the financial commitment of a Member is unforeseeable, referring to the powers under Articles 8(2), 10, 11, 25, 4(4), 19, 20 and 44, the exercise of all of which, with the exception of those under Article 25 and the first paragraph of Article 4(4), it should be observed expressly requires mutual agreement, by virtue of Article 5(6); (c) that it entails the transfer of powers to an autonomous institution that operates outside the Irish constitutional and Union legal orders and is not subject to minimum requirements of scrutiny, review or due process, which contention has been addressed in consideration of Article 37 of the ESM Treaty in Section III above; and (d) that it constitutes a permanent transfer of powers to the ESM, without any procedure for withdrawal from the mechanism.
114. The defendants in their response stray into the theoretical and factual spheres, in that it is stated in the defendants’ written submission that participation in the ESM will permit the Government and future Governments to seek financial assistance, if required in future, from the ESM, whether because it cannot be obtained domestically or on the international financial markets, or because, having regard to the terms and conditions on offer, those on offer from the ESM are more attractive than those on the markets. That proposition is elaborated on in a footnote to the following effect:
115. In relation to the specific arguments which the plaintiff makes to illustrate that the participation of Ireland in it involves a transfer of sovereignty to the ESM, the defendants disagree with the plaintiff’s analysis of the provisions of the ESM Treaty and, in particular, as I have endeavoured to demonstrate in giving the overview of its provisions, the specific features which the plaintiff identifies as giving rise to a curtailment of the State’s sovereignty. As regards decision making within the ESM, the defendants’ position is that all decisions of significance must be made by the Board of Governors unanimously. The State’s current liability to subscribe to capital stock is fixed and has been approved by the Oireachtas in the ESM Act of 2012. A decision to change authorised stock would require not merely a unanimous decision of the Board of Governors, but also approval of Dáil Éireann and an amendment of the ESM Act of 2012. A decision to provide financial assistance and the nature of the assistance to be provided must be made by the Board of Governors unanimously. The strict conditionality to which the provision of financial assistance must be subject must, by virtue of Article 13(3), be consistent with the measures of economic policy coordination provided for in the TFEU. That means, the defendants submit, that the ESM in determining the conditionality to which financial assistance is to be subject, cannot set new policies inconsistent with Union law or with the Constitution. 116. The defendants dispute the plaintiff’s contention that Ireland’s participation in the ESM involves a permanent commitment, in the sense that there is no means of exiting or withdrawing from the ESM. As was acknowledged by the defendants, there is, in fact, no provision in the ESM which deals with the withdrawal of a Member. Notwithstanding that, counsel for the defendants submitted that a Member may withdraw from the ESM under international law via the following exit route. First, Article 15 TEU provides that any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements. Secondly, Article 56 of the Vienna Convention provides:
(a) it is established that the parties intended to admit the possibility of denunciation or withdrawal; or (b) a right of denunciation or withdrawal may be implied by the nature of the treaty.”
Conclusions on first limb of constitutional argument 118. Subject to the foregoing, there are no other express restraints on the exercise of the power of the Government in relation to entering into international agreements in the Constitution. However, on the authority of the Supreme Court in the Crotty case, 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 and, in particular, in relation to entering into treaties with other nations. It cannot enter into an international agreement with other nations which, in the words of Walsh J., will qualify, curtail or inhibit the existing sovereign power of the State. What was at issue in the Crotty case was sovereignty in the conduct of external relations. In principle, and on the authority of the decision in the Crotty case, there is similar constitutional restraint in relation to other areas, such as economic and monetary policy, save, however, to the extent that the Constitution has been amended to permit curtailment in that area, for example, by the amendments which permitted participation in the Union Treaties, and that the curtailment of freedom in that area is in accordance with those amendments. 119. In my view, the defendants were correct in submitting that it is the power to formulate and implement policy which the Constitution restrains the Government from abdicating or relinquishing in part. That is to be deduced not only from the judgment of Walsh J. in the Crotty case, but also from the judgment of Henchy J. Accordingly, it seems to me that the core question on this aspect of the plaintiff’s claim, is whether the consequence of the ratification of the ESM Treaty will be that the State’s residual freedom to formulate and implement policy in relation to economic and monetary matters will be diminished. I consider that the answer to that question is to be found in the basic features of the ESM Treaty and the basic functions of the ESM, rather than in the detail. 120. In the ESM Treaty the seventeen Member States in the euro area joined together to establish a body, the ESM, with a separate and distinct legal personality. The ESM, in essence, has two inter-related and, indeed, inter-dependent functions:
(b) to provide stability support to a Member who is in severe financial difficulty, in other words, to bail out the Member, but that function is wholly conditional on the exercise of the function being indispensable to safeguard the financial stability of the euro area as a whole and its Member States. 122. In relation to the second basic function, the provision of financial assistance, Ireland’s participation in the ESM will render it eligible to request financial assistance in accordance with Article 13. However, there is no compulsion on the State to avail of that option. If the State were to decide voluntarily to avail of the option, and if the terms of conditionality to be imposed in the MoU would involve a diminution of the State’s existing residual sovereignty in the area of economic and monetary policy, the State would be free, and the Government, as a matter of complying with its constitutional obligations, would be required, to forgo availing of such financial assistance on those terms. 123. Accordingly, when one considers the substance of the ESM Treaty, Ireland’s participation in it neither impinges on nor diminishes its budgetary, economic or fiscal sovereignty as contended by the plaintiff. While it undoubtedly commits Ireland to financial liability, the constitutional requirement of approval of Dáil Éireann has been obtained as to its current liability and any increase in financial liability to the ESM to which the Government consents in the future cannot bind the State without the approval of Dáil Éireann and, indeed, of the Oireachtas in amending the ESM Act of 2012. It may be that discharging that financial liability will have budgetary implications which will require an adjustment of budgetary policy. However, those possible implications have advance approval of the Oireachtas under the ESM Act of 2012. 124. I consider that the provisions of the ESM Treaty are not open-ended. The agreement which the seventeen Member States of the euro area signed up to on 2nd February, 2012 sets out the rights and obligations of each signatory with clarity and precision. Neither Ireland nor any other Member State assumes limitless financial liability thereunder. The risk inherent in conducting a detailed analysis of the provisions of the ESM Treaty, which the plaintiff has done and the defendants have answered, is that one could easily lose sight of what the Court’s function is. It is the very limited function outlined earlier. The Court has absolutely no role in commenting as to whether participation is a good or bad strategy for Ireland. For that reason, the Court must attach no weight to the views of the Government as expressed in the quotation from the defendants’ written submissions set out earlier. Subject to what I will say below on the question of capacity to withdraw from the ESM Treaty, in general, I have found the defendants’ responses to the plaintiff’s specific grounds of alleged incompatibility with the Constitution to be wholly persuasive. However, for completeness I make the following comments. 125. On my reading of the ESM Treaty, the only circumstance in which mutual agreement is not required for a significant decision is the emergency situation provided for in Article 4(4). Where the emergency voting procedure is invoked, there is no doubt that a decision affecting Ireland could be made without the consent of Ireland. However, the decision relates to the granting of financial assistance in circumstances where both the Commission and the ECB conclude that a failure to urgently adopt a decision would threaten the economic and financial sustainability of the euro area. Obviously, there is need for flexibility in addressing financial crises. I cannot see how agreeing to the provisions of Article 4(4) on the part of the Government could on any common sense basis be regarded as a diminution of sovereignty, when the objective is to safeguard the euro area. 126. As regards the exclusion of a Member who is in default from exercising voting rights for so long as it is in default as provided for in Article 4(8), even allowing for the fact that the default may be attributable to inability, rather than unwillingness, to meet its obligations, I cannot see how, as a matter of commonsense, such a pre-determined sanction for default, which in participating in the ESM Treaty Ireland has agreed to, could be regarded as a fundamental transfer of sovereignty in the sense envisaged in the judgment in the Crotty case. Looking at the situation from the perspective of a non-defaulting Member, it is true that Article 25(2) has consequences, in that a revised increased capital call will be made with a view to ensuring that the ESM receives the total amount of paid-in capital needed. However, in my view, the defendants’ submission to the effect that the power conferred by Article 25(2) is subject to the cap on Ireland’s obligation to subscribe to the authorised capital stock, which is €11.1454 billion, is correct. Any increase in that liability would require unanimity (Article 10(1) and Article 5(6)(d)) and also the approval of Dáil Éireann and the amendment of the ESM Act of 2012. 127. Because of the provisions of Article 13(3) and, in particular, the requirement that the MoU shall be fully consistent with the measures of economic policy coordination provided for in the TFEU, there cannot be an incompatibility between the conditionality imposed on the grant of financial assistance to a Member and the TFEU. As Ireland is bound under both Union law and national law to the provisions of the TFEU in consequence of amendment of the Constitution, there can be no incompatibility with the Constitution. 128. The question of the entitlement of a Member to withdraw from the ESM, in the absence of an express provision in the ESM Treaty permitting withdrawal and, insofar as it might arise, the resolution of a dispute between the Member seeking to withdraw and the other participating Members, would be a matter for the final decision of the CJEU in accordance with Article 37 to be determined in accordance with Union law. That being the case, I do not think it is appropriate for this Court to express a view on the submission made on behalf of the defendants as to how withdrawal could be achieved. Having said that, I am of the view that, even in the absence of an express mechanism for withdrawal, the participation of the State in the ESM Treaty, given that its consent is necessary in all cases (with the exception of the application of Article 4(4)) where significant decisions must be made, cannot be regarded as a diminution of sovereignty. Second limb of the plaintiff’s constitutional argument/challenge to the constitutionality of the ESM Act of 2012 130. In relation to the plaintiff’s claim as originally formulated, the position of the defendants is that it was misconceived, in that the Minister for Finance will remain accountable to Dáil Éireann in respect of decisions taken within the ESM in respect of financial assistance provided using, in part, public funds that Dáil Éireann has approved for contribution to the ESM and, further, that no additional funding can be committed without further approval of Dáil Éireann by virtue of Article 29.5.2° of the Constitution. The defendants recognise that legislation approving an agreement to commit capital to the ESM could be subject to constitutional challenge. That is what has happened. Therefore, the second limb of the plaintiff’s constitutional argument falls to be considered by reference to the plaintiff’s claim that the ESM Act of 2012 is unconstitutional. 131. Apart from the plaintiff’s contention that the ESM Act of 2012 in its entirety is unlawful by reason of the fact that it seeks to ratify the ESM Treaty, which it is alleged is in breach of the Constitution and of the Union Treaties, the plaintiff’s challenge focuses entirely on s. 2, which, it is contended will confer an impermissible degree of financial and budgetary power on the Minister for Finance contrary to Articles 5, 6 and 17 of the Constitution. As is disclosed in the outline of its provisions in Section I above, the text of the ESM Treaty is set out in the schedule to the Act. 132. Section 2 of the ESM Act of 2012 provides as follows:
133. Moreover, it is unequivocally acknowledged by the defendants that the limit on payments by the State to the ESM stipulated in s. 3 cannot be exceeded without the approval of Dáil Éireann, and without a legislative amendment. 134. It was submitted by the defendants that, before voting in his capacity as a Governor of the ESM on a decision which would involve an increase in the State’s commitment to make payments to the ESM, the Minister should have the approval of the Dáil, because such approval is necessary to make the State liable for the extra charge on public funds and exceeding the limit stipulated in s. 3 would necessarily involve a legislative change. That would certainly be the prudent course for the Minister to adopt. However, in any event, by virtue of Article 10(1) of the ESM Treaty, a decision of the Board of Governors to change authorised capital stock will only enter into force after the ESM Members have notified the Depositary of “the completion of their applicable national procedures”. Accordingly, there is no possibility that the State could be bound to pay more than €11.1454 billion into the ESM without the approval of the Dáil Éireann and the sanction of the Oireachtas by an amendment to s. 3. Conclusion on the constitutionality of the ESM Act of 2012 136. For the reasons outlined in the preceding paragraphs, I have come to the conclusion that the ESM Act of 2012 is not invalid having regard to the provisions of the Constitution. Third limb of the plaintiff’s constitutional argument
139. Having regard to the conclusion I have reached that the ESM Treaty is not incompatible with the various provisions of the TEU and the TFEU which have been considered earlier, that debate is for another case and another day. The participation by Ireland in the ESM Treaty does not render it in conflict with its obligations under the Union Treaties and under Union law. Therefore, I conclude that Article 29.4.4° does not preclude Ireland from participating in the ESM Treaty. Summary of conclusions
(b) a declaration that any process of ratification of the ESM Treaty requires the approval of the people in a referendum, (c) a permanent injunction restraining the ratification of the ESM Treaty absent a referendum, and (d) a declaration that the ESM Act of 2012 is unconstitutional, are all refused. Section V: Alleged invalidity of Decision 2011/199/EU and unconstitutionality of Amendment Act of 2012 The function of the Court and the issues 141. The adoption by the European Council of Decision 2011/199/EU on 25th March, 2011 was the first occasion on which the simplified revision procedure provided for in Article 48(6) TEU, which was introduced in the Lisbon Treaty, was utilised to amend the Treaties in accordance with Article 48(1). At this point in time there is no jurisprudence of the CJEU on the application of Article 48(6) to guide this Court. However, an issue in relation to the “ratification” by Ireland of the proposed amendment of Article 136 TFEU arose in an application for judicial review, which came before the High Court (Hogan J.) on 29th May, 2012, that is to say, two days before the referendum on the Fiscal Stability Treaty. The judgment of Hogan J. in Doherty v. The Referendum Commission [2012] IEHC 211 was given on 6th June, 2012. The context was an allegation by the applicant that the Referendum Commission had acted ultra vires its powers in making two statements, one being a statement by the Chairman of the Referendum Commission made at a press conference on 3rd May, 2012, and the other being a statement placed on the website of the Referendum Commission on 18th May, 2012, which was entitled “Proposed amendment of Article 136 of the [TFEU]”. 142. As the written summary of the plaintiff’s claims outlined in Section I above discloses, the plaintiff’s attack on the State’s reliance on the amendment of Article 136 TFEU is two-pronged. First, the plaintiff challenges the validity of the decision adopted on 25th March, 2011 under Union law. Secondly, solely on the basis of its alleged invalidity under Union law, he alleges that it also infringes the Constitution and he also challenges the constitutionality of the Amendment Act of 2012 and also its efficacy to give Decision 2011/199/EU force of law in Irish law, contending that the Act, being contrary to the terms of the Union Treaties is, consequently, contrary to the terms of Article 29.4 of the Constitution, echoing the arguments made in relation to the ESM Act of 2012 dealt with in Section IV above. Whether that contention is correct or not, is a matter of Irish law. 143. Before considering the features of Decision 2011/199/EU, it is appropriate to consider what function a national court has in reviewing a decision adopted by an institution of the European Union. That question was determined by the CJEU in Case 314/85 Foto-Frost v. Hauptzollamt Lübeck-Ost [1987] ECR 4199. There the CJEU was considering a question referred by a German court as to whether the German court itself was competent to declare invalid a Commission decision made pursuant to Article 6 of Commission Regulation EEC No. 1573/80 that post-clearance recovery of import duty could not be waived, on foot of which the Hauptzollamt (the principal Customs Office) issued a notice to Fofo-Frost (the importer) for post-clearance of duty, which was contested by Foto-Frost in the main proceedings. The matter was before the Court of Justice on a reference by the German court under Article 177 of the EEC Treaty, being the jurisdiction now conferred by Article 267 TFEU. The Court of Justice answered the question in paragraphs 12 to 15 of its judgment as follows:
In enabling national courts, against those decisions where there is a judicial remedy under national law, to refer to the Court for a preliminary ruling questions on interpretation or validity, Article 177 did not settle the question whether those courts themselves may declare that acts of Community institutions are invalid. Those courts may consider the validity of a Community act and, if they consider that the grounds put forward before them by the parties in support of invalidity are unfounded, they may reject them, concluding that the measure is completely valid. By taking that action they are not calling into question the existence of the Community measure. On the other hand, those courts do not have the power to declare acts of the Community institutions invalid. As the Court emphasized in the judgment of 13 May 1981 in Case 68/80 . . ., the main purpose of the powers accorded to the Court by Article 177 is to ensure that Community law is applied uniformly by national courts. That requirement of uniformity is particularly imperative when the validity of a Community act is in question. . . .” 144. As the summary of the defendants’ defence of the plaintiff’s challenge to Decision 2011/199/EU outlined in Section I above discloses, it is the defendants’ case that the plaintiff is precluded from challenging the validity of that decision by reason of lack of standing and/or by reason of delay. However, if the challenge is admissible, it is the defendants’ case that it must fail because the decision was validly adopted on the basis of Article 48(6) TEU. The assertion that the plaintiff lacks standing is based entirely on Union law, whereas the assertion that the plaintiff is precluded by delay is based on both Union law and Irish law. Finally, the defendants submit that approval of the decision by Ireland does not require a referendum. 145. On the basis of the foregoing, in particular, the decision in the Foto-Frost case, in my view, the issues (and the order in which they should be considered) which arise on the plaintiff’s challenge to the validity of Decision 2011/199/EU and the measures necessary for its application in Irish law and the constitutionality of the Amendment Act of 2012 are as follows:
(b) If the answer to question (a) is negative, whether is it open to the plaintiff to request the Court to refer the matter to the CJEU for a preliminary ruling in accordance with Article 267 TFEU, or, alternatively, whether the plaintiff is precluded from so requesting by reason of – (i) lack of standing, or (ii) delay. (c) Given that, if the answer to (a) is positive, the sole basis of the constitutional challenge falls away, what measures are necessary under Irish law for the approval of Decision 2011/199/EU by Ireland and its implementation into Irish law and, in particular, whether a referendum is necessary under Article 46 of the Constitution? (d) Whether the plaintiff has established that the Amendment Act of 2012 is unconstitutional or ineffective to give Decision 2011/199/EU force of law in Irish law. 146. The first step in addressing issue (a) is to analyse the adoption and content of Decision 2011/199/EU against the requirements of Article 48(6) TEU. Issue (a): Analysis of Decision 2011/199/EU in the context of Article 48(6) TFEU
(b) The proposal must be for revising all or part of the provisions of Part Three of the TFEU. The proposal of the Belgian Government was for the revision of Article 136, which comes within Part Three. (c) The adoption of a decision amending all or part of the provisions of Part Three must be a decision of the European Council, which must act by unanimity. The decision at issue here is a decision of the European Council and it was adopted by unanimity on 25th March, 2011 by the Heads of State or Government of all the Member States, including Ireland. (d) Prior to adopting the decision, the European Council must consult with the European Parliament and the Commission, and, in the case of institutional changes in the monetary area, with the European Central Bank. As is recited in Decision 2011/199/EU, on 16th December, 2010 the European Council decided, in compliance with the requirement of Article 48(6), to consult with the European Parliament and the Commission, and it also decided to consult with the European Central Bank. Each of those institutions “adopted opinions on the proposal”. (e) It is mandated that the decision adopted by the European Council “shall not increase the competences conferred on the Union in the Treaties”. It was clearly the view of the European Council that the decision to amend does not increase the competences conferred on the Union in the Treaties, because this proposition is recited in Recital (6) in the decision. 149. In line with the requirements stipulated in Article 48(6), Decision 2011/199/EU provides as follows:
(b) Member States shall notify the Secretary-General of the Council without delay of the completion of the procedures for the approval of the decision “in accordance with their respective constitutional requirements” (Article 2). (c) The decision shall enter into force on 1 January, 2013 or on the first day of the month following receipt of the last of the notifications referred to at (b) (Article 2). 151. The amendment of TFEU consequent on the entering into force of Decision 2011/199/EU will only apply to the Member States whose currency is the euro. The amendment will provide that those Member States “may” establish a stability mechanism subject to two conditions:
(b) that the granting of any required financial assistance thereunder will be made subject to strict conditionality. Grounds of the plaintiff’s challenge to the validity of Decision 2011/199/EU
(b) the amendment which will enter into force in consequence of the decision is “vague and open-ended” and breaches the Treaties, in particular, by enabling the granting of financial assistance without limitations or restrictions, such as are provided for in the Union Treaties. Opinion of European Parliament
155. On 15th February, 2011 the Commission delivered a “favourable opinion” addressed to the European Council on the draft European Council Decision amending Article 136 TFEU with regard to a stability mechanism for Member States whose currency is the euro. The view of the Commission as to the impact of the proposed amendment by the addition of paragraph (3) to Article 136 TFEU is set out in Recital (6) in the following terms:
156. In considering the draft decision in the light of the conditions on the use of the simplified revision procedure, in particular, the prohibition on a decision thereunder increasing the competences of the Union, the Commission stated, inter alia, in Recitals (11) and (12):
Nor does the draft decision reduce the competences conferred on the Union. In particular, it does not affect either the specific solidarity mechanisms provided for in Articles 122 and 143 of the TFEU in the event that a Member State is in difficulties or is seriously threatened with difficulties or the Union’s competences in terms of coordination and surveillance of the economic and financial policies of the Member States in general and of Member States whose currency is the euro in particular.”
Opinion of European Central Bank
Response of the defendants to the plaintiff’s challenge to the validity of Decision 2011/199/EU
161. The defendants refute the plaintiff’s contention that the amendment of Article 136 involves an increase in the competences of the Union or that, in the context of Irish constitutional law, it could be construed as altering the essential scope or objectives of the Union. The defendants characterise the amendment as a technical amendment designed to confirm that Member States who have adopted the euro as their currency may establish between themselves an intergovernmental mechanism for the purpose of facilitating the safeguarding of the stability of the euro area. Leaving aside the possible ambiguity as to what the defendants mean by “confirm” in that context, that is to say, that it is not enabling, that position reflects the view of the institution of the Union which has jurisdiction to implement (the European Council), and of the institutions which must be consulted in relation to the exercise of such jurisdiction (the European Parliament, the Commission and the European Central Bank), the simplified revision procedure provided for in Article 48(6). The defendants’ position is that the amendment, in fact, has nothing to do with the Union or its competences; rather, it merely serves to confirm a competence that the Member States retain. 162. There is an element of crossover between the grounds advanced on behalf of the plaintiff for his contention that Decision 2011/199/EU is invalid and the arguments advanced to support the contention that the provisions of the ESM Treaty are incompatible with the Union Treaties, which has already been addressed. It is sufficient at this stage to note that, in answering the plaintiff’s assertions in relation to the amendment of Article 136, counsel for the defendants repeatedly emphasised the defendants’ stance that the provisions of the ESM Treaty are not incompatible with the Union Treaties. As to the contention of the plaintiff that the amendment envisaged in Decision 2011/199/EU is “vague and open-ended” and will permit financial assistance to be provided by Member States to other Member States without the limitations or restrictions such as are provided for in the Union Treaties, counsel for the defendants reiterated that the objective of the amendment is clear and that it does expressly restrict the granting of any required financial assistance under the ESM by stipulating that such financial assistance will only be made “subject to strict conditionality”. Having rejected the plaintiff’s claim that the ESM Treaty is incompatible with the Union Treaties, it follows that I consider that the defendants’ submissions recorded in this paragraph to be correct. Issue (a): Conclusion on challenge to validity of Decision 2011/199/EU Issue (b): Whether the plaintiff has standing to seek a reference for a preliminary ruling 165. The starting point of the defendants’ argument on issue (b) is Article 263 TFEU, which deals with the jurisdiction of the CJEU to review the legality of acts of institutions of the Union. The first paragraph of Article 263 provides:
166. There is a time limit provided for in the last paragraph of Article 263 for the institution of such proceedings. They are required to be instituted –
168. The chronology in the TWD case was that TWD, a manufacturer of polyamide and polyester yarn, in the years from 1981 to 1983 received aid, including a subsidy, from the Federal Republic of Germany. In 1986, the Commission adopted Decision 86/509, which was addressed to the Federal Republic of Germany, wherein the Commission declared that the aid granted to a producer of polyamide and polyester yarn situated at Deggendorf, which was in fact TWD, had been granted in contravention of Article 93 of the EEC Treaty and was consequently unlawful. The Commission requested the Federal Republic of Germany to recover the aid. On 1st September, 1986 a copy of Decision 86/509 was forwarded to TWD for information by the Federal Minister for Economic Affairs and, significantly, it was pointed out that TWD could bring an action against that decision under Article 173. Neither the Federal Republic of Germany nor TWD challenged the decision before the Court of Justice. In March 1987 the Federal Minister for Economic Affairs made a decision which initiated the process for recovery of the aid. In April 1987 TWD appealed against that decision to the Court of First Instance in Cologne, which dismissed the application in December 1989. TWD appealed against that judgment to an appeal court, which sought a preliminary ruling from the Court of Justice. The question referred which is of relevance for present purposes was:
169. Having recorded that it was settled law that a decision which had not been challenged by the addressee within the time limit laid down in Article 173 of the Treaty became definitive as against him, and that it was settled law that a Member State might no longer call in question the validity of a decision addressed to it on the basis of Article 93(2) of the Treaty once the time limit laid down in Article 173 had expired, and having cited the relevant authorities, the Court of Justice stated as follows (at paras. 16 and 17):
It follows from the same requirements of legal certainty that it is not possible for a recipient of aid, forming the subject-matter of a Commission decision adopted on the basis of Article 93 of the Treaty, who could have challenged that decision and who allowed the mandatory time-limit laid down in this regard by the third paragraph of Article 173 of the Treaty to expire, to call in question the lawfulness of that decision before the national courts in an action brought against the measures taken by the national authorities for implementing that decision.” 171. I do not propose to consider in detail the case law to which the defendants resorted in order to show that the plaintiff had a “direct and individual concern”. I propose merely to outline the defendants’ submissions. 172. As regards “direct” concern, on the basis of the contention that Member States have no discretion as regards their Union law obligation to approve Decision 2011/199/EU, it was contended that, once it comes into effect, it can be regarded as being of “direct” concern to the plaintiff in accordance with the jurisprudence of the CJEU. That reasoning creates obvious difficulty, because the underlying proposition is that the plaintiff should have initiated a direct challenge to Decision 2011/199/EU before the entry into force of that decision, which will not happen until 1st January, 2013 at the earliest. 173. As regards “individual” concern, counsel for the defendants outlined the various bases on which individual concern has been identified in the case law of the CJEU (the differentiating attributes factor identified in Case 25/62 Plaumann v. Commission [1963] ECR 95; the closed category factor applied in Cases 106 and 107/63 Toepfer v. Commission [1965] ECR 405; and the special protection factor applied, inter alia, in Case 11/82 Piraiki – Patraiki v. Commission [1985] ECR 207). The factual basis on which it was contended by the defendants that the plaintiff’s situation meets each of those tests, in my view, is extremely contrived, far fetched, and unreal and is wholly unsustainable. 174. It is true that the primary basis on which the plaintiff challenges the validity of Decision 2011/199/EU is that the ordinary provision procedure provided for in Article 48(2) – (5) should have been utilised and not the simplified provision procedure under Article 48(6). If the ordinary revision procedure had been adopted there would have been a requirement to notify, inter alia, the national Parliaments of the Member States of the proposals for the amendment of the Treaties. A Convention composed of, inter alia, representatives of the national Parliaments might have been convened to examine the proposals and to make a recommendation to a conference of representatives of the governments of the Member States. The utilisation of the simple revision procedure did not require any involvement of the national Parliaments and, therefore, it deprived the plaintiff, who is a member of Dáil Éireann, of having the opportunity to participate in legislative debate in the Oireachtas on the proposed amendment and possibly to attend the Convention envisaged by the ordinary revision procedure as a representative of the national Parliament. 175. Moreover, the reliance by the defendants on the principle established in Case T – 135/96 UEAPME v. Council [1998] ECR II – 2335, which they have referred to as the “principle of protecting democracy” seems to me to be contrived and unreal. The type of legal act being challenged there, a directive, is fundamentally different to the type of legal act being challenged by the plaintiff in this case, a decision of the European Council to amend the TFEU, which is a decision which has general application across the Union. In short, Decision 2011/199/EU, being the first decision made under Article 48(6), at this point in time, is not only novel, it is unique. I am not satisfied that it is a decision in respect of which the plaintiff could have standing to seek an annulment pursuant to Article 263 TFEU. If I had reached a different conclusion in relation to the plaintiff’s challenge to the validity of Decision 2011/199/EU to that outlined when dealing with issue (a) above, I would not have been in a position to determine that the plaintiff’s claim of his entitlement to seek a reference to the CJEU in these proceedings is precluded for failure to bring a direct challenge under Article 263 within the time limited in that Article. 176. In the interests of clarity, I consider it prudent to recapitulate on my understanding of the defendants’ defence on the basis of the plaintiff’s lack of standing and delay. It is that the plaintiff did have standing under the fourth paragraph of Article 263 to directly challenge the validity of Decision 2011/199/EU, in other words, to institute proceedings against the European Council in the CJEU, on the basis that it was “of direct and individual concern” to him for the reasons outlined earlier, but that he failed to seek a review under Article 263 within the time limited in that Article. Therefore, on the authority of the decision in the TWD case, he does not have standing to challenge the validity of that decision in this Court, in which his proceedings were initiated more than a year after the making of the decision and its publication in the Official Journal. Furthermore, the evidence establishes, the defendants assert, that he was aware of the decision from the date of its adoption, 25th March, 2011. The defence is premised on the plaintiff having standing to seek a review under Article 263, as to which, as I have already indicated, I find the defendants’ submissions far from convincing. 177. In the context of issue (b), both sides rely on the judgment of the Court of Justice, on an appeal from the Court of First Instance, in Case C – 50/00P Unión de Pequeños Agricultores v. Council [2002] ECR 1 – 6677, but for different purposes. There the Court stated at paragraphs 40, 41 and 42:
Thus it is for the Member States to establish a system of legal remedies and procedures which ensure respect for the right to effective judicial protection. In that context, in accordance with the principle of sincere cooperation laid down in Article 5 of the Treaty, national courts are required, so far as possible, to interpret and apply national procedural rules governing the exercise of rights of action in a way that enables natural and legal persons to challenge before the courts the legality of any decision or other national measure relative to the application to them of a Community act of general application, by pleading the invalidity of such an act.” 178. The defendants rely on paragraph 40 of the judgment of the Court in support of the proposition that the purpose of permitting individuals to seek review of a Union measure before national courts, rather than by direct annulment action, is to ensure an effective system of remedies, in other words, to ensure that there is no lacuna in the system for challenging such measures. The plaintiff, on the other hand, relies on para. 42 to demonstrate where the law stands at this point in time. While there is nothing fundamentally wrong in either proposition, the crux of the admissibility issue is whether the plaintiff would have been able to demonstrate “individual concern” so as to establish that he had standing to bring a direct challenge to Decision 2011/199/EU pursuant to Article 263 TFEU. I am not satisfied that he had, for the reasons outlined earlier, but if a definitive determination on issue (b) was necessary, I would have considered referring it to the CJEU for a preliminary ruling. 179. I do not consider that it is necessary to address the defendants’ submissions in support of their contention that the plaintiff cannot, under Irish law, pursue his claim as to the validity of Decision 2011/199/EU, and, possibly, as to the incompatibility of the ESM Treaty with the Union Treaties on the grounds of delay and waiver in depth. Decision 2011/199/EU awaits compliance with Article 2 thereof before entry into force under Union law and a Ministerial order commencing the relevant provision of the Amendment Act of 2012 remains to be made under Irish law. The ESM Treaty only acquired force of law in this jurisdiction after these proceedings were commenced. Issue (c) – Measures necessary for approval by Ireland of Decision 2011/199/EU in accordance with Irish law 181. As outlined in Section I earlier, by virtue of the Amendment Act of 2012, the giving of force of law to Decision 2011/199/EU was effected, in that the European Communities Act 1972 was amended, in consequence of which the Union law amending effect of that decision comes within the meaning of the expression “Treaties governing the European Union” in that Act. When the Amendment Act of 2012 comes into operation, as regards the decision, it will have that effect. In short, all that is necessary to give force of law in the State to Decision 2011/199/EU is an Act of the Oireachtas, which has been enacted in the Amendment Act of 2012. All that is required to bring the relevant provision of that Act into operation is a Ministerial order. 182. Accordingly, in my view, apart from the Ministerial order, all the measures have been adopted which are necessary to give Decision 2011/199/EU force of law in Irish law. Issue (d): Alleged unconstitutionality of the Amendment Act of 2012 184. As the Amendment Act of 2012 has been enacted since these proceedings were initiated, an issue which arose in the course of the proceedings as to whether, once the European Council acting by unanimity adopted Decision 2011/199/EU, the decision became binding on the Member States as a matter of Union law, so that, as the defendants submit, Ireland became obligated, as a matter of Union law, to engage in completion of the procedures for its approval in accordance with the constitutional requirements of Ireland and had no discretion in relation to such completion, is moot. Summary of conclusions/orders Section VI: Reference to CJEU for preliminary ruling 187. I propose tracing the provenance of the issue in the pleadings and the arguments advanced by the parties in their respective written legal submissions. It evolved in the pleadings as follows:
(b) With reference to paragraph 57, the defendants requested the plaintiff to particularise the plea in the following terms:
(d) In the defence, at paragraph 39, the defendants specifically denied the claims made in paragraph 57 and 59 of the statement of claim and continued:
190. Later, in their written legal submissions, the defendants dealt with the obligation imposed on Member States by Article 2 of Decision 2011/199/EU, namely, that Member States shall notify the Secretary-General without delay of the completion of the procedures for approval in accordance with their respective constitutional requirements, stating (at para. 171):
191. The defendants went on to deal with the issue which I consider remains, which they referred to as “a temporal dimension”, that is to say, that Decision 2011/199/EU, in accordance with its provisions, shall enter into force at the earliest on 1st January, 2013, stating that it is “a binding legal act for the purpose of Union law”. I find the submissions to be confusing and, possibly, ambiguous. It was not made clear (at para. 176), whether the defendants’ position is that it has been a binding legal act for the purpose of Union law since it was adopted on 25th March, 2011. Later, in the written legal submissions, in the context of addressing the constitutional requirements under Irish law for approving Decision 2011/199/EU, it seems to be the defendants’ case (in para. 180) that it is upon the entry into force of Decision 2011/199/EU, on or after 1st January, 2013 pursuant to Article 2 thereof, that the decision shall be binding. However, in the preceding paragraph (para. 179) the defendants submitted unequivocally that the Member States were “obliged” to approve the decision in accordance with their respective constitutional requirements. 192. In addressing the defendants’ submissions, counsel for the plaintiff opened the decision of Hogan J. in the Doherty case extensively. The reason the legal status of Decision 2011/199/EU at the time of the application in the Doherty case was in issue was because the statements in issue there, which had been made by the Referendum Commission and which were the subject of the application for judicial review on the basis of an allegation by the applicant that they were outside the subject matter of the referendum on the Fiscal Stability Treaty, concerned the proposed amendment of Article 136 TFEU. For instance, in the second statement, the Referendum Commission, inter alia, stated:
193. Having thus outlined the respective positions of the respondents, Hogan J. stated as follows (at paragraph 63):
195. Apart from the matters alluded to by Hogan J., the determination which this Court has to make on that issue raises a fundamental question. That is whether the entry into force of Decision 2011/199/EU in accordance, not only with its terms, but also in accordance with the provisions of Article 48(6), is an essential pre-condition to the coming into force of the ESM Treaty. It is to be noted that, in contrast to Article 48(6), which provides that the decision “shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements”, Article 48(4) TEU provides as follows:
196. If the coming into force of the ESM Treaty is dependent upon the coming into force of Decision 2011/199/EU, that has serious legal and practical implications, given that the decision shall enter into force on 1st January, 2013 at the earliest and then only provided that all of the notifications of completion of the procedures for approval in accordance with their respective constitutional requirements by all of the Member States have been received by the Secretary-General. Obviously, the legal implications would be compounded if one or more of the Member States were not to approve of the decision or were not to give notification of such approval to the Secretary General at any time. That would give rise to a fundamental question as to what was the legal status of Decision 2011/199/EU, which I have already described as unique, on its adoption, having regard to the express provisions therein in relation to entry into force. 197. For the foregoing reasons, I consider that the issue should be referred to the CJEU for a preliminary ruling. As was acknowledged by the parties during the hearing, it will be necessary for the Court to hear further submissions as to formulation of the question or questions to be referred to the CJEU. Section VII – Plaintiff’s application for interlocutory injunctive relief 199. As outlined in Section I, the application for an interlocutory injunction was grounded on the affidavit of the plaintiff sworn on 26th June, 2012. The defendants’ response was by an affidavit sworn by Mr. O’Brien on 27th June, 2012. Mr. O’Brien averred that he was authorised to confirm that it was the intention of the Government to deposit Ireland’s instrument of ratification of the ESM Treaty by 9th July, 2012 with the Depositary. The decisions given on 9th July, 2012 and this judgment have been given on the basis that such intention would be fulfilled. 200. In the Crotty case, on 24th December, 1986, the day following the enactment of the European Communities (Amendment) Act 1986, which was ultimately found by the Supreme Court not to be invalid having regard to the provisions of the Constitution, the High Court (Barrington J.), on the application of the plaintiff, granted an interlocutory injunction restraining the defendant, who, as he stated, in effect was the Government of Ireland, from depositing with the Government of the Italian Republic any purported instrument of ratification of the SEA. Subsequently, in a judgment of a Divisional Court of the High Court delivered on 12th February, 1987, in which all of the substantive reliefs sought by the plaintiff were refused, the interlocutory injunction was discharged. The plaintiff then appealed to the Supreme Court and he obtained an interlocutory injunction from the Supreme Court in similar terms to the order of Barrington J. pending the hearing of the appeal. 201. The judgment of the Supreme Court on the issue as to whether the plaintiff was entitled to an interlocutory injunction was delivered by Finlay C.J., with whom the other four Judges agreed, on 18th February, 1987. Finlay C.J. (at p. 763) identified the first issue arising as whether the plaintiff had established a fair issue to be tried as to the effect of ratification within the provisions of Article 29.4.3° of the Constitution and expressed the view that he had, although he expressed no view on the weight of the arguments. He then stated:
202. While counsel for the defendants urged that the Court should not refer any question to the CJEU for a preliminary ruling, it was submitted that, in the event of the Court deciding to refer, the issue as to whether interlocutory relief should be granted should be determined in accordance with the jurisprudence of the CJEU. In that connection, counsel for the defendants referred to two authorities. 203. The earlier authority is a decision of the Court of Justice in cases C – 143/88 & C – 92/89 Zuckerfabrik Süderdithmarschen [1991] ECR 1 – 415, a decision dating from 1991. There, the Finanzgericht (Finance Court) Hamburg had referred the validity of a Council Regulation introducing a “special elimination levy” in the sugar sector to the Court of Justice and also raised questions as to the jurisdiction of the national court to grant interim relief by suspending the operation of an administrative measure based on the impugned regulation until a decision would be reached in the main action. In the paragraphs relied on by counsel for the defendants, (paragraphs 23 to 33) the Court of Justice dealt with that issue and it then answered the question as follows in paragraph 33:
(i) if that court entertains serious doubts as to the validity of the Community measure and, should the question of the validity of the contested measure not already have been brought before the Court, itself refers that question to the Court; (ii) if there is urgency and a threat of serious and irreparable damage to the applicant; (iii) and if the national court takes due account of the Community’s interests.”
(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 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 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.”
The Court has also held that 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, even temporarily, Community rules from having full force and effect are incompatible with those requirements, which are the very essence of Community law . . .. It must be added that the full effectiveness of Community law would be just as much impaired if a rule of national law could prevent a court seised of a dispute governed by Community law from granting interim relief in order to ensure the full effectiveness of the judgment to be given on the existence of the rights claimed under Community law. It follows that a court which in those circumstances would grant interim relief, if it were not for a rule of national law, is obliged to set aside that rule.” 207. However, before attempting to apply those principles, it is necessary to identify clearly what relief could possibly be granted to the plaintiff on the basis of the decisions made. 208. First, the plaintiff is entitled to none of the reliefs he claims in relation to Decision 2011/199/EU, because he has failed to establish that the decision is invalid. The decision has, in effect, been approved by the Oireachtas and, subject to its entry into force in Union law, it will have force in Irish law as soon as the Minister makes a commencement order in respect of the relevant provision of the Amendment Act of 2012. However, on the assumption that entry into force of the ESM Treaty is dependent on entry into force of Decision 2011/199/EU, as the plaintiff contends, as it has not entered into force in Union law in accordance with Article 48(6) TFEU and Article 3 thereof, the implications of that as regards the effect and operability of the ESM Treaty remain to be determined, the Court being of the view that the questions on that issue which arise should be referred to the CJEU. 209. Secondly, as regards the ESM Treaty, the Court has held that it is not incompatible with Union law and, in particular, the provisions of the Union Treaties, and that it is not incompatible with the Constitution. Further, the requirements of the Constitution and, in particular, Article 29.5 have been complied with in the enactment of the ESM Act of 2012. The issue which remains is whether, as a matter of Union law, the ESM Treaty can enter into force or operate prior to the entry into force of Decision 2011/199/EU. On the basis of that analysis, it seems to me that, if the CJEU, on a preliminary ruling, were to determine that entry into force of the ESM Treaty was dependent on prior entry into force of Decision 2011/199/EU, it would be open to this Court to grant a declaration to the plaintiff to that effect. On the other hand, if the CJEU were to determine that the entry into force of the ESM Treaty is not dependent on the prior entry into force of Decision 2011/199/EU, in those circumstances the plaintiff would not be entitled to any relief in respect of the ESM Treaty. 210. Counsel for the defendants submitted that the following factors weigh against granting interlocutory injunction restraining the ratification of the ESM Treaty pending a ruling of the CJEU on a reference by the Court, which factors are based on matters of inference from the various documents put before the Court and the affidavit evidence of Mr. O’Brien:
(b) In general, the stability of the euro area would be seriously damaged by delayed ratification. (c) Timely ratification is imperative from Ireland’s perspective in that it is essential that Ireland is involved in the ESM Treaty from the outset, in order that it may participate and vote on early decisions of the ESM taken by mutual agreement. Apart from that, Mr. O’Brien has averred to a range of adverse consequences which may ensue if Ireland does not ratify the ESM Treaty in the short term, for example, detrimental impact on Ireland’s proposed re-entry into the financial markets in 2014 and a serious set-back to the substantial progress made to date by Ireland towards completing and exiting the EU-IMF programme by 2013. (d) Ireland’s timely ratification of the ESM Treaty is of the utmost importance for other Members of the ESM, and, in particular, the Members who are in need of financial assistance. Mr. O’Brien has averred that it is essential that the ESM should have the largest possible capital base from the outset, including Ireland’s contribution, which is relatively small but nonetheless important in the aggregate. (e) The favourable opinions adopted by the Commission and the European Central Bank are referred to, but, of course, those opinions relate only to the amendment of Article 136 and do not address the nexus between the entry into force of Decision 2011/199/EU and the entry into force of the ESM Treaty. (f) If ratification were to proceed on 9th July, 2012, it would not have any detrimental impact either on the plaintiff individually or on the national interest. (g) On the contrary, it is clearly in the national interest that ratification should proceed. (h) In any event, as the ESM is due to come into operation on an incremental manner, only two tranches of capital contributions will become due to be paid in within the next six months, which is the timeframe estimated for obtaining a ruling from the CJEU. (i) Further, Mr. O’Brien has furnished details in his affidavit of the usual timeframe, which he believes is unlikely to differ under the ESM when it is established, between applications by States for financial assistance and the disbursement of funds. He has averred that it follows that the capital contribution instalments that Ireland would be required to make between ratification of the ESM Treaty and the ruling of the CJEU would be unlikely to be fully leveraged by the ESM in raising funding on the financial markets for the purpose of providing financial assistance to ESM Members. 212. If the Court were to restrain the ratification of the ESM Treaty by Ireland, the probable consequences for Ireland are of a fundamentally different order to the consequences which actually ensued from the grant of an interlocutory injunction by the Supreme Court in the Crotty case. As it transpired in the Crotty case, it was within the capacity of the State to take the steps necessary to ensure that Title III of the SEA could be ratified by Ireland. The situation in this case is totally different. It is impossible to predict the fallout from restraining the Government from ratifying the ESM Treaty, save to say that, on the basis of Mr. O’Brien’s evidence, the probability is that it would be extremely detrimental to Ireland and to the other Members of the ESM. 213. On the basis of the principles set out in the Zuckerfabrik case, as the plaintiff has raised serious doubts as to whether the ESM can enter into force and operate before the entry into force of Decision 2011/199/EU, the Court must weigh in the balance –
(b) the interests of Ireland and of the other Members of the ESM and of the Union, which I am satisfied do not favour the grant of an interlocutory injunction restraining ratification of the ESM Treaty by Ireland. 214. Accordingly, the application for an interlocutory injunction restraining the ratification of the ESM Treaty is refused. Section VIII: Summary of decisions of the Court given on 9th July, 2012 A – Decision on issues arising from the European Stability Mechanism Treaty (ESM Treaty) which was signed by the seventeen euro area Members of the European Union on 2nd February, 2012. Subject to the qualification expressed below, I am satisfied that the plaintiff’s claim has not been established. The ESM Treaty is an international Treaty between the contracting parties which is not incompatible with Union law. The qualification relates to its effect and operability arising from the issue on the entry into force of Decision 2011/199/EU, which is addressed at B below. (2) The plaintiff claims that the Treaty is incompatible with the Constitution and that an amendment of the Constitution approved of by the people in a referendum is necessary before it can be ratified. The determination of this claim turns on the application of the majority decision of the Supreme Court in Crotty v. An Taoiseach [1987] IR 713. I am satisfied that, unlike participation in the Treaty at issue in the Crotty case (Title III of the Single European Act), participation in the ESM Treaty will not involve any transfer or diminution of sovereignty by Ireland to the European Stability Mechanism (ESM) or other Members of the ESM. Therefore, I am satisfied that the ESM is not incompatible with the Constitution. (3) The plaintiff claims that the European Stability Mechanism Act 2012 (No. 20/2012), which was signed by the President last week, which, inter alia, authorises the Minister for Finance to subscribe to the authorised capital stock of the ESM to a maximum of €11.1454 billion and gives legal status to the ESM within the State is unconstitutional. I am satisfied that the Act is not invalid having regard to the provisions of the Constitution on the grounds alleged by the plaintiff. B – Decision on issues arising from Decision 2011/199/EU of the European Council of 25th March, 2011 amending Article 136 TFEU pursuant to Article 48(6) TEU The jurisdiction of this Court to review the decision, as a decision adopted by an institution of the European Union, is governed by the decision of the CJEU in Foto-Frost v. Hauptzollamt Lübeck-Ost (Case 314/85) [1987] ECR 4199. I am satisfied that the grounds put forward by the plaintiff in support of his claim that the Decision is invalid are unfounded. I have come to the conclusion that the Decision is “completely valid” in accordance with Union law. (2) The plaintiff originally sought a permanent injunction restraining the Government from giving effect to the proposed amendment of Article 136 TFEU otherwise than by constitutional amendment approved by the people in referendum. During the hearing, the plaintiff sought an interlocutory injunction restraining the defendants from completing the approval procedures pending the determination of these proceedings. The plaintiff’s claim that the approval of the declaration requires an amendment of the Constitution approved by the people in referendum is rejected. The people have approved, in the referendum on the Lisbon Treaty, inter alia, the amendment of the TEU by the inclusion of the simplified revision procedures now to be found in Article 48(6) TEU. Having found that the Decision, which was adopted by utilising the simplified revision procedures, is completely valid in Union law, I am satisfied that an amendment of the Constitution is not necessary as a preliminary to giving the Decision force of law in Irish law. (3) The plaintiff claims that the European Communities (Amendment) Act 2012 (No. 21/2012), which was signed by the President last week and which amends the European Communities Act 1972 by insertion of the Decision into the definition of “Treaties governing the European Union” therein, is unconstitutional. Having regard to the conclusions set out at (1) and (2) above, I consider that the plaintiff’s claim is unsustainable. I conclude that the Act is valid having regard to the provisions of the Constitution. As, by virtue of the Act, the Decision has been given force of law in the State, the contentious proposition advanced on behalf of the defendants that, once the European Council acting by unanimity adopted the Decision on 25th March, 2011 amending Article 136, which was the substantive provision of the Decision, the Decision became binding on the Member States as a matter of Union law, so that Ireland became obligated, as a matter of Union law, to engage in completion of the procedures for approval of the Decision in accordance with the constitutional requirements of Ireland, is moot. It is moot as regards approval by Ireland of the Decision in accordance with the constitutional requirements of Ireland. (4) During the hearing, counsel for the plaintiff made a formal request that a question be referred to the CJEU pursuant to Article 267 TFEU as to whether the adoption of the Decision, but which has not been, at the relevant time, entered into force, is capable of altering the entitlement of Member States to enter into an international agreement such as the ESM Treaty. The primary focus of the question proposed for referral, as formulated by counsel for the plaintiff, was on the utilisation of the simplified revision procedure provided for in Article 48(6) in making the Decision. Having regard to the conclusion I have reached on the validity of the Decision in Union law, it follows that I consider that it is not necessary to refer a question to the CJEU on the validity of the Decision in Union law. As to the temporal component of the proposed question, which identifies an issue as to the implications of the intention of the Members of the ESM to ratify the ESM Treaty before the Decision shall enter into force, which will not happen until 1st January, 2013 at the earliest, it is the aspect of the proceedings which I have found most difficult to determine. The factual position is that there is no evidence before the Court as to the current position in relation to approval by the Member States of the EU “in accordance with their respective constitutional requirements” of the amendment of Article 136 TFEU either in accordance with the terms of Article 48(6) or of Article 2 of the Decision. On the assumption that all Member States have not yet given notice of approval in accordance with Article 2, issues arise as to the implications of one or more Member States not approving the Decision and not giving notification of such approval in accordance with Article 2 of the Decision. Some of those issues are referred to in the decision of this Court (Hogan J.) in Doherty v. The Referendum Commission [2012] IEHC 211. In the context of these proceedings, the principal issue which arises is what would be the effect of the failure of one or more Member States to comply with Article 2 of the Decision on the effect and operability of the ESM. I have come to the conclusion that a reference to the CJEU is necessary to address that issue. Notwithstanding the submissions made on behalf of the defendants that such a request is time-barred, I am not satisfied that it is. However, consideration may be given to whether the issue of admissibility should also be referred to the CJEU. C – The plaintiff’s claim for an interlocutory injunction restraining the Government from ratifying the ESM Treaty pending the determination of the proceedings |