Ruling notes Chinese tribunal assessed claims of coercion, threats, intimidation
The Ontario Superior Court has granted an application for recognition and enforcement of a unanimous arbitration award issued by the China International Economic and Trade Arbitration Commission (CIETAC) in October 2019 upon finding the award valid and enforceable in Ontario.
In Feicheng Mining Group v. Liu, 2026 ONSC 1969, the respondent was a director and 50-percent shareholder of the Canadian Dehua International Mines Group Inc. (Dehua), a Canadian corporation with creditor protection pursuant to a June 2022 restructuring order made under the Companies’ Creditors Arrangement Act, 1985.
After defaults on payments owed to the applicant, a state-owned entity in China, Dehua and the parties executed a February 2018 repayment agreement to set a payment schedule.
Under the agreement, the respondent became jointly and severally liable with Dehua for repayment and had to give collateral security. A provision required the parties to submit any disputes arising from the agreement to CIETAC arbitration in Beijing under China’s laws.
The respondent alleged that he was incapacitated and under duress when he signed the agreement, given his mental health breakdown due to a campaign of oppression, coercion, and threats against him and his family in China.
The respondent claimed that the applicant wrongfully accused him of contractual fraud, a criminal offence under China’s laws. The applicant allegedly used the criminal proceedings to intimidate him into signing the agreement, then withdrew the proceedings 15 days after the signing.
The respondent alleged that recognizing and enforcing the October 2019 arbitral award would offend the morality of the Ontario public and violate Canadian public policy on autonomy and free will in contract, whether viewed from the perspective of duress or unconscionability.
Enforcement granted
Ruling in the applicant’s favour, the Ontario Superior Court of Justice deemed the award valid and enforceable in Ontario and issued a judgment in accordance with the award.
The court noted that the parties did not challenge the integrity of the tribunal or the legitimacy of the arbitration process to warrant an application under art. 58 of the Arbitration Law of the People’s Republic of China (Revision 2017).
The court noted that the respondent’s remedy was to ask China’s courts to cancel the award under art. 58 if he was claiming that there was no agreement to arbitrate due to threats and intimidation while he was under mental distress.
Regarding the respondent’s allegations of coercion, threats, and intimidation in connection with signing the agreement, the court noted that the tribunal clearly assessed and unanimously rejected these claims.
The court ruled that the respondent asserted no viable public policy argument to resist enforcing the award. Without allegations of the tribunal’s misconduct or jurisdictional issues, the court held that the respondent was collaterally attacking the award via a public policy argument.
The court explained that someone resisting an arbitral award’s recognition and enforcement for public policy reasons should show that enforcement would offend the essential morality of Ontarians, which was an exceptionally high bar to meet.
Regarding the respondent’s request to set aside the agreement as repugnant to Canadian public policy regarding contract law, the court concluded that the tribunal had jurisdiction over the factual determination for this argument.
