In Feicheng Mining Group Co. Ltd. v. Liu, 2026 ONSC 1969, the Ontario Superior Court of Justice enforced a China International Economic and Trade Arbitration Commission (CIETAC) award, reaffirming the narrow scope of the defences available under the New York Convention and the UNCITRAL Model Law. The respondent, a director and shareholder of the corporate respondent in the arbitration, resisted enforcement on the grounds of incapacity and public policy, alleging that he had signed the underlying repayment agreement, pursuant to which he was found liable for the debt of the corporation, under duress. The Court rejected both arguments. The public policy defence is not a vehicle for collateral attack on factual findings made by a competent tribunal, and where remedies in the seat were available to challenge the award, failure to pursue them becomes critical at enforcement.
Facts
Feicheng Mining Group Co. Ltd., a Chinese state-owned enterprise, and Canadian Dehua International Mines Group Inc. entered into a joint venture agreement in December 2012, governed by the law of the People’s Republic of China (PRC). It contained a CIETAC arbitration clause.
Following Dehua’s payment defaults, the parties executed a repayment agreement on February 9, 2018. That agreement rescheduled Dehua’s outstanding obligations and required Naishun Liu, Dehua’s director and 50% shareholder, to assume joint and several personal liability for the debt.
In October 2019, Feicheng commenced CIETAC arbitration against Dehua and Liu. Liu argued that the repayment agreement was invalid for duress, alleging that Feicheng had instigated criminal proceedings against him in China and used the threat of prosecution to coerce his signature. He relied on the fact that the criminal investigation was withdrawn approximately 15 days after execution of the agreement. The tribunal considered and rejected these allegations, finding that Liu had not established coercion and that the agreement was valid and binding under PRC law. The tribunal issued a unanimous award in Feicheng’s favour on October 9, 2019.
Issue
The issue was whether the respondent could resist enforcement of the CIETAC award in Ontario on grounds of incapacity under Article V(1)(a) or public policy under Article V(2)(b) of the New York Convention, where the underlying duress allegations had been determined by the arbitral tribunal and no challenge had been brought at the seat.
Decision
The Court granted the application and ordered enforcement.
Incapacity: Article V(1)(a)
The Court rejected the incapacity defence as an attempt to reopen issues already decided by the arbitral tribunal. The validity of the repayment agreement and the allegations of duress were fully argued before the arbitral tribunal and were expressly rejected on the evidence.
The Court held that where PRC law provides a mechanism to challenge the existence or validity of an arbitration agreement through cancellation proceedings, that mechanism must be pursued at the seat of arbitration. If Mr. Liu’s position were correct that no valid arbitration agreement existed due to incapacity or duress, the appropriate remedy was to seek cancellation of the award in China.
Because the award was final and enforceable under PRC law, the Court would not permit Mr. Liu to relitigate the same issue indirectly at the enforcement stage. The incapacity defence under Article V(1)(a) was therefore unavailable.
Public Policy: Article V(2)(b)
The Court reached the same conclusion with respect to public policy. It reaffirmed that refusal of enforcement on public policy grounds is reserved for circumstances where enforcement would “fundamentally offend the most basic and explicit principles of justice and fairness in Ontario,” or reveal corruption or serious impropriety in the arbitral process. This is a high threshold.
The Court emphasized that the public policy defence targets “repugnant laws, not repugnant facts.” It is not concerned with whether a foreign tribunal reached the right factual conclusion, but with whether the foreign legal regime itself is fundamentally incompatible with Canadian values.
Liu did not attack PRC contract law or PRC arbitration law. Nor did he allege bias, corruption or procedural unfairness by the arbitral tribunal. Instead, he challenged the tribunal’s factual finding that the evidence did not establish coercion. That type of challenge falls squarely outside the scope of the public policy exception and amounts to an impermissible relitigation of the merits.
Key takeaways
The decision clarifies that, although Article V(1)(a) of the New York Convention allows a party to resist enforcement on the basis of incapacity without requiring a prior set‑aside application at the seat, an enforcement court may examine whether the alleged incapacity turns on factual issues that were already determined by the arbitral tribunal.
The respondent’s failure to seek cancellation of the CIETAC award in China was therefore significant as PRC law expressly provided a mechanism to challenge the existence and validity of the arbitration agreement. In that context, the Court refused to allow Article V(1)(a) to be used to reopen factual findings or to operate as a collateral attack on a final and binding award.
Further, the decision is a reminder that allegations of duress, however serious, do not operate as automatic defences to enforcement. Where such allegations are about “repugnant facts” and not “repugnant laws,” they must be fully pursued in the arbitration itself.
For more information on this topic, please contact the authors, Chloe Snider and Ekin Cinar.
