Ontario Court Enforces CIETAC Award and Grants Full Indemnity Costs

THC Lawyers successfully represented Feicheng Mining Group Co. Ltd. in obtaining recognition and enforcement of a CIETAC arbitral award in Ontario for more than RMB 300 Million. In Feicheng Mining Group v. Liu, 2026 ONSC 1969, released on April 1, 2026, Justice Mills rejected the respondent’s attempts to resist enforcement based on alleged incapacity and public policy. In a separate costs endorsement issued the same day, the Court awarded our client C$121,644.48 in full-indemnity costs.

The decisions illustrate the limited scope for resisting enforcement of an international arbitral award and the financial significance of a contractual obligation to pay enforcement expenses. They also show why parties must distinguish a proper challenge to recognition from an attempt to revisit factual issues already decided in arbitration.

The dispute and the arbitration

The dispute arose from the business relationship between Feicheng and Canadian Dehua International Mines Group Inc. Naishun Liu was a director and 50% shareholder of Dehua. Following payment defaults, the parties entered into a repayment agreement on February 9, 2018. Liu provided collateral security and assumed joint and several liability with Dehua for the repayment obligations. Before that agreement, he had no personal contractual or financial obligations to Feicheng.

The repayment agreement provided for disputes to be resolved by the China International Economic and Trade Arbitration Commission, commonly known as CIETAC, in Beijing under PRC law. A three-member tribunal heard the dispute, with both sides participating through written and oral submissions. It issued a unanimous award on October 9, 2019.

Liu argued in the arbitration that threats and coercion associated with criminal proceedings in China had compelled him to sign the repayment agreement. The tribunal considered that argument and found the evidence insufficient to establish coercion. It concluded that the agreement reflected the parties’ intentions and was valid under the applicable law. Those findings later became central to the Ontario enforcement proceeding.

The limited grounds for refusing enforcement

Ontario’s International Commercial Arbitration Act, 2017 gives effect to the New York Convention and the UNCITRAL Model Law. As the Court explained, these instruments provide limited grounds for refusing recognition and enforcement, including certain circumstances involving incapacity and public policy. Feicheng filed a certified copy of the award with an English translation, satisfying the preliminary documentary requirements identified by the Court.

Liu resisted enforcement by renewing his allegations of threats, intimidation, and resulting mental distress. He argued that he lacked capacity when signing the agreement and that enforcing an award based on a coerced agreement would offend fundamental Canadian principles of contractual autonomy and free will. These were allegations advanced by the respondent; they were not findings that the agreement had been procured by coercion.

Why the public policy defence failed

The Court focused on the fact that the tribunal had already considered and rejected the same allegations. There was no allegation of misconduct by the tribunal or a defect in its jurisdiction. Justice Mills characterized the respondent’s position as a collateral attack on the award presented as a public policy objection. [1, para. 18]

The public policy threshold was exceptionally demanding. The Court explained that enforcement must offend Ontario’s most fundamental principles of justice and fairness, or reveal an intolerable failure of integrity in the arbitral process. Disagreement with the tribunal’s assessment of the evidence did not meet that standard.

In its reasoning, the Court distinguished “repugnant laws and not repugnant facts.” Liu challenged a factual determination about whether he had signed under duress. That issue fell within the tribunal’s authority, and the tribunal had received evidence directly addressing it. His objection did not establish that the foreign law underlying the award offended fundamental public policy. The Court therefore found no viable public policy defence.

The Court also addressed the availability of a challenge at the seat of arbitration. Referring to the PRC arbitration law applicable to the dispute, it identified limited grounds for seeking cancellation of an award. It held that, if Liu wished to argue that no valid arbitration agreement existed because of threats and mental distress, the proper recourse was a cancellation application before the courts in China. He had not pursued that route. This was part of the Court’s reasoning on these facts, rather than a ruling that every failure to challenge an award at its seat automatically eliminates all enforcement defences.

Full indemnity costs under the repayment agreement

The separate costs decision turned on the repayment agreement’s enforcement-expense provision. The agreement required Liu to bear expenses incurred in realizing Feicheng’s rights, including legal costs and attorney’s fees. The Court held that this provision entitled Feicheng to costs on a full-indemnity basis.

The Court nevertheless assessed reasonableness and proportionality. It considered the complexity and importance of the issues, the parties’ conduct, the time spent, the billing rates, and what the unsuccessful party could reasonably have expected to pay. It found that both parties had conducted themselves appropriately and that neither had taken unnecessary or improper steps. The award was therefore grounded in the contractual entitlement and the reasonableness of the claim, rather than a finding of litigation misconduct.

Justice Mills found the applicant’s rates reasonable and the time incurred commensurate with the work performed. The respondent’s own costs claim exceeded two and a half times the applicant’s claim, supporting the conclusion that the amount sought fell within his reasonable contemplation. The Court awarded the full C$121,644.48 claimed, including fees, disbursements, and HST.

Implications for cross border recovery

The Court granted recognition and enforcement and directed that judgment issue in accordance with the award. It also recorded that Liu had property in British Columbia and that the parties intended to rely on the Ontario decision to determine enforceability there. The endorsement did not itself establish that assets had been recovered or that a separate British Columbia judgment had been obtained.

For businesses using international arbitration, the decisions emphasize the importance of presenting evidence fully during the arbitration and obtaining timely advice about challenges at the seat. For creditors, they also demonstrate the value of clear contractual provisions addressing enforcement expenses. Our representation secured recognition of the award in Ontario and an award of the reasonable legal costs claimed, providing our client with a stronger position from which to pursue enforcement.

Decisions discussed

[1] Feicheng Mining Group v. Liu, 2026 ONSC 1969, Justice Mills, April 1, 2026, Court File CV-24-0889.

[2] Feicheng Mining Group Co. Ltd. v. Liu, costs endorsement, Justice Mills, April 1, 2026, Court File CV-24-0889.