CANADA Trends and Developments Contributed by: Craig A B Ferris, Michael J Donaldson and Scott Lucyk, Lawson Lundell LLP
On appeal, Rahmani argued Decree 34 should not have been relied upon by the lower court in its inter - pretation of the parties’ arbitration agreement. The Ontario Court of Appeal disagreed with Rahmani’s argument and dismissed his appeal. Before determin - ing whether the arbitration complied with the parties’ agreement, the application judge first needed to inter - pret the agreement itself. The application judge was entitled to review the parties’ agreement as an initial step, prior to any analysis of whether the parties’ arbi - tration agreement had been followed. The DIFC-LCIA rules contemplated future amendment. Decree 34 amended the DIFC-LCIA rules. As the parties agreed to a set of rules that permitted future amendment, Decree 34 was validly considered by the first-instance court in its analysis. This decision confirms that courts may enforce foreign arbitral awards under the New York Convention and Model Law where the arbitration rules change after the contract is agreed. Parties should review their current contracts and consider amendments where necessary in light of changes to arbitral rules or institutions. The Defence of Public Policy is a High Bar to Clear In Feicheng Mining Group v Liu , 2026 ONSC 1969, the Ontario Superior Court of Justice reaffirmed the high bar parties must clear when seeking to avoid the enforcement of foreign arbitral awards on public policy grounds. The invocation of the public policy defence must be raised in reference to “repugnant laws and not repugnant facts.” In December 2012, Feicheng Mining Group Co. Ltd. (Feicheng Mining) entered into a joint venture agree - ment with Canadian Dehua International Mines Group Inc. (Dehua) to be governed by the law of the People’s Republic of China (PRC). The joint venture agreement contained an arbitration clause that specified that any disputes arising from the agreement shall be submit - ted to arbitration before the China International Eco - nomic and Trade Arbitration Commission (CIETAC). In February 2018, Feicheng Mining and Dehua entered into a repayment agreement following Dehua’s default on certain payments. As part of the repayment agree - ment, Dehua’s outstanding obligations were resched - uled and Naishun Liu (Liu), as a director and 50%
shareholder of Dehua, was required to assume joint and several personal liability for the debt. The repay - ment agreement also contained an arbitration clause, which referred any disputes to CIETAC. In 2019, Feicheng Mining commenced arbitration proceedings against Dehua and Liu before CIETAC pursuant to the February 2018 repayment agreement. The CIETAC tribunal issued a unanimous award in Feicheng Mining’s favour. Liu argued that he signed the repayment agreement under duress. This duress argument was based on Feicheng Mining instigating criminal proceedings against him in China, which he alleges the company used to secure his signature on the repayment agreement. The tribunal rejected this argument. It found that Liu’s only evidence of coercion was the criminal investigation being dropped after he signed the agreement and that was insufficient evi - dence. All parties participated in the proceedings. Feicheng Mining applied to have its arbitral award enforced against Liu in Ontario. The court found the award to be valid and enforce - able under CIETAC and PRC law. The only question for the court was whether the award was enforceable in Ontario. Liu raised the defence of public policy to resist the enforcement of the award in Ontario. Under Article V of the New York Convention and Article 36 of the Mod - el Law, a court may refuse to recognise and enforce the award issued in a foreign arbitral proceeding where the “recognition or enforcement of the award would be contrary to the public policy” of the respec - tive court’s own country. The court found that the public policy defence is a high bar to meet and that the defence must focus on the public policy issue related to a foreign law, not the factual matrix underlying a foreign arbitral award. Liu argued the tribunal’s refusal to accept his evidence that he only signed the repayment agreement under duress is sufficiently repugnant to Canadian contract law to set aside the award. The Ontario Court reject - ed Liu’s duress argument. During the initial arbitra -
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