POLITICS

B.C. man alleging 'false imprisonment' in China to get day in Canadian court

04/14/2015 07:49 EDT | Updated 06/23/2015 03:00 EDT
VANCOUVER - A British Columbia man has won the right to sue a company in a Canadian court that he alleges conspired with Chinese authorities to force him to spend years behind bars in China.

The B.C. Supreme Court rejected a bid by Silvercorp Metals Inc. (TSX:SVM) to have Kun Huang's allegations of "false imprisonment" thrown out.

The Vancouver-based mining company had claimed in court that the case would be better dealt with in the Chinese justice system.

"The burden is on the defendant to establish that the alternative forum is the 'clearly more appropriate forum,'" wrote Justice Carol Ross in her judgment released Tuesday.

"Silvercorp has not established that China is the clearly more appropriate forum."

Court documents outlined how Huang worked at the time in China as a researcher for John Carnes of EOS Funds, a New York-based hedge fund manager.

In 2011, he contributed to a brief but damning report that highlighted discrepancies in Silvercorp's financial and mining output reports to Canadian and Chinese authorities.

In his lawsuit, Huang alleged the mining company provided money and encouragement to local police, directing them to detain and interrogate him.

He claimed local police, at Silvercorp's direction, demanded he turn over passwords to his computer, email and trading accounts associated with EOS.

The documents further allege that Silvercorp used that access to find documents to bolster its defamation claim against Huang.

Following a lengthy detention, Huang was reportedly convicted in September 2013 in a single-day, closed-door criminal trial.

He claims the trial was attended by two lawyers from Silvercorp who, effectively acted as prosecution.

He was found guilty of "harming the business credibility and product reputation" of Silvercorp and sentenced to two years in prison but was released and deported, at his own expense, to Canada in July 2014.

None of the allegations have been proven in court.

Note to readers: This is a corrected story. An earlier version misspelled the company's name as Silvercorps.