In the high profile case of Jacky Zong and Others v Kelly Fuli Zong and Others [2025] HKCFI 3355, the Hong Kong Court of First Instance clarifies the jurisdiction and principles for granting interim reliefs in aid of foreign proceedings under section 21M of the High Court Ordinance (Cap. 4) (“HCO”). The case caught intense social media attention in mainland China as the multi-billion-dollar constructive family trust dispute arose following the death of Mr Zong Qinghou, founder of Wahaha Group in February 2024. Substantive proceedings were commenced in the Hangzhou Intermediate People’s Court by the late founder’s alleged three children regarding a US$1.8 billion portfolio held in a private bank account in Hong Kong.
Two-Stage Test
The Court applied the established two-stage test set out in Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd (2016) 19 HKCFAR 586. The test is set out as follows :-
- Stage One – Enforceability and Substantive Threshold
The Court must be satisfied that a judgment to be rendered by the foreign court would be enforceable in Hong Kong.
If it is so enforceable, the usual principles determining whether interlocutory relief should be granted in a Hong Kong action will apply, save that the Court is to consider the strength of the parties’ case from the standpoint of the foreign court, instead of the Hong Kong Court.
- Stage Two – Unjust and /or Inconvenient
The Court has a broad discretion when considering the question of whether granting relief would be unjust or inconvenient, particularly since it lacks jurisdiction over the subject matter of substantive dispute in the foreign court.
The judgment provided crucial clarification on the legal thresholds. It distinguished between a standard Mareva (or freezing) injunction, which requires proof of a “good arguable case” and a real risk of dissipation of assets as strict prerequisites, and a proprietary injunction or preservation order. For the latter, which was sought in this case based on a constructive trust claim, the applicant only needs to establish a “serious issue to be tried”. A real risk of dissipation remains a relevant factor in exercising the Court’s discretion but is not a strict prerequisite for granting the order.
Court’s Analysis and Ruling
The Court held that a prior application to the foreign court for relief is not a mandatory precondition under section 21M of the HCO, though failure to explain such omission in an ex parte application may constitute material non-disclosure.
When applying the two-stage test, the Court considered the following factors :-
- Stage One : The Court was satisfied that a mainland China’s judgment would be enforceable and found that there are “serious issues to be tried” on the plaintiffs’ proprietary claims (including breach of trust and breach of contract).
- Stage Two : The Court granted a tailoured relief, emphasising three key principles. First, it recognised the practical reality that the mainland China’s courts rarely freeze offshore assets, making Hong Kong relief essential for any meaningful enforcement. Second, it affirmed the role of Hong Kong Court to preserve the disputed assets without interfering with the mainland China court’s case management. Third, the preservation order was meticulously designed to permit ongoing investments while preventing dissipation (by prohibiting withdrawals and encumbrances), and an ancillary disclosure order was granted strictly for the purpose of ensuring the effectiveness of the preservation order, not as a finding on the merits of the case.
Significance
The case reinforces Hong Kong’s strategic role as a hub for interim reliefs in support of mainland China’s and other foreign proceedings, particularly where offshore assets are held locally.
The judgment helpfully clarifies the lower “serious issue to be tried” threshold for proprietary claims under section 21M of HCO. It also confirms the Court’s flexible approach in exercising its discretion at the second stage of the test. The Court also demonstrated its willingness to grant effective and tailoured relief that assists foreign proceedings without encroaching on the foreign court’s jurisdiction, setting an example for cooperative cross-border litigation.
The ruling strengthens Hong Kong’s position as a trusted common-law forum for obtaining urgent protective measures. It provides vital guidance for litigants and practitioners navigating multi-jurisdictional disputes, especially those involving complex asset preservation across the Hong Kong-Mainland border.
If you have any questions about the above eNews or cross border litigation, dispute resolution matters or enforcement of foreign judgments in Hong Kong, experienced lawyers in our Litigation and Dispute Resolution team will be happy to assist you.
