US$1.8 Billion At Risk: Hong Kong’s Cross-Border Asset Preservation Power In The Zong Family Trust Dispute

Abstract

On 21 July 2026, the Hong Kong Court of Appeal, in Jacky Zong & Ors v Kelly Fuli Zong & Anor [2026] HKCA 1292, dismissed the renewed application by Kelly Fuli Zong and Jian Hao Ventures Limited for leave to appeal against the preservation order concerning approximately US$1.8 billion in assets held in an HSBC Hong Kong account, and refused to continue the stay of part of the disclosure order. The Court of Appeal confirmed that section 21M of the Hong Kong High Court Ordinance is not confined to traditional Mareva injunctions. Where proceedings outside Hong Kong seek specific performance, transfer of property, or other relief that may directly affect particular assets, the Hong Kong courts may preserve those assets to safeguard the practical effectiveness of any eventual judgment of the foreign court; such preservation does not necessarily require the applicant to establish a real risk of dissipation. The Court of Appeal further held that an applicant’s failure first to seek similar preservation relief from the Mainland court does not constitute a jurisdictional bar, and that disclosure of historical asset movements may be ordered as an ancillary measure to ensure the effectiveness of the preservation order. Against this background, this article analyses the distinction between preservation orders under section 21M and Mareva injunctions, the respective functions of the Hong Kong and Mainland courts, and the proper scope of ancillary disclosure orders, and offers practical guidance on coordinating substantive proceedings, asset preservation and enforcement strategy in cross-border family wealth disputes.

Main Text

One of the most challenging situations in cross-border family wealth disputes arises where the substantive rights are adjudicated by a court in one jurisdiction, while the key assets are located in another. Must an applicant first seek preservation relief from the court hearing the substantive proceedings? Can the court where the assets are located freeze those assets without determining their ultimate ownership? If the applicant cannot establish the real risk of dissipation required for a traditional freezing injunction, must the application for preservation necessarily fail?

The Hong Kong Court of Appeal recently addressed these questions in Jacky Zong & Ors v Kelly Fuli Zong & Anor [2026] HKCA 1292¹. In that case, three children of the late Zong Qinghou² had commenced proceedings in Hangzhou, contending that, pursuant to documents executed by Zong Qinghou during his lifetime and an agreement subsequently entered into by Kelly Fuli Zong, she was required to establish offshore trusts for their benefit, to be funded from assets held in an HSBC Hong Kong account in the name of Jian Hao Ventures Limited, and to perform the related obligations. The Hong Kong court had previously made a preservation order and a disclosure order in respect of approximately US$1.8 billion in assets in the account under section 21M of the High Court Ordinance. The Court of Appeal ultimately dismissed the defendants’ renewed application for leave to appeal.

The Hong Kong court did not determine whether the trusts had been established or that ownership of the assets had been resolved. On the contrary, the Court of Appeal repeatedly emphasised that the disputes concerning the trusts, the Agreement and the parties’ interests in the assets remained matters for determination in the Hangzhou Proceedings. What the case does confirm is that, before any substantive judgment has been rendered, where the proceedings in other jurisdictions raise serious issues to be tried and the relief ultimately granted may directly affect assets located in Hong Kong, the Hong Kong court may invoke section 21M to preserve those assets and may order such disclosure as is necessary to ensure the effectiveness of the preservation measures. In cross-border trust, succession and family business disputes, substantive proceedings and asset preservation should therefore be planned as part of an integrated strategy from the outset.

I. Case Overview

(A) Family Trust Arrangements and the Hangzhou Proceedings

The assets in dispute are held by Jian Hao Ventures Limited (“Jian Hao”), a BVI company. As at 31 May 2024, Jian Hao’s account with HSBC Hong Kong (the “HSBC Account”) had a net asset value of approximately US$1.8 billion, consisting primarily of bonds, other fixed income assets, cash and time deposits (the “HSBC Account Assets”). Kelly Fuli Zong became Jian Hao’s sole shareholder on 2 February 2024. Following Zong Qinghou’s death on 25 February 2024, she also became the company’s sole director, replacing Zong Qinghou.³

According to the Hong Kong judgments, Jacky Zong, Jessie Jieli Zong, Jerry Jisheng Zong and Kelly Fuli Zong are all children of Zong Qinghou by different mothers. The three plaintiffs rely on three documents. The first is an undated handwritten document (the “Handwritten Instructions”), allegedly written by Zong Qinghou to a third party in late January 2024, which sets out his intention to establish three trusts of US$700 million each. The second is a letter of entrustment (the “Letter of Entrustment”) executed by Zong Qinghou, to which Kelly Fuli Zong confirmed her agreement on 2 February 2024 by way of a confirmation letter, providing for the establishment of the three offshore trusts. The third is an agreement (the “Agreement”) entered into on 14 March 2024 between Kelly Fuli Zong and the three plaintiffs, in which Kelly Fuli Zong undertook to establish the trusts using the HSBC Account Assets.⁴ On that basis, the plaintiffs contend that Kelly Fuli Zong was subject to contractual and fiduciary obligations to establish the trusts and to hold and manage the relevant assets, and allege that she failed to establish the trusts, failed to provide complete information regarding the account, and disposed of part of the assets. Kelly Fuli Zong disputes the validity of the Handwritten Instructions, whether any trust or fiduciary relationship arose, and the nature of the transactions in question.⁵

The three plaintiffs have commenced proceedings in Hangzhou, which are being heard by the High People’s Court of Zhejiang Province. They seek orders requiring Kelly Fuli Zong to perform the relevant agreement, pay the income generated by the relevant assets, and compensate them for losses arising from the unauthorised disposal of assets.⁶ Whether those substantive claims are made out, whether the relevant documents give rise to trust or contractual obligations, and the ultimate ownership of the assets in the account are all matters to be determined in the Hangzhou Proceedings.

(B) Hong Kong Asset Preservation and Appeal Proceedings

As the key assets were located in Hong Kong, the three plaintiffs applied to the Hong Kong Court of First Instance on 30 December 2024 for interim relief under section 21M of the High Court Ordinance. On 1 August 2025, the Court of First Instance granted a preservation order restraining Kelly Fuli Zong and Jian Hao from withdrawing or encumbering the HSBC Account Assets, and extending the preservation to the substitute or traceable proceeds of assets transferred out of the account on or after 2 February 2024. The Court also ordered the defendants to disclose the latest balance of the account, the whereabouts of assets disposed of or transferred on or after 2 February 2024, and the movements of assets, income and expenditure in respect of the account.⁷

On 15 August 2025, the defendants applied for leave to appeal and sought a stay of part of the disclosure order. On 26 September 2025, the judge dismissed the application for leave to appeal but granted an interim stay of part of the disclosure obligations pending the defendants’ renewed application to the Court of Appeal.⁸ The defendants subsequently renewed their application for leave to appeal on 9 October 2025. On 21 July 2026, the Court of Appeal dismissed the renewed application and the application for a stay of the disclosure order, and ordered the defendants to pay the plaintiffs’ costs in the sum of HK$250,000.⁹

II. Issues in Dispute

The defendants argued that, although the plaintiffs sought a preservation order under section 21M, the relief sought was in substance a Mareva injunction. Accordingly, the plaintiffs should have been required to establish a good arguable case and a real risk of dissipation. The core issues in the case may be grouped into three categories. First, Grounds 1, 3 and 4 concerned the nature and the applicable standards of the preservation order under section 21M, including whether the order should be characterised as a traditional Mareva injunction or as a preservation order directed at specific assets that may be directly affected by the outcome of the Hangzhou Proceedings; whether the existing documentary evidence was sufficient to establish serious issues to be tried; and whether the applicants were required to establish a real risk of dissipation. Second, Ground 2 concerned whether the applicants’ failure first to seek asset preservation relief from the Mainland court precluded them from applying directly to the Hong Kong court for relief under section 21M. Third, Ground 5 concerned whether the court could, for the purpose of ensuring the effectiveness of the preservation order, require the respondents to disclose historical transactions and asset movements, and whether such disclosure would improperly intrude upon the substantive issues in the Hangzhou Proceedings.

The Court of Appeal was not determining a full substantive appeal, but rather a renewed application for leave to appeal. The question before the Court was whether the intended appeal had a reasonable prospect of success or whether there was some other reason in the interests of justice why it should be heard.¹⁰ Accordingly, the decision provides important guidance on the application of section 21M, but does not displace the Hangzhou court’s determination of the substantive issues concerning the trusts and ownership of the assets.

III. Court’s Analysis

(A) Nature and the Applicable Standard of the Section 21M Preservation Order

The first issue to be determined was whether the relief sought by the plaintiffs under section 21M was, in substance, a traditional Mareva injunction. The judge observed that a Mareva injunction may restrain a defendant from disposing of or dealing with assets over which the plaintiff asserts no proprietary claim, and therefore has a more extensive effect than a preservation order directed at specific assets in dispute. It is this broader effect that warrants the application of a higher threshold to Mareva injunctions.¹¹ A traditional Mareva injunction is principally designed to prevent a defendant from dissipating general assets so as to frustrate the enforcement of a future monetary judgment. As summarised by the Privy Council in Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24, an applicant will ordinarily be required to establish: (i) a good arguable case, for a judgment or order for the payment of a sum of money that is or will be enforceable through the process of the court; (ii) that the respondent holds assets against which the judgment may be enforced, and (iii) a real risk that, unless the injunction is granted, the respondent will deal with such assets otherwise than in the ordinary course of business.¹²

The interim relief available under section 21M¹³, however, is not confined to Mareva relief. There is an essential distinction between a Mareva injunction and a preservation order. As observed in Narian Samtani v Chandersen Tikamdas Samtani [2012] 4 HKLRD 872, the former restrains the defendant from disposing of assets over which the plaintiff asserts no proprietary claim, to secure satisfaction of a money judgment.¹⁴ The judge held that the latter preserves the specific property that is the subject matter of the dispute.¹⁵ Where proceedings outside Hong Kong may result in an order for specific performance, transfer of property, or other relief directly affecting particular assets, the Hong Kong court may preserve those assets so as to safeguard the practical effectiveness of the eventual judgment.¹⁶ In such circumstances, the order is directed at the specific property that forms the subject matter of the dispute, rather than at the defendant’s general ability to satisfy a judgment. The applicant is therefore not necessarily required to satisfy all of the requirements applicable to a Mareva injunction.

The Hangzhou Proceedings include both monetary claims and a claim seeking performance of the obligations under the Agreement, the latter of which may directly affect the HSBC Account Assets. The Court of Appeal therefore treated the Hong Kong order as one preserving specific assets to which the potential substantive relief was directed. The relevant focus was accordingly whether there were serious issues to be tried in the foreign proceedings, rather than mechanically requiring proof of both a good arguable case and a real risk of dissipation.¹⁷

Applying that approach, the Handwritten Instructions, the Letter of Entrustment and the subsequent Agreement did not enable the Hong Kong court, at the interim stage, to determine that the trusts had been established. They did, however, give rise to genuine issues requiring determination in the Hangzhou Proceedings. Even leaving aside the trust claims, the plaintiffs’ claim for breach of the Agreement and the potential order for specific performance were sufficient to justify preservation of the specific assets.¹⁸ The court could also take into account matters such as the scale of the assets, movements in the account, the extent of disclosure, and whether damages would provide an adequate remedy when assessing whether there was a practical need to preserve the property.¹⁹ The case therefore establishes only that there were issues warranting trial and a sufficient need to preserve the assets; it does not establish that the plaintiffs had already acquired beneficial interests under a trust or that the assets in the account belonged to them.

(B) Failure First to Seek Relief from the Mainland Court Is Not a Bar to Relief

The defendants argued that the plaintiffs should first have sought preservation relief from the Hangzhou court, and that the judge had failed to give sufficient consideration to the relief available in the Mainland proceedings. The Court of Appeal held that the judge had considered the expert evidence concerning whether Mainland courts could grant preservation orders in respect of assets outside their jurisdiction, as well as the plaintiffs’ explanation for not having sought preservation relief in the Mainland. The judge held that, although Mainland courts possess the jurisdiction to issue preservation orders regarding overseas assets, such orders are rarely issued in a matter of practice and policy.²⁰ There was no serious basis for suggesting that the judge’s evaluation of the evidence or factual findings was plainly wrong.²¹

This does not mean that an applicant may disregard the relief potentially available from the court hearing the substantive proceedings. Whether similar relief has already been sought in the foreign court, whether that court can make an effective order in respect of assets located in Hong Kong, whether there is a risk of duplicative relief, and whether orders made in the two jurisdictions may conflict can all remain relevant to the Hong Kong court’s exercise of discretion. However, section 21M does not make a prior application to the foreign court a jurisdictional prerequisite to relief in Hong Kong. Where the key assets are located in Hong Kong and need to be directly restrained by the Hong Kong court, an applicant may seek relief directly under section 21M, provided that the need for such relief and the proposed coordination between the proceedings are properly explained.

(C) Disclosure Orders as Ancillary Measures to Preservation Orders

The defendants argued that disclosure of historical transactions and asset movements since 2 February 2024 overlapped with certain substantive relief sought in the Hangzhou Proceedings and therefore amounted to premature intervention by the Hong Kong court in the merits of the dispute. The Court of Appeal rejected that argument. Section 21N(2) of the High Court Ordinance²² empowers the court to make such ancillary orders as are necessary to ensure the effectiveness of an order granted under section 21M. The fact that the disclosure sought may overlap to some extent with relief sought in the foreign proceedings does not of itself constitute a jurisdictional bar.²³

The preservation order in this case covered not only the assets remaining in the account, but also assets transferred out after the relevant date, together with their substitute or traceable proceeds. Without historical transaction records, it would be difficult for the applicants and the court to identify the whereabouts of the preserved assets or to determine whether the order had been complied with. Accordingly, requiring disclosure of the account balance, transaction counterparties, the whereabouts of transferred assets, and records of asset movements, income and expenditure was directly connected with the enforcement of the preservation order. The Court of Appeal held that there was no proper basis for appellate intervention in the judge’s decision to make the disclosure order.²⁴

That said, the case does not suggest that disclosure under section 21M may be sought without limit. The scope of disclosure should remain proportionate to the assets preserved, the relevant tracing period, and the needs of enforcing the order, and should not be used as a means of obtaining broad discovery unrelated to asset preservation. Applicants should explain how each category of information assists in identifying or tracing assets or monitoring compliance with the order. Respondents, in turn, may propose more targeted and proportionate alternatives by limiting matters such as the relevant period, categories of assets, persons entitled to receive the information, and confidentiality arrangements.

IV. Practical Considerations

(A) Coordinating Substantive Proceedings, Asset Preservation and Enforcement from the Outset

In cross-border wealth disputes, asset investigations should not be deferred until after a favourable judgment on the merits has been obtained. At the outset of the case, parties should identify the relevant accounts, holding companies, trustees, investment managers, asset locations and control relationships, and keep that information updated as investigations and proceedings progress. They should also assess separately the relief available from the court hearing the substantive proceedings, the courts where the assets are located, and the courts of the jurisdictions in which relevant companies are incorporated. For specific assets located in Hong Kong, it is important to consider at an early stage whether the foreign proceedings may result in a judgment enforceable in Hong Kong, and whether that judgment may require payment, delivery of property, performance of an agreement or restoration of specific assets. These distinctions may directly affect the availability of relief under section 21M and the focus of any application.

The form of asset preservation sought should depend on the substantive relief claimed in the foreign proceedings and the assets that may ultimately be affected by the resulting judgment. The relief should not first be characterised generically as a “freezing injunction” and then assessed by reference to the corresponding requirements. Where the foreign proceedings seek to establish rights in, or restore, specific assets held in an account, the application should clearly link the underlying claim, the target assets and the obligations that may arise from the eventual judgment, and explain why preservation of those assets is necessary to prevent the substantive relief from being rendered ineffective. By contrast, where the principal objective is to secure enforcement of a general monetary judgment, the application should be approached on Mareva principles, addressing the existence of a good arguable case, a real risk of dissipation, an appropriate undertaking in damages and the proportionality of the order. This approach helps avoid the application of an incorrect legal threshold and allows the scope, amount and duration of any Hong Kong order to be appropriately tailored.

(B) Preparing Evidence on Procedural Coordination When Applying Directly for Section 21M Relief

An applicant may apply directly to the Hong Kong court for relief under section 21M without first seeking preservation relief from a Mainland court or another court hearing the substantive proceedings. The application materials should nevertheless explain fully how the proceedings in the two jurisdictions are to be coordinated. The evidence should address what interim relief is available from the court hearing the substantive proceedings, whether such relief can effectively control assets located in Hong Kong, why it is necessary to seek relief directly in Hong Kong, and whether orders made in the two jurisdictions may overlap or conflict. Where appropriate, expert evidence on foreign law should be adduced, together with an explanation of whether the Hong Kong proceedings have been, or will be, disclosed to the court hearing the substantive proceedings. The more specifically these matters are addressed, the better placed the Hong Kong court will be to assess the need for its assistance and to address concerns regarding comity, duplicative proceedings and forum shopping.

The terms of the order should also be tailored to the nature of the assets concerned. For a securities portfolio held in a Hong Kong account and requiring ongoing management, the order may specifically prohibit withdrawals, transfers, encumbrances and other acts that would remove assets from the control of the account, rather than imposing a blanket prohibition on all “dealings” or any “reduction in value”. Ordinary investment management, payment of expenses and transactions carried out in compliance with any applicable notice requirements may instead be carved out as exceptions. Applicants should also consider proposing in advance an appropriate monetary cap, specified exceptions, notice mechanisms and periodic reporting arrangements, so that the court can strike an appropriate balance between preserving the assets and allowing the account to continue operating in the ordinary course.

(C) Aligning the Scope of Disclosure with Asset Tracing and Enforcement of the Order

The scope of any disclosure request should be limited to what is necessary for the enforcement of the preservation order and should not be used as a means of conducting a general investigation into the other party’s assets. A more appropriate approach is to identify, by reference to the account or assets already subject to preservation, matters such as the account balance, relevant transaction period, recipients, substitute assets, proceeds and persons exercising control, and to explain how each category of information assists in identifying assets, tracing their movements, verifying compliance with the order or preventing circumvention. Where the preservation order extends to assets transferred after a specified date, the application should also explain the connection between the starting date, the chain of transactions and the property sought to be traced, rather than seeking historical materials merely on the basis that they may be relevant.

The necessity for disclosure and the manner in which disclosure is to be given should be considered together. Applicants may proactively propose limits on the relevant period, restrictions on the use of documents, tiered access arrangements, confidentiality undertakings and appropriate redactions, and may distinguish between core information to be disclosed in the first instance and supplementary information to be sought only if justified by the results of the tracing exercise. Respondents who consider an order to be too broad should likewise do more than raise objections in principle: they should identify specifically which materials are unrelated to the preserved assets, which information is subject to third-party confidentiality obligations, and what narrower alternative could achieve the same enforcement purpose. This approach can both improve the practical enforceability of a disclosure order and demonstrate to the court that the application is not an attempt to use interim proceedings to obtain general evidence in advance of the substantive proceedings.

V. Conclusion

The Jacky Zong case did not resolve the substantive dispute over the ownership of the US$1.8 billion in assets, but it clearly confirms a core function of the Hong Kong courts in cross-border disputes: where a judgment in foreign proceedings may directly affect specific assets located in Hong Kong, section 21M allows the court to preserve those assets without prejudging the parties’ substantive rights, and to order such disclosure as is necessary to ensure the effectiveness of the preservation order. In cross-border family trust and succession disputes, what parties need to plan is not merely how to secure a favourable judgment in a single jurisdiction, but the entire path from substantive claims and control of assets through to ultimate enforcement. The case also serves as a reminder to high-net-worth families that the founder’s intentions, the intended trustee’s acceptance, the actual transfer of assets and the relevant governance arrangements should, wherever possible, be fully documented during the founder’s lifetime. Otherwise, preservation measures in subsequent litigation can do no more than maintain the status quo of the assets; they cannot eliminate the underlying uncertainty as to whether a trust was validly established or to whom the assets ultimately belong.

Footnotes

1. JACKY ZONG, JESSIE JIELI ZONG and JERRY JISHENG ZONG v KELLY FULI ZONG and JIAN HAO VENTURES LIMITED [2026] HKCA 1292 (July 21, 2026) <https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=182998&currpage=T>.

2. References in this article to “the three children of Zong Qinghou” and similar descriptions are based solely on the relationships between the parties as recorded in the Hong Kong judgments, and do not constitute any independent determination as to kinship, succession rights or substantive trust rights.

3. Supra note 1, para. 3.

4. Supra note 1, paras. 3-4.

5. Supra note 1, paras. 4-5, 7.

6. Supra note 1, para. 6.

7. JACKY ZONG, JESSIE JIELI ZONG and JERRY JISHENG ZONG v KELLY FULI ZONG and JIAN HAO VENTURES LIMITED [2025] HKCFI 3355 (August 1, 2025); Supra note 1, paras. 8-9.

8. JACKY ZONG, JESSIE JIELI ZONG and JERRY JISHENG ZONG v KELLY FULI ZONG and JIAN HAO VENTURES LIMITED [2025] HKCFI 4525 (September 26, 2025); Supra note 1, paras. 10-11.

9. Supra note 1, paras. 12, 32-34.

10. Supra note 1, para. 13.

11. Supra note 7, paras. 42-43.

12. See Broad Idea International Ltd v Convoy Collateral Ltd / Convoy Collateral Ltd v Cho Kwai Chee [2021] UKPC 24, paras. 89, 101.

13. High Court Ordinance (Cap. 4)

21M. Interim relief in the absence of substantive proceedings

(1) Without prejudice to section 21L(1), the Court of First Instance may by order appoint a receiver or grant other interim relief in relation to proceedings which—

(a) have been or are to be commenced in a place outside Hong Kong; and

(b) are capable of giving rise to a judgment which may be enforced in Hong Kong under any Ordinance or at common law.

(2) An order under subsection (1) may be made either unconditionally or on such terms and conditions as the Court of First Instance thinks just.

(3) Subsection (1) applies notwithstanding that—

(a) the subject matter of those proceedings would not, apart from this section, give rise to a cause of action over which the Court of First Instance would have jurisdiction; or

(b) the appointment of the receiver or the interim relief sought is not ancillary or incidental to any proceedings in Hong Kong.

(4) The Court of First Instance may refuse an application for appointment of a receiver or interim relief under subsection (1) if, in the opinion of the Court, the fact that the Court has no jurisdiction apart from this section in relation to the subject matter of the proceedings concerned makes it unjust or inconvenient for the Court to grant the application.

(5) The power to make rules of court under section 54 includes power to make rules of court for—

(a) the making of an application for appointment of a receiver or interim relief under subsection (1); and

(b) the service out of the jurisdiction of an application or order for the appointment of a receiver or for interim relief.

(6) Any rules made by virtue of this section may include such incidental, supplementary and consequential provisions as the Rules Committee considers necessary or expedient.

(7) In this section, interim relief includes an interlocutory injunction referred to in section 21L(3).

14. Narian Samtani v Chandersen Tikamdas Samtani [2012] 4 HKLRD 872; Supra note 7, para. 42.

15. Supra note 8, para. 8.

16. Supra note 1, para. 17.

17. Supra note 7, para. 47; Supra note 1, para. 18.

18. Supra note 1, paras. 22-23.

19. Supra note 1, paras. 26-27.

20. Supra note 7, paras. 76, 79.

21. Supra note 1, paras. 19-20.

22. High Court Ordinance (Cap. 4)

21N. Supplementary provisions as to interim relief in the absence of substantive proceedings

(1) In exercising the power under section 21M(1), the Court of First Instance shall have regard to the fact that the power is—

(a) ancillary to proceedings that have been or are to be commenced in a place outside Hong Kong; and

(b) for the purpose of facilitating the process of a court outside Hong Kong that has primary jurisdiction over such proceedings.

(2) The Court of First Instance has the same power to make any incidental order or direction for the purpose of ensuring the effectiveness of an order granted under section 21M as if the order were granted under section 21L in relation to proceedings commenced in Hong Kong.

23. Supra note 1, paras. 28-30.

24. Supra note 1, para. 31.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.