HK Court Safeguards Multi-billion Assets Amid Ultra-high Net Worth Family Dispute

Introduction

In the recent case of Jacky Zong and Others v Kelly Fuli Zong and Others [2025] HKCFI 3355, the Hong Kong Court of First Instance has demonstrated its proactive approach to cross-border disputes by granting interim preservation orders over a monumental US$1.8 billion portfolio held in a Hong Kong HSBC account. The dispute erupted following the death of Wahaha Group founder Mr Zong Qinghou, pitting his children against one another over the distribution of these vast assets.

The Plaintiffs successfully obtained these orders to support their case in Hangzhou, China arguing that several key documents demonstrated a clear intention the Defendant was required to establish trusts for their benefit. This ruling is a clarion call to practitioners, affirming Hong Kong's pivotal role as a complementary jurisdiction to the Mainland Chinese courts in complex family and trust matters involving offshore assets.

The family feud at a glance

The dispute involves Mr Zong's children from two relationships. The Plaintiffs – Jacky, Jessie, and Jerry Zong – are his children from his relationship with Madam Du. The 1^st Defendant, Kelly Zong Fuli, is his daughter with his wife, Madam Shi, and the current CEO of the Wahaha Group.

The central asset is a US$1.8 billion investment portfolio held in a Hong Kong HSBC account under Jian Hao Ventures Limited, a BVI company. After Mr Zong's death, Kelly Zong became the sole owner and director of this company.

The Plaintiffs claimed their father intended this wealth to fund three separate offshore family trusts for each of them and their descendants. They relied on three key documents to substantiate their claim:

1. A handwritten instruction from Mr Zong in January 2024, outlining his intention to create the trusts.
2. A disputed Letter of Entrustment (2 February 2024), in which Kelly Zong allegedly agreed to hold the assets and establish the trusts. While Kelly Zong contests the nature and validity of this document.
3. A Family Agreement (14 March 2024), which confirmed the arrangement and detailed the proposed trust structure.

The Plaintiffs alleged that after their father's passing, Kelly Zong failed to follow through on setting up the trusts and even made unauthorized withdrawals from the account. They subsequently filed a lawsuit in the Hangzhou Intermediate People's Court, claiming the assets were held on a constructive trust and that Kelly Zong had breached her fiduciary duties.

The strategic move to Hong Kong

While the core legal question of "who gets what" was being fought in Hangzhou, China, the Plaintiffs took a critical strategic step: they applied to the Hong Kong Court of First Instance. Their goal was not to decide the case, but to ensure that the US$1.8 billion in assets – physically located in Hong Kong – would still be there if and when they won in Mainland court.

They sought two specific orders under the High Court Ordinance:

1. A Mareva injunction to freeze the assets.
2. An ancillary disclosure order to require information about the assets' status and movements

The Hong Kong Court's pragmatic and targeted ruling

The Hong Kong Court granted both orders, but did so with careful precision to balance the needs of both parties.

1. A tailored preservation order: The Court did not impose a blanket freeze that would paralyze the assets. Instead, the preservation order was modified to address the specific circumstances, focusing on assets over which the plaintiffs asserted a proprietary claim. It prohibited dealings that could dissipate the assets (such as withdrawals or encumbrances from the HSBC account) while maintaining the status quo to ensure they remain available pending the Hangzhou court's determination.
2. Shedding light on the assets: The Court also granted a disclosure order. This was crucial for transparency, requiring the defendants to reveal information about the movement and current status of the account assets solely to ensure the effectiveness of the preservation order. This mechanism helps prevent assets from being secretly shifted.

A key aspect of the decision was the Court's emphasis on judicial comity – the respect one court shows to another. The Hong Kong Court made it explicitly clear that its interim measures were not a judgment on the merits of the case. It was not deciding who was right or wrong.

Rather, the Court positioned its relief as a complementary measure. By preserving the status quo of the assets in Hong Kong, it was actively supporting the jurisdiction and effectiveness of the Hangzhou court. It ensured that any final judgment from the Mainland proceedings would be meaningful and enforceable, rather than an empty victory.

Takeaways

The Hong Kong High Court emphasized that its orders for asset preservation and disclosure were not a judgment on the case's merits but a procedural measure to maintain the status quo pending the foreign court's substantive ruling.

The judgment provides valuable clarity for practitioners, confirming that the threshold for such relief is a "serious issue to be tried" under the two-stage test for section 21M applications, and that comity must be balanced with practical necessity. Ultimately, this case solidifies Hong Kong's importance in international enforcement strategies, particularly for disputes involving family wealth and offshore asset structures.

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.