Corporate Injunctions After Leong Ma Li: Drafting Precision and Contempt Risk in Hong Kong Company Disputes

A practical update on injunctions, contempt risk and litigation discipline in Hong Kong company and shareholder disputes.

Editorial note: This article uses High Fashion New Media Corp Ltd v Leong Ma Li [2026] HKCFA 18 as the principal case study. The broader references to shareholder and boardroom disputes are commentary context, not statements of additional holdings by the Court of Final Appeal.

Introduction

In Hong Kong corporate litigation, urgent injunctive relief is often the first battleground. In company and shareholder disputes, parties may seek orders to preserve control, regulate the operation of company bank accounts, maintain signing protocols, restrain dealings with assets or prevent steps said to be oppressive or improper. The injunction is therefore not merely procedural. It may shape the commercial reality long before trial.

The Court of Final Appeal decision in High Fashion New Media Corp Ltd v Leong Ma Li [2026] HKCFA 18 makes the drafting and enforcement of such orders a topical issue. The decision does not dilute the importance of compliance with court orders. Rather, it clarifies the proper basis on which a party may be held liable in contempt for acts done by another person, and underlines the need for clear drafting where positive obligations are intended.

1. The issue: when does another person’s act become the respondent’s breach?

Corporate injunctions often operate in a factual setting where authority and control are fluid. A director may cease to be involved in daily operations. A financial controller may remain in place. Company chops, personal seals and bank mandates may not immediately reflect the practical change in management. Those facts matter when the question is whether a respondent should be treated as responsible for another person’s conduct.

Leong Ma Li is significant because it distinguishes between conduct properly attributable to the respondent and independent conduct by another person. The Court identified two different bases for analysis: the Imputation Basis and the Implied Term Basis. That distinction is important because contempt is a serious jurisdiction. The Court will look carefully at the wording of the order, the scope of authority, and the extent of control before treating a third party’s act as the respondent’s breach.

2. Contempt is not a substitute for careful drafting

The most practical lesson for applicants is that contempt proceedings cannot cure imprecision in the original order. If the intended order is only prohibitory, it should be drafted as such. If the applicant needs the respondent to take positive steps — for example, to notify staff, preserve a signing protocol, give instructions to bankers, secure company chops or prevent persons under their control from dealing with assets — those obligations should be set out in clear terms.

This matters particularly in company disputes where the relevant conduct may be carried out by employees, company officers, nominees, service providers or group entities. General words such as “servants or agents” may not be enough if the real concern is that the respondent should actively supervise or prevent a particular form of conduct by others. A respondent should be able to understand, from the face of the order, what must be done and what must not be done.

3. The “vicarious liability” label should be avoided

One of the clearest messages from the judgment is that “vicarious liability” is not the right label for breach of a court order. Liability for contempt is concerned with the respondent’s own acts or omissions. Depending on the terms and construction of the order, that may include an omission to take steps to prevent others from doing acts which would amount to a breach if done by the respondent. But the liability remains the respondent’s liability for his or her own conduct, not liability for another person’s wrong as such.

That distinction is more than semantic. In a corporate setting, it prevents the contempt jurisdiction from being extended too loosely merely because a company employee, officer or financial controller performs an act connected with the order. The question is whether the third party was acting within the respondent’s actual authority or control, or whether the order itself imposed a positive obligation which the respondent failed to perform.

4. Dormant injunctions: the action still matters

The judgment also contains an important warning about the use of interlocutory injunctions over time. The Court did not decide the appeal by allowing a collateral attack on the validity of the injunction. Indeed, the judgment confirms the orthodox position that court orders must be obeyed unless and until they are set aside. A party cannot simply ignore an order because it considers the order to be irregular or vulnerable.

However, the observations on the long period of non-prosecution are still important. Where a plaintiff obtains interlocutory injunctive relief, it should progress the substantive action. An interim order should not become a substitute for trial or a form of permanent commercial leverage. Where circumstances have materially changed, or where the underlying proceedings have not been progressed, the proper course is to seek appropriate relief from the Court rather than to treat the issue as a defence to non-compliance.

5. Practical implications for Hong Kong corporate litigants

FOR APPLICANTS FOR RESPONDENTS
Identify precisely who is to be restrained and whether the order must extend to agents, employees or controlled entities. Read the order literally and promptly identify any ambiguity, operational difficulty or change in control.
Draft positive obligations expressly if the respondent is expected to take preventive steps. Document steps taken to comply, including instructions to staff, bankers, agents or company officers where relevant.
Do not rely on contempt proceedings to fill gaps in the order. If the obligation is unclear or no longer workable, seek clarification, variation or discharge rather than taking unilateral risks.
Progress the substantive action; interim relief should remain ancillary to the underlying dispute. Review long-standing injunctions where the factual matrix has changed or the plaintiff has not progressed the proceedings.
In company disputes, align the order with the articles, statutory remedies and the practical mechanics of control. Where leaving management, record the handover of seals, mandates, signing authority and operational responsibility.

Conclusion

Leong Ma Li is a useful reminder that corporate injunctions are only as effective as their wording and as durable as the proceedings that support them. In company and shareholder disputes, the commercial temptation is to seek broad language that captures every possible contingency. The litigation discipline is different: the order must be clear enough to be obeyed, enforced and, if necessary, supported by contempt proceedings.

For Hong Kong practitioners, the decision encourages a more careful front-end approach. Applicants should draft with the company’s actual control structure in mind. Respondents should treat compliance as a documentary exercise, particularly where management, signing authority or operational responsibility changes. Both sides should remember that interim relief remains ancillary to the substantive dispute.

The broader message is practical. Corporate litigation is increasingly fought through urgent applications and control-preserving orders before trial. In that environment, precision is not stylistic. It is strategic.