1. The global legal market is intensely competitive, and Hong Kong is no exception. Against the backdrop of a growing number of practitioners and the increasing commoditisation of services driven by AI technology, lawyers who remain confined to the approach of taking the easy way out are inevitably drawn into a self‑defeating race to the bottom.

2. Sustainable competitive advantage requires a shift in mindset — from process-following technician to strategic problem‑solver. Lawyers who provide clear insight and effective strategy create real value. Competing solely on cost benefits no one.

3. We thought we would illustrate the point with a recent matter handled by us, as below.

Case Background and the Client’s Objectives

4. The client, a Hong Kong‑operated fund group, subscribed to short‑term structured financial products issued by a Labuan‑incorporated investment bank (the Bank).

5. The Bank failed to honour its redemption obligation upon maturity of the products worth circa USD60 million, inclusive of circa USD14 million of accrued interest. The client in turn instructed us to take legal action with two objectives in the alternative: (i) to strive for expeditious recovery; (ii) to otherwise account to its investors.

Action Plan

6. It is trite in many common law jurisdictions that where the debt is clear and the debtor lacks a bona fide defence on substantial grounds, the creditor may commence winding up proceedings without having to embark on conventional civil litigation as a prerequisite. This “straight to the lair” approach necessarily attracts public attention, particularly from the business and financial communities in which the debtor company operates, and exerts significant pressure on the debtor company if it wishes to remain a going concern. In practice, it often results in early settlement, quicker recovery, and reduced legal costs.

7. Given that Hong Kong and Malaysia, both being common law jurisdictions, share broadly similar legal principles for insolvency matters, we advised the client to proceed directly with winding‑up proceedings. This way, incidentally, the client could sidestep the long and often costly journey of civil litigation towards getting a judgment debt via a writ action.

8. In parallel, with a view to exerting dual pressure on the Bank, we had the client lodged a complaint with the Labuan Financial Services Authority relative to the Bank’s outstanding indebtedness, thereby triggering the authority’s regulatory powers to apply for the Bank to be wound up.

Result-oriented Execution of Action Plan

Choice of Local Lawyers

9. When assisting the client in its local counsel selection, we conducted in‑depth background research, canvassed peer recommendations, and carried out multiple rounds of interviews and assessments with several Malaysian candidates. During this process, it is observed that the prevalent low fee level in Malaysia may have a bearing on strategy formulation, with local practitioners tending to adopt a more orthodox or simply “follow‑the‑routine” approach in the conduct of court businesses. In perspective, amongst the Malaysian lawyers we interviewed, there is a general reluctance to take the “straight to the lair” approach even for clear-cut debt scenario like the present case, as most of them prefer the “safe” mode of filing a writ claim in civil litigation towards getting a judgment debt en route to commencing winding-up proceedings.

10. Anyhow, the client went with an incumbent Malaysian law firm which charges relatively modest fees to kick start the winding-up proceedings.

Going the Extra Mile v Looking for the Easy Win

11. In mid 2024, the client through the incumbent law firm issued a statutory notice requiring the Bank to pay up within 21 days as a prelude to commencing winding‑up proceedings.

12. Shortly before the expiry of the 21-day notice, the Bank applied for a Fortuna injunction from the Malaysian High Court to enjoin the client’s filing of winding-up petition. The application was premised upon certain factual allegations made under oath for arguing that the financial products in question had not matured.

13. The affidavit evidence produced by the Bank for making the factual argument is simply shady, and the argument is obviously designed to portray the false narrative that the “factual dispute” warranted the judicial fact-finding procedures of a writ action as opposed to the “straight-to-the-lair” nature of the winding-up proceedings. Further and importantly, the financial products aside, it is undisputed that the Bank had failed to pay the accrued interest on the financial products, the amount of which (viz. circa USD14 million) per se already far exceeded the entry threshold for winding up.

14. That being so, the presence of the “factual dispute” as raised by the Bank apparently presented a problem to the client’s incumbent Malaysian lawyers as they were quick to advise the client not to contest the Fortuna and instead to re-route the matter to the very time-consuming civil litigation by way of a writ action (for getting a judgment debt before commencing enforcement proceedings).

15. In light of the foregoing, on our advice, the client engaged a replacement firm of Malaysian counsel with recent track records in resisting Fortuna applications to implement our “straight-to-the-lair” action plan under our auspices. Apart from the supervisory role, we actively engaged in all non-advocacy aspects of the ensuing proceedings, including the preparation of affidavit evidence and written submissions for the winding-up proceedings as well as the legalisation of affidavits in Hong Kong for use in Malaysia. In the process, we took a hands-on approach, including attending all virtual hearings remotely as the instructing solicitors, in order to maintain real-time oversight and ensure strategic compliance.

16. Eventually, with abundance of resilience and diligence, we alongside our able Malaysian advocates succeeded in persuading the Malaysian High Court to dismiss the Bank’s Fortuna application. Notably, in his rulings, the learned High Court judge did not subscribe to the Bank’s technical argument that a monetary judgment should be in place before the Court’s winding‑up jurisdiction could be invoked. The Bank’s subsequent appellate applications, including for a stay of proceedings and an interim Fortuna pending appeal to the Malaysian Court of Appeal, were likewise dismissed.

17. Came mid 2025, in line with the client’s objectives, we successfully assisted the client to have the Bank wound up by the Malaysian High Court. As a finale discharge of duties, we put in place a reputable firm of private liquidators (in lieu of the governmental Official Receiver) to undertake the ensuing tasks of asset tracing and, to that end, provided them with our recovery-oriented investigation work products about the Bank and its officers.

Takeaway for the Client

18. The foregoing example illustrates two different approaches of lawyering: one that employs an outside‑the‑box methodology coupled with a readiness to go the extra mile towards achieving the client’s objectives, and another that looks for the easy win on an operationally convenient path of least resistance, often the undesirable yet natural result of cutthroat pricing practices. In the grand scheme of things, as demonstrated, the former is evidently preferable for the client as not only has it realised the client’s objectives, but also achieved overall saving of costs.