Sure Fast Enterprises Limited v China Environmental Technology Holdings Limited 

[2026] HKCFI 1893, P subscribed to convertible bonds (CBs) issued by D for 3 years with a principal amount of USD 7 million. The CBs (and all related agreements) are governed by Hong Kong law.

Pursuant to the Subscription Agreement, the parties originally agreed that the bond consideration would be received in a Hong Kong escrow account. The parties later agreed (by a Side Letter Agreement) that part of the bond consideration would be paid in RMB (equivalent to USD 5.5 million) (RMB Consideration) by P through an agent in the Mainland. On maturity, D would redeem the CBs by paying USD to P in Hong Kong.

P paid the RMB Consideration and completed its subscription to the CBs. D subsequently claimed that the CBs breached Mainland Forex Laws and are unenforceable, because P paid the RMB Consideration through a Mainland agent and would receive USD in Hong Kong upon maturity of the CBs.

After a 6-day trial, DHCJ Richard Khaw SC declared the CBs valid and enforceable. The Court held in particular that:

, instructed by King & Wood Mallesons, acted for the Plaintiff.

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Enforceability of Hong Kong law governed convertible bonds where bond consideration paid in breach of Mainland Forex Laws

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