Socks and hosiery manufacturer, Langsha Knitting Co Ltd, claimed that it had previously hired Cheung as their celebrity spokesperson and invested a large sum to package her.
However, Cheung's public image was in tatters after photos of her having sex with Hong Kong singer-actor Edison Chen surfaced.
As a result, the company quickly replaced Cheung with Taiwanese actress Barbie Hsu, but alleged that Cheung's scandal had indirectly led to a decrease in the sales of their products.
It also claimed that the scandal had caused them to suffer immense monetary losses by forcing them to switch spokespersons on short notice.
The firm had actually announced that it would seek compensation from Cheung in October last year but only took action recently after the 30-year-old actress' comeback made headlines.
Langsha Knitting has declined to comment on why it is taking legal action more than six months after the announcement.
This is not the first time Cheung had clashed with the company. She has apparently had a number of legal scuffles with the firm over contract issues and copyright infringement between 2005 and 2009.
Cheung is set to star in a Derek Yee-directed film, her first movie after giving birth to her second son with actor Nicolas Tse, Quintus, in May.
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