When the members of a K-pop idol group affiliated with a Korean entertainment agency (the “Agency”) unilaterally claimed the termination of their exclusive agreement, the Agency filed a lawsuit against the group members, seeking (i) to confirm the validity of the exclusive agreement, and (ii) a preliminary injunction to prohibit the members from engaging in independent commercial activities and preserve the Agency’s status as their representative. Kim & Chang represented the Agency and obtained favorable court decisions on both claims.
This case involved a complex set of issues spanning over several years, starting when the members signed their trainee contracts with another label and then signed exclusive agreements with the Agency after its establishment in 2021. In 2022, the members debuted and immediately obtained commercial success. However, in April 2024, a dispute arose between the CEO of the Agency and its parent company, which ultimately led to the members’ unilateral notice to terminate their agreements in November 2024.
Based on a thorough analysis of all relevant materials, we advocated on behalf of the Agency, explaining that it had fully performed its obligations under the exclusive agreements and that the grounds for termination asserted by the members were insufficient to terminate the agreements. We also appealed to the court that allowing artists to easily and unilaterally terminate exclusive agreements without adhering to the exclusivity period would negatively affect the K-pop industry as a whole. The court found our arguments compelling and granted the Agency’s petition for preliminary injunction on March 21, 2025 in its entirety (the injunction decision became final after the court dismissed the group’s petition for objection and appeal). Thereafter, on October 30, 2025, the court ruled in favor of the Agency in the main action seeking confirmation of the validity of the exclusive agreement, accepting all of the Agency’s claims. On November 12, 2025, the members declared their reinstatement to the Agency. Their decision not to appeal the judgment on the merits made the ruling final and conclusive.
The rapid growth and increasing investments in the Korean entertainment industry underscore the critical importance of adhering to the exclusivity periods stipulated in exclusive agreements. Disputes are now more intricate, often having a significant impact on the parties involved and warranting the development of new legal principles. This case stands out as the most recent judicial ruling to tackle complex termination issues and provides practical guidance on applying the Supreme Court’s established principle of “termination due to a breakdown of trust.”
This case is significant because the court also established that a breakdown of trust sufficient to terminate an exclusive agreement cannot be established by idol group members’ unilateral assertion, absent definitive finding of the Agency committing a violation of the agreement. The court also ruled that the members’ attempt to exercise decision-making authority over matters requiring business judgment is unreasonable and not a valid ground for contract termination.
