The Final Word?
Author’s note: This is part of a series of posts which details the conflict between HYBE and ADOR, which, due to the change in management, has now been considered as a conflict between HYBE/ADOR & Min Hee Jin/NewJeans. I edited the format of the links for easier accessibility.
Part 1 | Part 2 | Part 3 | Part 4 | Interlude on Stocks | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13
After the announcement of the hiatus of NewJeans, it seems that everything went down towards a stalement of sorts. While ADOR continued to show their faithfulness to the contract by continually releasing media and content during the important days for NewJeans, like their debut anniversary and fans’ day (dubbed as Tokkis’ day, after their official fandom name), all of these came with an ironic, if not completely pathetic, tone. Meanwhile, the members of NewJeans have released personal content through their social media accounts, even sending a message of encouragement to fans but without any promise or commitment to return, knowing that it would be impossible to do so given the current situation.
What was more relevant, however, were the series of court disputes that would finally reach an inevitable and unavoidable decision. In the course of these disputes, not only were fans divided about the rights of NewJeans and the nature of the contract, but also about the time lost for the members to establish themselves in the industry. It has only been two years since their last debut, and no doubt that their music were top-notch in the K-Pop world; however, this situation kept them at bay. More than that, if the courts declared the legitimacy of the contract, then NewJeans will have to either wait for the expiration of the contract (which would be on 2029, four years from now) and pay for its termination.
These are the surrounding circumstances that affected and shaped public opinion in the course of the legal disputes after their announced hiatus. However, the position remains the same for both sides. The legal team of NewJeans and Min Hee Jin sought to appeal the injunction, wanting to show that because of the working relationship existing between the two parties, the contract was already invalidated from the beginning. Meanwhile, HYBE/ADOR insisted on the fact that there was not any breach in the contract at all, and has become compliant to its terms to its last letter. Hence the injunction and all other presuppositions of the contract were validly done and should be recognized.
The first court encounter was on 9 April, in which Min Hee Jin’s legal team put into question the validity of the injunction, which was then decided by the Seoul Central District Court’s Civil Agreement Division 50. On a private hearing, in which only the legal representatives were present, the court decided that there were no legal grounds that prohibit the injunction.
The court handed over this decision on the grounds that the complaint of Min Hee Jin and NewJeans, that is, the “breach of trust” between them and HYBE/ADOR, was not a sufficient reason to declare the injunction as illegal. In turn, the legal team of Min Hee Jin and NewJeans filed another appeal on that same ground for reconsideration, but was dismissed after seven days.
But more than that, HYBE/ADOR sought to not only enforce the injunction but also and more importantly, affirm that the contract is valid. Min Hee Jin’s legal team sought to contest that in a private hearing held on 5 June. And according to reports, the court sat with the two teams and explored the possibility of a settlement; however, Min Hee Jin’s team remained firm with their initial position, emphasizing the “breach of trust” that occurred between NewJeans / Min Hee Jin, and HYBE/ADOR, as well as the impossibility of continuing their activities given the incident. As Min Hee Jin’s legal representative said,
Trust has been irrevocably broken — we’ve crossed a point of no return. I’ll need to discuss it with my clients, but a settlement is unlikely.[1]
Apparently, the court did not arrive at a decision, and re-scheduled another court hearing on 24 July. Just two days after the third year anniversary of NewJeans debut with the release of the music video for “Attention,” the legal representatives of NewJeans filed again a petition regarding the injunction, calling for a review of evidence. However, they asked that those that were gathered unlawfully, given its nature, should not be counted as evidence. They seem to be right, given that despite the rather explicit and direct nature of those evidence, the means for procuring them weren’t lawful and official, and therefore could be left to misinterpretation.
But what were those pieces of evidence that the HYBE/ADOR team considered illegal? They were talking about the KAKAO talk chats in which Min Hee Jin was very explicit with what was supposed to be a takeover, which were initally grounds for her dismissal (officially, Min Hee Jin resigned as CEO of ADOR, and then resigned as Internal Director after having been relegated to that role).
Unfortunately, the court dismissed their claims, saying that what the KAKAO talk chats were acquired in an inappropriate matter, the evidence that the court considered at hand were those that belonged to the domain of public knowledge, particularly to the pronouncements made through press conferences and media appearances. Hence, even if this rule has been upheld, that does not change the substance of the case and the evidence at hand. Moreover, the court also clarified that it was actually Min Hee Jin’s team that actually disclosed information that was now considered public knowledge. Despite that, the decision was still delayed because no settlement has been reached.
The same thing happened at the next session held on 14 August. It was another closed door meeting, and this time two NewJeans members, Minji and Danielle took part on that hearing, but did not appear in front of the media or make public comments on the matter. Unfortunately, no agreement was reached, and there were no details that were disclosed in public regarding the matter.
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After this hearing, however, HYBE appointed a new CEO in the person of Lee Do-Kyong, who previously headed the HYBE IPX division , which in turn managed intellectual property-based aspects of the business such as merchandise and other artist label products. As she replaced Kim Ju-Young, HYBE expected her to develop new talents and managers for the future goals of ADOR, which, at present, is concerned with developing a new boy group.
The same thing happened in another mediation session in September 11, barely a month after the previous one. It lasted for just twenty minutes, and the same thing has been declared by the court. Though it came out as redundant, it was significant because it meant that both parties had to wait for the end of October for the court’s final decision regarding the validity of the contract.
Meanwhile, between this September hearing and the final decision of the court, Min Hee Jin had to face legal battles of her own. On the one hand, she won a defamation lawsuit against eight online users, with each paying around 50000 to 100000 KRW (around 35 to 70 USD); on the other hand, she ended up losing the sexual harassment case filed against her by a HYBE employee (the one whom she referred to in a conversation over KAKAO, a part of which was made public through her Instagram stories). Those circumstances may have affected public opinion, but nothing changed the decision of the court.
The days leading to the final decision, however, didn’t go by quietly or easily. A few days earlier, Korean news outlets reported that HYBE CEO Bang Shi-Hyuk was currently facing charges of stock manipulation, following an investigation that was held as early as July of the same year by the police as requested by the Financial Services Commission of South Korea. What this investigation revealed was that in the year 2020, Bang allegedly manipulated stock investors in the process of establishing HYBE as an Intellectual Property Ownership. Simply put, investors claimed that Bang declared that he had “no plans for [what soon became HYBE] to go public” as he sought investors, only to end up doing so. And because this move ended up with a drastic change in stock value, they claimed that this decision led to extra profits for Bang and his executives.
This has surely put a dent in the reputation of HYBE, even though authorities need to verify these allegations (in fact, Korean news stations reported that the police were authorized to enter the HYBE building and do an exhaustive investigation on the matter, and on 6 November, Bang had to sit for a 13-hour inquest by the police, one which would determine his degree of culpability over this crime).
This incident, however, did not affect the case in any manner, and finally, on 30 October, the decision was definitively granted by the Seoul court. According to them, the dismissal of Min and the supposed “failure” of HYBE/ADOR to protect the members of NewJeans weren’t enough reasons to annul the contract and its terms. According to the court, it was “difficult to conclude” that the contract’s terms were violated upon Min’s dismissal, for the “managerial vacuum” did not substantially hinder ADOR from fulfilling its contract obligations. Moreover, the other circumstances that surrounded the matter, such as, for example, the alleged bullying case against Hanni and the other members by the management groups of other bands within HYBE, had the same status. In sum, all of these weren’t enough for the contract to be considered violated.
In this regard, then, the contract remains valid between HYBE/ADOR, and both parties are obligated to fulfill its terms until it reaches its very end. Basically, it means that if members of NewJeans are going to stick with Min Hee Jin and remain within their original position, they will have to wait until the contract’s expiry in 2029 before they could relaunch their careers as idols. Meanwhile, HYBE/ADOR would also have to wait for that year in order to end their obligation with their artists, granting everything that was according to the contract as well as promoting content and material until then. In the end, it was a lose-lose affair, and it appears that members of NewJeans will lose in this regard.
Following this decision, ADOR immediately released a statement, which is quoted below.
Today, the court ruled that the exclusive contracts between our company and our artists NewJeans remain valid in the exclusive contract validity lawsuit.
The court determined that our company did not violate any obligations as a management agency and that any attempt to break away from the exclusive contracts by citing a breakdown in trust should not be permitted.
We are deeply grateful for the court’s decision.
Since the artists claimed termination of the exclusive contracts in November last year, we have been watching the series of processes — the main lawsuit to confirm the validity of the exclusive contracts, the injunction application to prevent confusion until the main judgment is issued, the court’s decision to grant the injunction, the artists’ immediate appeal, and the decision to dismiss it — with a heavy heart and have responded carefully throughout.
For nearly a year, the court has consistently ruled in multiple related cases that our company holds the position of management agency under the exclusive contracts and that the artists are to carry out entertainment activities with us.
We sincerely hope that today’s result, which once again affirms the same conclusion after a long period of examining various claims and facts, will serve as an opportunity for the artists to calmly reconsider this matter.
We, too, will once again reaffirm our role and responsibilities as a management agency under the exclusive contracts. As stated during the trial, we have completed preparations for future activities including the release of a full-length album and are ready to proceed. Through discussions with the artists, we will do our utmost to return to fans as soon as possible.[2]
According to the legal team of NewJeans, they were prepared to file an appeal and have this decision reconsidered. But while the public was following this, there came an interesting turn of events that would close this long controversy, a response that was totally unexpected after a year long dispute between these two parties.
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[1] This has been quoted by Korea Joong Ang Daily
[2] Message translated and published by Soompi
