Court orders Lee Seung-gi's former agency to pay W690m in royalty settlement suit

Singer and actor Lee Seung-gi has effectively prevailed in a lawsuit against his former agency, Hook Entertainment — now operating as Chorokbaem Media — over unpaid music royalties.

According to legal sources, the 20th Civil Division of the Seoul Central District Court ruled Aug. 28 in favor of Lee in his settlement claim against Hook Entertainment, granting a partial victory.

Of the 829.91 million won Lee had sought, the court awarded him 690.87 million won.

Lee filed the suit in February, arguing that Hook Entertainment had continued to collect revenue from his music and recordings even after his exclusive contract was terminated in December 2022, and that he was entitled to a share of those earnings.

Hook Entertainment countered that once the exclusive contract ended, it had no obligation to settle revenue with Lee unless a separate agreement was reached.

The exclusive contract between the two parties contained a clause stating that any revenue generated after the contract's expiration would be settled through a separate agreement.

The court sided with Lee.

It held that the agency bore the obligation to settle payments with Lee even in the absence of a separate settlement agreement.

"By using the definitive expression 'shall settle' rather than a provisional phrase such as 'may settle' in the body of the exclusive contract, the parties made clear that settlement between the plaintiff and the defendant must be carried out when revenue is generated," the court said.

Rejecting Hook Entertainment's argument that a separate agreement was required to trigger any settlement obligation, the court said that interpretation "would allow the defendant to induce an early termination of the contract — including by breaching its own obligations — and then refuse to enter into a settlement agreement, thereby retaining 100 percent of the profits derived from the plaintiff's entertainment activities without any accounting."

The court went on to say that such an outcome "would allow a party that breaches a contract to obtain greater benefits than if it had complied, which is grossly contrary to the principles of good faith and equity."

Meanwhile, Hook Entertainment had filed a separate suit last April claiming it had overpaid Lee in advertising settlement fees and sought repayment, but the court ruled that Hook Entertainment must pay Lee 581 million won ($427,000).