2014 May, EXO's Kris followed Hangeng's path, and handed an application of "Application to Clarify Invalidity of Exclusive Contract" to the court on the 15th this month, stating unfairly termed contract as the reason. Kris has left EXO as of now, leaving the remaining 11 members to follow through their upcoming schedules.
We have to note that "Application to Clarify Invalidity of Exclusive Contract", such cases, both Hangeng and Kris, why did they chose to leave SM through this? Normally, in situations whereby one wants to request to terminate a contract, they would choose to file it under "Declaration of Invalidity of Exclusive Contract".
In order to satisfy everyone's curiosity, Dispatch is releasing this QNA today, and have consulted lawyers specializing in the entertainment department regarding the significance of this lawsuit, and the direction it will take, and interviewed representatives from the singing industry, including the future paths Kris and SM will take.
▷Legal representatives: Sun Jongmun, Lee Jaeman, Kim Kyeonghwan, Kim Byungjun. Representatives from the singing industry requested to remain anonymous.
◆Why did Kris choose to file "Application to Clarify Invalidity of Exclusive Contract" this time? Some fans find "changing contracts" easier to accept than "leaving the team". Because if he was to really leave EXO, it seems that ""Declaration of Invalidity of Exclusive Contract" would make more sense. Is this really the case? We can take a look at Hangeng's case, he who also chose "Application to Clarify Invalidity of Exclusive Contract", left SJ in the end.
Q. What does Kris's "Application to Clarify Invalidity of Exclusive Contract" mean?
D. It means the party wants to clarify whatever that is on the contract once more, and he wants the court to re-acknowledge the validity of the contract, ie, before confirming the validity of the contract, he would temporarily not acknowledge whatever that is stated in the contract. Most artistes file such applications with "too many schedules" and "unpaid wages" as the backing up reasons.
Q. Many fans pointed out that this is ultimately not "Declaration of Invalidity of Exclusive Contract", and hence are still hopeful.
D. Both cases will nullify the contract in a way, they are similar in the sense that they wish to point out that something in the contract is invalid/illegal, but the focus is a little different. "Application to Clarify Invalidity of Exclusive Contract" will try to target a particular timing, and it has to be after this timing that the contract will be nullified.
Q. Specify a particular timing?
D. Let's say the party submits this on 2014 Mar 4, to be put simply, he acknowledges the contract before Mar 4, but after the 4th, he no longer accepts the contract. And he requests for the court to clarify if the contract is still valid. Kris, after setting this timing, the problems that may be brought up thereafter are still unknown.
Q. If he wishes to terminate the contract, isn't "Declaration of Invalidity of Exclusive Contract" more effective?
D. "Declaration of Invalidity of Exclusive Contract" would mean that the contract is not acknowledged by the party right from the beginning. That is, he has to find and point out the clause that he thinks the company has not done/has done differently from promised, which is very difficult to get proven. There are very few successful cases in real life. One has to prove the following occurrences in order to succeed: Making use of the party (who filed the lawsuit)'s carelessness, financial situations, and inexperience through physically violent acts (Civil Code104), signing contract with another party his behalf (Civil Code107), threatening the party in order to gain benefits (Civil Code108) etc.
Q. So what's good about filing under "Application to Clarify Invalidity of Exclusive Contract"?
D. Suppose SM and Kris had a standard contract, Kris will be able to win the lawsuit with just one part of the contract being proven against reality. Let's say, if like what Kris said about pushing for excessively busy schedule is true, that could become illegal. Except that, the judge needs proof of this.
Q. This is similar to Hangeng's case.
D. Hangeng submitted a "Application to Clarify Invalidity of Exclusive Contract" back then, and the court accepted his case then, due to his excessively long contract term. His contract term was 13 years (2005-2018), and according to the "Pop Culture Artist Standard Contract Form", using actors as an example, the contracts won't be longer than 7 years, and singers can choose to accept 7 years + @, ie after 7 years the signer will have the right to choose when the contract ends.
Q. So do you think Kris will share the same fate as Hangeng?
D. Not really. Kris's situation is different from that of Hangeng, when Hangeng signed his contract in 2003, there were no such thing as "Standard Contract"s, so his contract had unfair clauses like long contract term. But as for Kris, SM has started to use "Standard Contract" from 2010 December, and hence his contract will definitely follow the "Standard Contract", and there is a slim chance of the contract content having illegal clauses.
Q. Over on Kris's side, they claim that SM requested excessive schedules from him?
D. This is rather difficult to judge, because we don't understand the reason behind their discord. It is not possible for every company to follow the contract 100%, ie there is a possibility for things to go against what has been stated in the contract, if Kris manages to prove that, he might win the lawsuit.
Q. If Kris's application got accepted, how would the money matters be solved?
D. Since it is an "Application to Clarify Invalidity of Exclusive Contract", the contract before this application is submitted is acknowledged, so Kris need not return his earning from his previous activities to SM, and if this was "Declaration of Invalidity of Exclusive Contract" things would have been different, because it would mean that the contract is invalid from the start, and Kris and SM would have to redo their money matters.
Q. On the contrast, if Kris loses, can SM ask for a monetary compensation?
D. Definitely. If SM did not go against the contract, Kris's contract will still be valid, and SM can hold Kris accountable for whatever financial and psychological losses incurred from, for example, disappearing without legit reasons and acting on his own. But usually the price to pay will be through tangible work, and there will less likely be another lawsuit.
Q. Is it possible that Kris only wants to change the contract details?
D. This is not very likely. If he wishes to edit the contract details, they would normally discuss with the company only. There will be no such things as coming up with a court case like this, and involving the court. Even if the negotiation didn't go well, they probably will not end it off with a lawsuit.
Q. What will be the upcoming steps and lawsuit duration be like?
D. It will take about 6 months for the court to make a judgement, except that, if there is to be any changes, it might take even longer than that. If Kris was to win, contract will be terminated and he can start his solo activities. Conversely, if SM wins, the contract continues to be valid.
◆ Hangeng and Kris, this is already the second time a Chinese member brings up a lawsuit. Kris files under the reasons of "unfair treatment, forced schedules, financial problems". Will this cause a butterfly effect and lead to another case of a next Chinese member leaving? Regarding this, we have consulted representatives from the signing industry, most of them have plead to not disclose their names
Q. What is Kris unhappy with?
D. I have heard about three reasons. First being inappropriate treatment, being treated as an object instead of himself, being controlled and managed. Second being the schedules that were set for him. SM, allegedly set the schedules without his agreement forcefully, without considering his health condition. Last of all, it is the issue about earnings. It is said that SM only provided the total pay without any details and breakdowns of earnings.
Q. SM sees Kris as someone to control?
D. For a rookie idol, this is something unavoidable, it is the same situation in every company. Idols are mainly teens in their 10-20s, an age range whereby they are not experienced in self-managing. Idols sell their images, and thus have to be limited and controlled to a certain extent. Especially after the recent Sewol incident, the restrictions became even stricter. It can't be help to feel unsatisfied and unhappy with the limitations, but this is something expected if you want to be an idol.
Q. Kris is a Chinese, will there be any cultural differences and conflicts with the Korean members?
D. Kris is a member of EXO-M, with 4 out of 6 members being Chinese. Won't the Korean members in M feel more out of place instead? Their main activities are in China as well, so it will be the Korean members experiencing a greater impact from cultural difference. If the other Chinese members didn't bring this up, it seems like this problem doesn't really exist.
Q. What do you mean by forced schedules going against his own wishes or health condition?
D. Usually, a singer's schedule is set 1-2 months beforehand. For rookie artistes, most of it is set by the company. Of course they will inform the singers of the format of the schedule/activities. But, health condition isn't something to be predicted beforehand. No one will know the health condition a month before the schedule and then decide whether to go for it on the day itself, i.e. there will be a problem if they are requested to appear on a show on a day when they are down with a bad flu, and this needs to be resolved between two parties.
Q. Kris claims that SM decides on all the schedules single-handedly?
D. This is something that all newbies have to go through, EXO is a group that has debuted for two years, that has just removed their rookie group title, but realistically rookies do not have sufficient ability to decide on an event's importance. On the other hand, they can sue the company for not controlling the new artistes well enough, as rookie artistes are supposed to receive guidance in the beginning and slowly after a period of time, most of their schedules can be decided after a discussion between two parties.
Q. He brought up the problem of calculations of earnings, pointing out that the details are not revealed to him.
D. SM does two calculations of earnings a year, and will meet with the related singers and management team. Some singers have their parents to verify the content, while smaller enterprises will just vaguely come up with a figure, bigger companies will explain to their singers. As for the Big 3, there is almost 100% transparency.
Q. Kris expresses discontent with the earnings.
D. There is a training system in this industry, to let the trainees develop and then become singers. And this process will exhaust billions of Won of investment, with the companies absorbing the expenses and risks. As for EXO, they have accepted years of training, and the public reception when they debuted did not meet expectations, a significant rise in earning is only after the release of Growl, hence there can be a difference in Kris's expected pay and the one he has received.
Q. Is there really someone backing up this in China?
D. China has shown strong interest in EXO, TVXQ, BIG BANG, SUPER JUNIOR AND 2PM, especially with China putting in large amount of capital in attracting them over for development, it is true that looking at this from a singer's perspective, they will indeed make more money if they were to go solo. It's the same for Hangeng's case, suddenly bringing up a lawsuit when Super Junior was at their peak.
Q. There's still other Chinese members. Will this cause a ripple effect of them leaving the group as well?
D. The possibility is small. First of all, the members did not participate in the lawsuit together with Kris, and did not express similar discontent. Chinese member Tao even stated "Without us knowing, you did not return, keeping this from the company and us", signalling the low chances of a series of members leaving the group.
Q. Missing Kris, will there be any problems with EXO-M's activities?
D. As of now, EXO's concert and EXO-M's activities have to continue without Kris, it is unavoidable that this difference has to exist, but EXO's position will not have any major changes because of this. In EXO-M, Luhan and Xiumin's popularity are notable. Kris's absence, though may lead to short term disadvantages, will not have any impacts in the long run.
Q. How will this lawsuit conclude itself?
D. SM expressed that they will do their best to ensure that EXO will be able to continue with their activities, but as Kris has decided to do this through a legal portal, it is very difficult for them to compromise. Seems like this will end up like Hangeng's case, with Kris finding his path in China, and SM might come up with a Plan B to fill Kris's spot in the group.
*Translator note: Sorry for any mistranslations, this is a long post and some of the exact meanings might have been lost during the kor-chi-eng trans process.
kor-chi trans: @dada_onlyDO
chi-eng trans: @exonyeoshidae
OP: Thought this was a good read that puts things in somewhat clearer terms. Of course it's still speculative, and also keep in mind these are Korean lawyers and Korean singing industry reps who are voicing their opinions on the case, so they may be putting a different spin on things than perhaps someone from China would.