[INFO] EXO Chen, Baekhyun, and Xiumin express intention to continue with EXO activities even if their exclusive contracts are terminated.
230602 Rough Papago translation of EXO-CBX’s second legal statement
“This is Lee Jae-hak, a lawyer for Lin, a law firm that acted as legal representatives for Baekhyun, Xiumin, and Chen (Byun Baek-hyun, Kim Min-seok, Kim Jong-dae, hereinafter referred to as “artists”). In the following, the legal representative of this party would like to share the artists’ position on SM Entertainment’s claim on June 1.
1. SM’s claim to intervene in external forces is merely a false fact to evade the essence of artists’ legitimate exercise of rights and further mislead public opinion.
The feelings of the artists who heard the official data of SM, which calls for a third external force, are very miserable. I feel even more miserable because SM’s perspective on artists seems to have been revealed.
Is it the third force again?
Our artists are definitely adults who can think for themselves and take responsibility for their decisions. And it’s an independent thinker and judge. I had doubts for decades, and I had to ask questions that I didn’t dare to bring up when I was a rookie, so I had the courage to be so scared and difficult.
Our artists asked and listened to many people around them what was the right thing to do and how to come up with a wise solution. There were family members and acquaintances around him, seniors and juniors in the music industry, colleagues, and even staff members who worked with us.
Some gave us worried stories, some gave us warm encouragement, and some gave us support and support. I have to ask you again whether all of these people are the third forces, the impure forces, the evil forces.
Our artists are strictly personal, able to judge and act on their own.
The decision to find their rights, such as asking for settlement data, was made by our artists themselves after a long period of thinking and agonizing, not by any means intervening.
Furthermore, SM claims that it has signed or attempted a double contract with our artists, and Baekhyun, Chen, and Xiumin have not signed or attempted any other exclusive contracts other than the existing exclusive contracts currently signed with SM. SM should refrain from making false claims.
SM said it would only allow “reading” without “providing” the settlement data because it was feared to be provided to external forces. However, even if artists receive settlement data and receive advice from their legal representatives as well as other accountants around them, it is a legitimate exercise of their rights. In the exclusive contract, there is no provision that the artist must not show the material provided to the artist to others, and therefore must review it alone. Rather, there is only a clause in the contract that requires artists to review the materials received from SM for 30 days and raise objections if necessary.
SM, which does not even provide settlement data, and party legal representatives and entertainers around them who advise of the unfairness of such a situation. I can’t help but question who is pointing out the fault to whom.
Again, the artist and his legal representative have consistently requested the provision of settlement data, but SM finally refused to do so, resulting in the cancellation of the exclusive contract.
2. The settlement data is supposed to be “provided” under the exclusive contract, so it cannot be considered that the obligation has been fulfilled by “reading.”
The premise of SM’s claim is that SM fulfills its obligations by giving it the opportunity to ‘read’ the settlement data. However, under the exclusive contract, the settlement data is agreed to be ‘provided’. Therefore, it cannot be considered that the obligation has been fulfilled simply by “reading.”
Article 14 (5) of the exclusive contract signed by SM and artists states, “A (SM) shall provide the following settlement data to B (Artist) at the same time as the payment of the settlement amount. Within 30 days of receiving the settlement data, Party B may object to Party A, such as over-estimated expenses or under-estimated income of Party B, and Party A shall faithfully provide the basis for the settlement. Therefore, the data should be 'provided’ rather than 'read’, and the objection period of 30 days is also calculated from the date of 'receiving’ the data. It doesn’t count from the date of 'reading’.
In addition, SM and the artists signed an additional 'agreement’ around 2014, Article 4 stipulated that 'A shall provide evidence when paying the settlement amount under Articles 2 and 3 to B (paragraph 1), and 'A shall provide detailed settlement data to B once every June according to the exclusive contract (paragraph 2). It also stipulated that evidence or detailed settlement data should be 'provided’.
There is a huge difference between "providing” the material and “reading” it, which is difficult to compare in terms of the right to know and protect property rights of artists. In particular, the settlement data is in SM’s control area, and I would like to ask you again how you can check whether the details are correct or not by simply coming and looking. In addition, Article 14 (5) of the exclusive contract gives a 30-day review period from the date of receipt of the data, and the content of the exclusive contract is that the artist sufficiently reviews the data for this 30-day period and raises objections if there is any objection.
It is the settlement data that we agreed to take a close look for 30 days, but asking them to come and see it with their eyes is only a justification for SM’s claim that “we have shown the data, so we have done what we have to do.” And because we could guess what SM meant, we couldn’t compromise by giving up on being “provided” and responding to “reading.”
For this reason, the standard contract announced by the Fair Trade Commission also stipulated that “A will provide settlement data to B at the same time as the settlement payment” and stipulated that “A will provide it.”
Essentially, refusing to provide data while calling for infringement of trade secrets regarding the performance of the artists themselves cannot justify breaking the exclusive contract.
3. Artists and their legal representatives have consistently requested the provision of settlement data. It is the core and substance of the case that SM finally rejected this and reached a notice of termination of the exclusive contract.
SM claims that it was sufficient to “read” the settlement data, but that the artists did not raise any problems with the data before, but suddenly asked for the provision of settlement data when appointing a legal representative, and then suddenly notified the contract to be terminated.
It is the legitimate right of artists to request the provision of settlement data under the exclusive contract. And SM’s claim that “the artists suddenly began to make claims as the legal representative changed” is nothing more than an argument not to exercise their legitimate rights for a long time. Above all, the artists’ claim as if they were swayed by someone and demanded the provision of settlement data is a disregard for the artists’ own high sense of rights and knowledge. During the consultation process, the legal representative confirmed the artists’ high sense of rights and high insight into the realization of the right to know.
And just as the records requested by the content certification remain objectively, the artists and their legal representatives consistently requested the “provide” of settlement data from the beginning. And SM maintained its position that 'reading’ the settlement data is not enough. However, as you saw earlier, SM’s claim was not acceptable to us as it did not meet the exclusive contract, and the positions of both sides were not narrowed, so the artists and their legal representatives ended the exclusive contract according to the precedent.
In other words, the exclusive contract is based on a high degree of trust, and if the agency fails to provide settlement data, the entertainer will not be properly guaranteed the right to review and dispute the profit settlement.
This is the progress between SM and the artists involved in the settlement data, but it is not true to claim that the artist or his legal representative has changed his or her position, distorting and misleading the core and substance of the case.
4. The problem of the long-term exclusive contract period that is unilaterally disadvantageous to artists beyond the minimum reasonable degree
As I already said in today’s first press release, artists have previously signed exclusive contracts with SM for more than 12 to 13 years. This is too different from the standard contract for pop culture artists (singer-centered) announced by the Fair Trade Commission based on the seven-year contract period, and it is unilaterally disadvantageous to artists beyond the minimum reasonable extent.
In addition, SM is trying to claim a minimum contract period of 17 years or 18 years, respectively, by having artists sign a follow-up exclusive contract again, not even enough to sign an exclusive contract for 12 to 13 years as above.
It is pointed out again that such subsequent signing of an exclusive contract constitutes “an act of unfairly using the status of the transaction” in Article 45 (1) 6 of the Monopoly Regulation and Fair Trade Act. In other words, the long-term compulsion using a subsequent exclusive contract is considered to correspond separately to the “compulsory provision of profits” or “unprofitable provision of transaction conditions” in attached Table 2 of the Enforcement Decree of the same Act.
In response, SM argues that when artists signed a follow-up exclusive contract, there was an agent who was a lawyer for a large law firm, but when the agent changed, it is not reasonable to suddenly claim the unfairness of the follow-up exclusive contract.
However, to claim that the appointment of a legal representative is problematic in claiming that an objectively unfair contract is unfair is a blur of the nature of the issue.
Article 5 (1) of the subsequent exclusive contract states, “This contract is… for five years from. However, if the minimum number of albums specified in Article 4 (4) is not released within the same period, the contract period shall be automatically extended until the time of implementation.’ There is no upper limit to the period of automatic extension.
In this way, the clause that the contract period is automatically extended without a cap is clearly a slave contract, and the legal representative pointed out that it is an act of "unfairly exploiting the trading position to deal with the other party,” and the artists agree.
And with more than a year left of the existing exclusive contract, it is not justifiable to “tie” the artists by signing a follow-up exclusive contract without a limit on the period. SM has never paid artists a down payment for subsequent exclusive contracts.
Baekhyun, Xiumin, and Chen are seriously considering filing a complaint with the Fair Trade Commission against the long-term existing exclusive contract and unfair subsequent exclusive contract signing.
5. About EXO’s future activities
Our artists are looking to continue their EXO activities faithfully with other EXO members even if they terminate their exclusive contract with SM. In fact, the artist preemptively suggested a negotiation plan to work with EXO even if Baekhyun, Chen, and Xiumin leave SM.
Apart from solving the legal relationship with SM, the artists are deeply grateful for the great love and support that fans have sent to EXO for a long time. And no matter what form of legal issues are resolved in the future, we will continue to work hard and faithfully as a team called EXO.“
