Arbitration for JYJ & SM: Clearing up rumors + explanation
THIS INFORMATION IS BASED ON ARBITRATION LAW IN SOUTH KOREA
First, to clear up some of the rumors:
- A trial result will NOT come after August 10th.
- (Edited for better clarification) The case is NOT postponed in terms of the direction that is being taken. Yes, this does mean there is a delay in getting this sorted out. While the case moves forward with arbitration, I suppose you can consider it postponing the “ending” to this whole thing.
- A trial is one thing, but arbitration is another. The court granted arbitration so there will not be an “official ruling” because the case is now being taken “out of court.”
- There is no verdict date anymore. We will have to wait and see what happens during arbitration.
- August 10th is an arbitration meeting but there is no word on whether the meeting signifies the beginning of the arbitration proceedings.
- The case involves the invalidity of the contract between JYJ and SM.
- The case is between Jaejoong, Yoochun, Junsu and SM entertainment.
Arbitration was granted. What does this mean? What might happen?
Here is a basic explanation:
- SM requested for arbitration (to take the case out of court) on July 11th.
- The court made the decision on July 18 to accept and grant arbitration.
- Both parties, JYJ and SM, must adhere to the court’s decision of arbitration.
- The case is now being taken “Out of court.”
- “Out of court” means that the case or dispute is to be solved / settled privately between JYJ and SM without adjudication / a judge adjudicating the case or dispute. Meaning, without a judge making an official court ruling.
- An arbitration meeting is scheduled for August 10, 2012.
- During arbitration, the proceedings are handled or carried out by an arbitrator or tribunal.
- An arbitrator (an individual) or tribunal (more than one arbitrator) is a neutral third party.
- JYJ and SM do have some say in how many arbitrators (usually 1 or 3) they will have and who their arbitrator will be or who their tribunal will consist of during the proceedings. (Of course, there are procedures that will follow if disagreements come up during the appointing of arbitrators)
- The proceedings will stop if JYJ and SM can settle their dispute or if the claimant withdraws. The proceedings can also be terminated by their agreed decision or if the tribunal or arbitrator no longer consider the proceedings necessary or possible.
- During arbitration, if JYJ and SM can reach a mutual agreement, then their case or dispute will be recognized by the court as “Settled.”
- If JYJ and SM cannot reach an agreement then a new trial process will start so that a judge can make the final ruling. (This is what fans are afraid of because it would mean taking the case back to court and it will drag the ordeal for a significant amount of time)
- If the arbitration proceedings continue and the arbitrator or tribunal reaches a decision, the court would recognize and support it unless sufficient reason can be found to say otherwise.
- Arbitration is usually the choice of businesses because it can provide more privacy. Additionally, the actual agreement and outcome can be contained. For example, if JYJ and SM settle, their agreement can be kept entirely private (confidential) between them as the information would be closed to the public.
- For more information please see this post: CLICK HERE
I hope this helps. I know many fans are confused but this news of arbitration in no way means that the lawsuit or the case is postponed or that we will be getting a final ruling after August 10th. There simply won’t be an official ruling because this case is now being handled through arbitration as an alternative. Its the ending we’re not getting because of this new direction. The case or lawsuit, however, will continue in the sense that JYJ and SM will face arbitration. If all goes well, then maybe they can settle their dispute or a decision can be made that will finally put this whole thing to rest.
As I said before, I honestly don’t know what will happen now. I don’t know how long it will take them to reach an agreement or if they will eventually head back to court if they cannot agree or settle. Nobody knows.
We can only hope for the best for JYJ.
@hellothrice
Insight into JYJ & SM lawsuit from Dongbanger article
*EDITED DUE TO NEW INFORMATION ABOUT ARBITRATION RELEASED:
We now know that arbitration meeting is set up for August 10.
There is no verdict date.
Word out of Korea is the final hearing/announcement of the verdict which was supposed to happen on July 19 2012 has been delayed.
According to translated reports, the reason for the delay is because SM requested a mediation/arbitration meeting.
****(There is no verdict date anymore. Court granted arbitration as an alternative to an official or final court ruling). ****
Some say this is another SM delay tactic, while others think SM is seeking a private solution to prevent having a public court judgment entered against it.
According to a report, both parties “must adhere to the court’s decision once it grants arbitration”. (1)
SM applied for arbitration this last time on July 11 2012. This may suggest that the Court decision is not in SM’s favor and the company is seeking to end the dispute without having a Court ruling against it.
But this isn’t the first time SM has sought arbitration. Previous attempts at arbitration by SM failed, which resulted in the restart of the hearings aimed towards concluding this approx. 3 year case. (2)
Hearings in the case were finally completed and a verdict was expected to be announced July 19, 2012. However, SM is still dragging its feet on this issue.
This problem between JYJ and SM blew up when the guys sought to terminate the ‘exclusive’ part of the contract with SM, which gave SM the ability to have a massive amount of master/slave-like control over not just the professional life but also the personal lives of these young men.
The root cause of this dispute is not really CreBeau or any other outside party. The main conflict between members of JYJ and SM was their ridiculously lopsided contract.
Previous court rulings in this case sided with JYJ that SM’s control amounted to unfair contracting practices. Laws in South Korea have since changed to try to get rid of 13 year slave contracts.
The Korean Fair Trade Commission (KFTC) have previously investigated SM. (3)
Earlier reports already revealed some of the details of the contract between members of JYJ and SM. Its important to remember why this dispute began.
Such lopsided contracts included clauses like receiving no more than 5% of their album sales, and then splitting that 5% among the 5 of them.(4) SM assigned a manager to them. The group couldn’t chose anyone outside of the company to manage them. And of course the manager had a built in obligation to be loyal, first, to SM since he worked for SM.
SM could also decide to transfer all or part of TVXQ’s contract to some other business if they felt like it. Although they could object, there’s no reason why SM couldn’t use that threat as leverage to ensure members would do exactly what SM wanted.
TVXQ (which includes members of JYJ) did not receive any payment at all for appearing on TV shows where they weren’t regular cast members.
IF JYJ were unable to perform their normal activities for personal reasons, presumably like getting sick or family emergencies, their contracts were extended by the amount of time they took off. This must have been one of the reasons why they were sick as dogs and still got on stage to perform.
SM decided what activities they would be involved in and retained the rights to all goods, copyrights, distribution rights, performance rights, karaoke rights and the right to create “second hand goods regarding any compositions, arrangements or lyrics done” by all of TVXQ.
SM was allowed to give any song composed by any member of TVXQ (JYJ) to anybody else without the consent of the members.
Although SM incurred all production fees for an album, they were also contractually obligated to all profits. From the translated report Clause 8 (P.R. and Production Fees):
“3. For the production of albums that is done by ‘A’ and ‘B’, all responsibility including production fees is incurred by ‘A’ and ‘A’ is entitled to all profits or losses.“(4)
A = SM
B = TVXQ
6 months before any termination of the contract, TVXQ are contractually obligated to produce an album.
If SM decides to stop the activities of TVXQ, they want TVXQ to compensate SM… even though it was SM’s decision to stop activities.
In addition, SM had control over the personal lives of each member. If TVXQ were scheduled so tight that the members only had 2 hours of sleep, then so be it.
The members also had to get permission from SM before they could invest in any outside company, which in effect gave SM total control over the little amount of money the members were paid.
And how much compensation did SM seek if TVXQ didn’t complete their obligations? SM wanted 3 TIMES the amount of money they initially invested into the group, PLUS 2 TIMES the “predicted profit” that would have been gained if the contract had not been terminated.
With a contractual setup like this, SM could claim any astronomical amount of investment along with any astronomical amount of “predicted profit”, which would be impossible for anybody to pay. Thus, having the affect of keeping the group with the company.
What was SM’s legal obligations to JYJ? The only obligation they had to the guys was to “maintain the popularity” of TVXQ and to “quickly report the schedule” to them. ….That’s it.
Moreover, apparently they wanted the members to sign away their rights to file a lawsuit if there was ever a dispute. According to the translated contract, in Clause 12 (Disputes and other responsibilities):
“If any misunderstandings occur due to a communication error in the contract, the problem is to be solved in a mutual agreement by ‘A’ and ‘B’ based on trust.”
Based on trust? Seriously?
And lord only knows what else the members had to deal with before they finally left.
Again, its important that we realize just why JYJ is in this legal dispute to begin with. Its not a simple situation nor employee greed. There are some serious legal problems which required a Court’s attention.
Now with SM seeking arbitration… again… we are left to wonder what if any resolution can be made by the two parties alone.
Source mat.: 1, 2, 3, 4, 5
Credit: Dongbanger