Hanbyol Law LLC Our lawyers summarized the issues in a dispute over the royalties of a pharmacy in Seoul Central District Court 2021 Gahap 559673. The court recognized the landlord's liability for obstructing the opportunity to recover the royalties under Article 10(4) of the Commercial Building Lease Protection Act, and confirmed that the landlord can be held liable without the need for an arrangement procedure if the landlord has clearly indicated its intention to refuse, as the Supreme Court ruled on July 4, 2019 (2018 Da284226), explained Hanbyol.

In calculating the damages, Hanbyol pointed out that the court used the appraisal right (approximately 350 million won) as a benchmark, distinguished between the tenant's business value and the location benefit, which are components of the right, and reduced the location benefit as the landlord's contribution based on the principle of equity. As a result, the court ultimately awarded only KRW 170,631,855 out of the promised KRW 400 million, and recommended that, as it is difficult to guarantee the full amount in a rights payment dispute, it is necessary to protect rights by documenting the lease termination and rights payment negotiation process and promptly seeking legal assistance.