[Seocho-dong Legal Story] The 11-Year Journey of Son Heung-min and Jang Ki-young Ending in Catastrophe

[Asia Economy Reporter Kim Hyung-min] Jang Ki-young, CEO of ICM Stella Korea, is considered one of the key figures behind the rise of South Korea's football 'flagship star' Son Heung-min. Having lived in Germany for over 30 years, he supported Son Heung-min and his family in various ways from the time Son settled in Germany in 2008 until he played for the English professional football club Tottenham Hotspur. They were together for a full 11 years until their relationship ended in November 2019. Their relationship was special. In Son Heung-min's essay "Thoughts While Playing Football," CEO Jang appears frequently. There is an anecdote where, regarding an incident when Son had a fistfight with a teammate while playing for Hamburg, CEO Jang encouraged him by saying, "It shouldn't happen twice," but also "Well done." This gave strength to Son Heung-min's shoulders as he faced the European stage, which often involved discrimination and disregard, without being intimidated.

The seemingly eternal 11-year partnership began to crack and is heading toward a disastrous end. ICM Stella Korea, where CEO Jang is based, has filed a lawsuit against Son & Football Limited seeking settlement payments and damages amounting to about 2.7 billion KRW due to contract termination. Son & Football Limited is a company operated by Son Woong-jung, Son Heung-min's father, for the purpose of managing Son Heung-min. The first trial essentially sided with Son & Football Limited. It did not recognize damages but ordered only partial settlement payment of 247 million KRW to ICM Stella Korea. The case is moving to the second trial as ICM Stella Korea appealed.

Son Heung-min Photo by Yonhap News

Reconstruction of the Case Through the Judgment

According to the judgment document of this case, the situation is roughly as follows. At the time of the incident, ICM Stella Korea operated under the trade name Sports United (United). In July 2018, United signed an exclusive agent contract with Son Heung-min and Son & Football. Through this, they secured the authority to handle Son Heung-min's domestic and international advertising contracts, as well as the commercial use or permission of Son Heung-min's portrait rights. Son & Football, which had an exclusive contract with Son Heung-min, delegated authority to United.

About a year later, on June 5, 2019, CEO Jang decided to sell the company to ANU Entertainment, a drama production and management company. As part of this process, he signed a 'stock purchase agreement' to sell his shares. Upon signing, only 49% of the payment was received immediately, with the remaining 51% scheduled for December of the same year. United publicly disclosed this in June 2019, and the CEO was replaced.

Upon learning this, Son Heung-min sent an email to CEO Jang on November 21, 2019, effectively notifying contract termination. He also raised objections to ANU's announcement at a business briefing that used Son Heung-min's image in materials and proceeded with related business without any consultation. The next day, CEO Jang and United sent a formal letter to ANU citing the business briefing as a cause for breach, terminating the stock purchase agreement and claiming damages. Subsequently, they filed a lawsuit claiming losses due to the unilateral termination of the exclusive agent contract by Son Heung-min.

Sports United [Photo by Sports United homepage capture]

Court: "Possibility of Forged Signatures on Contract"... "Trust Broken"

The trial primarily focused on whether the signatures of Son Heung-min and Son Woong-jung on the 'exclusive agent contract' dated July 2018 were forged.

This was a measure to verify the trust relationship between Son Heung-min's side and United. At the same time, it was a factor to determine whether a civil contract was established between the two parties from the outset. If there were no issues with this contract and agreement, the stock purchase agreement might not have been challenged. United had the responsibility to protect the company to ensure that the work related to their so-called 'client' Son Heung-min under the exclusive contract could continue, and the stock purchase agreement could be seen as proceeding for this reason.

Son Heung-min and Son Woong-jung claimed they never signed the contract, while United countered that all parties signed the contract at a meeting in a hotel in Seoul. The court received handwriting expert opinions from two experts recommended by both sides. One of them pointed out the possibility of forgery. Considering that Son Heung-min was busy and someone else might have signed on his behalf, the court concluded, "It appears there was someone who could imitate Son Heung-min's signature." Based on this, the court even suggested that the contract might have been hastily prepared by United around May to June 2019 to secure advertising contracts.

Although the signatures on the contract were suspicious, the court recognized the contract itself as a 'mixed contract' including a mandate or quasi-mandate contract, where the plaintiff provided domestic and international living conveniences to Son Heung-min and his family, and Son Heung-min's side paid 10% of advertising fees as compensation. The court acknowledged the actual support provided as an agent to Son Heung-min's side and considered the invoices showing compensation payments.

However, the court ruled that Son Heung-min's contract termination notice was lawful and that the responsibility for contract breakdown lay with United, thus denying liability for damages. The court recognized that United informed Son Woong-jung about important matters such as stock sales related to the company sale only afterward, and that from Son Heung-min's perspective, it was sufficient reason to suspect that United's sale might prevent him from focusing on his football career.

Based on these judgments, the court excluded contracts led by Son & Football Limited among Son Heung-min's advertising contracts and selected only those recognized as promoted by United, determining a settlement payment of 247 million KRW.

Son Heung-min, Son Woong-jung [Photo by Yonhap News]

Many Points of Contention Remain... Fierce 'Battle' Expected in Second Trial

The second trial promises even fiercer disputes between the parties. Although the first trial verdict has been issued, many contentious issues remain.

First, questions remain as to why Son Woong-jung agreed to the stock purchase agreement between United and ANU. United claimed that Son Woong-jung responded positively to the stock purchase agreement because he expected that with a change in United's CEO, overseas advertising opportunities would increase, helping to cover the shortfall in funds for establishing and operating a football academy through revenue from Son Heung-min's advertising shoots. The court held United responsible for not properly explaining the details to Son Woong-jung and did not further inquire into his intentions.

The extent and manner in which changes in the company's circumstances should be notified to stakeholders may also be judged differently in the second trial. United maintains that the stock purchase agreement is a 'shareholder change' that does not require prior consent from Son Heung-min's side. The contract details were publicly disclosed. However, the first trial separated this from the issue of contract termination, recognizing that the contract was terminated due to trust destruction caused by the stock purchase, not the stock purchase itself.

On November 21, 2019, when Son Heung-min unilaterally notified contract termination, United had only transferred 49% of the shares to ANU, and CEO Jang still held management rights, leaving room for the stock purchase agreement to be canceled. This point will also be contested again. The signatures of Son Heung-min and Son Woong-jung on the exclusive agent contract may be re-examined in the second trial.