CJ CGV ordered to pay 15.3 billion won in lease damages

A South Korean court has ordered CJ CGV to pay approximately 15.3 billion won in damages to the Industrial Bank of Korea (IBK) following the early termination of a lease for a cinema in Incheon.

CGV had closed its Yeonsu branch in March 2025, citing management difficulties caused by the COVID-19 pandemic. The company attempted to exercise a legal right to terminate the lease under the Commercial Building Lease Protection Act, which allows tenants to end contracts if they suffer business deterioration due to quarantine measures.

However, the Seoul Central District Court ruled that the termination was not lawful. The court noted that the closure occurred nearly three years after COVID-19 quarantine measures ended in May 2022, making it difficult to establish a direct causal link between the pandemic and the closure. The court observed that the rise of Over-the-Top (OTT) streaming services and general industry downturns were significant factors in the decline of cinema attendance and revenue.

The court calculated the damages based on unpaid rent and management fees for the remaining lease period, which extended until 2037. While the estimated damages were approximately 20.8 billion won, the court reduced the amount to 75% due to the long remaining lease term and the landlord's potential to re-lease the space. After deducting the security deposit, the final amount owed was set at 15.322 billion won.