Lotte Duty Free hopeful of positive High Court verdict on airport rent refund demand

Following a favourable Supreme Court ruling, the Korean travel retail is optimistic the higher court will order a full refund of airport rents paid during the COVID-ruined March to August 2020 period.

May 27, 2025 - 13:20

Lotte Duty Free hopeful of positive High Court verdict on airport rent refund demand

SOUTH KOREA. Lotte Duty Free (through Hotel Lotte and Busan Lotte Hotel, the respective parents of its Gimpo and Gimhae airport operations) is optimistic the Seoul High Court will rule in its favour regarding a refund of airport rent fees paid to Korea Airports Corporation in the pandemic-ravaged months of March to August 2020.

This follows a recent favourable Supreme Court ruling, the company told The Moodie Davitt Report.

Lotte Duty Free said that due to the South Korean government’s consolidation of all international flights at Incheon International Airport during the COVID-19 crisis, the company was compelled to suspend operations at its Gimpo and Gimhae Airport stores during those months.

As a result, the travel retailer filed a lawsuit against Korea Airports Corporation seeking a refund of rental fees.

The Supreme Court of Korea this month ruled that because the Gimpo and Gimhae international terminals were effectively shut down, it was impossible for tenants to fulfill their contractual obligations.

The Court held that rent could not be charged during that period and remanded the case to the Seoul High Court, “where we are hopeful for a favorable outcome”, Lotte Duty Free told The Moodie Davitt Report.

The company added, “It is important to clarify that our case is fundamentally different from the recent rent adjustment claims filed by Shilla Duty Free and Shinsegae Duty Free [to Incheon International Airport Corporation]. In Lotte Duty Free’s case, operations were entirely suspended due to the government-mandated closure of international terminals, making business activity impossible.

“In contrast, the other companies are seeking rent reductions on [Incheon International Airport] contracts awarded through competitive bidding. Granting such rent relief could raise concerns about fairness among other duty-free operators and commercial tenants at Incheon International Airport who participated under the same bidding conditions.”

The Ministry of Land, Infrastructure and Transport halved airport rents from March to August 2020 before waiving them entirely from September onward as the crisis persisted.

After Korea Airports Corporation refused the dual Hotel Lotte and Busan Lotte Hotel demand for a full rent waiver for the March to August 2020 period, both companies filed suit.

The Seoul District Court first ordered a -70% reduction for April-August 2020, before the appelate court (Seoul High Court) ruled in favour of a -50% reduction applied to March 2020 and -70% for the April-August period that year.