The Supreme Court said Wednesday television owners are legally required to sign up with public broadcaster NHK and pay a subscription fee, dismissing a claim that the system violates freedom of contract rights guaranteed by the Constitution.

The ruling, the first of its kind by the top court, was handed down in a lawsuit filed by NHK against a Tokyo man who refused to respond to NHK’s request to sign a contract in September 2011. He owned a television set from March 2006.

The ruling is expected to bring great reassurance to NHK, also known as Japan Broadcasting Corp., which has relied on the fees as its main source of income and has been struggling with unpaid bills.

At issue is the Broadcast Law that says any person who has installed equipment capable of receiving NHK broadcasts shall conclude a contract with NHK. But the law does not stipulate that the payment of the so-called broadcast receiving fee is an “obligation,” leaving room for some experts to argue its interpretation.

NHK is funded through the fee, which it says should be paid by all TV-owning residents, regardless of nationality and of whether or not its programs are watched. But some 20 percent of households, mainly those in major cities, fail to pay the money, according to the broadcaster.

There is no penalty for not paying the fee, which is annually about ¥14,000 ($124) for receiving terrestrial broadcasting.

During the trial, the man insisted that the Broadcast Law stipulation is legally nonbinding and only requires “efforts” to be made to enter into a contract with NHK and therefore he does not have to pay the fee. He also said forcing him to sign a deal violates freedom of contract rights.

NHK argued that making every household and business with a TV set pay the fee equally is reasonable and constitutional in light of the company’s role as a public broadcaster.

NHK also said the contract should be perceived as concluded when its written request is delivered to the concerned person and the payment should start from that point.

But the man said the contract should not be deemed as concluded unless the TV owner has given his or her consent.

The top court ruling follows a 2014 sentence by the Tokyo High Court, which upheld a 2013 Tokyo District Court decision to order the man to sign the contract with NHK and pay about ¥200,000 in broadcast receiving fees.

Facing a rise in the number of people refusing to pay the fee in the wake of NHK-related scandals in 2004, the public broadcaster began taking legal actions to demand payment from 2006.

The ratio of payment fell below 70 percent following the scandals, including embezzlement of production expenses by NHK staff, but it recovered to about 80 percent in fiscal 2016.

Debates about making payment of the fee an obligation have taken place since the 1960s, but the move has not been formalized.