Local entertainment group Wellmade STARM sued Rain and his agency JYP Entertainment in March last year for 4.57 billion won (3.95 million dollars) in damages.
The group, which financed Rain's US tour in 2006-2007, claimed he breached a contract with it by failing to perform 16 concerts.
Judge Bae Kwang-Kuk said in his ruling, quoted by Yonhap news agency, that poor preparations by US promoters led to Rain's aborted concerts.
The ruling came seven months after Rain settled a separate lawsuit over a cancelled concert in Honolulu in 2007.
A US court had ordered him and his agency to pay more than eight million dollars for breaching a contract with Hawaiian promoter Click Entertainment to perform the concert.
An agreement was reached last June to settle the case and avoid an appeal, Details were not disclosed.
Rain argued in the US case that the concert stage was not properly set up for him, and that he was unable to use his name in the United States because of a copyright challenge from a US Beatles tribute band also called Rain.
The 26-year-old singer, whose real name is Jung Ji-Hoon, is one of South Korea's biggest celebrities and has a big following across Asia.
Source: My Sinchew