On September 22, 2026, the First Department issued a decision in Aurelius Capital Master Ltd. v. Hertz Intl. Ltd., 2026 NY Slip Op. 05369, holding that an agreement’s indemnification provision failed to meet Hooper‘s high hurdle for inter-party indemnification, explaining:
In their cross-appeal, plaintiffs contend they are entitled to prevailing-party attorneys’ fees under section 6(a) of the Backstop Agreement’s indemnification clause. Clause 6 of the Backstop Agreement is captioned “Indemnification.” Subsection (a) says defendants:
“shall . . . indemnify and hold harmless each [plaintiff] . . . from and against all losses, claims, damages, liabilities and costs and expenses . . . that any such Indemnified Person may incur or to which any such Indemnified Person may become subject arising out of or in connection with this . . . Agreement and the transactions contemplated hereby and thereby, including . . . any breach by [defendants] of this . . . Agreement.”
Subsection (b) sets forth the procedures for indemnification, such as notice from plaintiffs to defendants. Defendants had the right to assume the defense of any Indemnified Claims brought against an Indemnified Person.
We conclude that the language of the indemnification provision falls short of satisfying the exacting standard of Hooper Assoc. v. AGS Computers (74 NY2d 487, 491-492 [1989]), which held that for an indemnification clause to cover claims between the contracting parties rather than third-party claims, its language must unequivocally reflect that intent. This exacting standard, creates a heavy burden, which was not met here.
Indeed, section 6 contains the hallmarks of a standard third-party indemnity: notice requirements, litigation-control provisions, and rights to assume a defense. These structural features mirror those in Hooper and similar cases, which hold that such clauses do not extend to claims between contracting parties. As the Court of Appeals recognized, the inclusion of such provisions makes clear that the indemnity provision applied to third-party claims.
(Internal quotations and citations omitted).