On May 29, 2024, Justice Masley of the New York County Commercial Division issued a decision in Gramercy Funds Mgt. LLC v. Schlumberger N.V., 2024 NY Slip Op. 31855(U), holding that a complaint had sufficiently alleged that a corporate parent that negotiated an agreement on behalf of a subsidiary was bound by the agreement, explaining:
Defendants assert that the claims against SLB Parent must be dismissed because it is not a party to the Letter Agreement and its amendments. It is well settled that a non-signatory to an agreement is not bound by that agreement except in limited circumstances including as a third-party beneficiary or an alter ego of a signatory or where it is a party to another related agreement that forms part of the same transaction. A parent company can also be held liable as a party to its subsidiary’s contract if the parent’s conduct manifests an intent to be bound by the contract, which intent is inferable from the parent’s participation in the negotiation of the contract, or if the subsidiary is a dummy for the parent, or if the subsidiary is controlled by the parent for the parent’s own purposes.
Here, plaintiff alleges that it negotiated the Letter Agreement exclusively with representatives of SLB Parent, including negotiating the specifies of the Term Sheet with Mohamed Amin, Controller and Treasurer at SLB Parent and incorporating revisions to the draft made by Anami Bhattacharyya, Senior Legal Corporate Counsel at SLB Parent. Plaintiff also alleges that it negotiated the amendments to the Letter Agreement and the RPA, as well as some oral agreements to extend the exclusivity period, with SLB Parent. Plaintiffs further allege that SLB Parent’s representatives made representations that SLB Parent was working on obtaining PetroIeos’ omnibus consent to the transaction and continued to make representations that SLB Parent was committed to the transaction. These allegations are sufficient at this juncture to withstand a motion to dismiss.
(Internal quotations and citations omitted).