This action arises from criminal complaints filed in Mexican court by several nonparty companies against plaintiffs Jose Antonio Canedo-White; Maria Clara Lloreda Williamson (as personal representative for the estate of Carlos Williamson-Nasi); Gonzalo Gil-White; Miguel Angel Villegas; and Cynthia Ann Delong. Plaintiffs brought this suit against defendants Asia Research and Capital Management LTD; GHL Investments (Europe) Ltd.; and Ship Finance International, Ltd. for allegedly directing those companies—whom the parties refer to as Singapore Rig Owners ^[FN1] —to file the complaints.

The Singapore Rig Owners were originally owned by Oro Negro, a Mexican oil-services [*2]company. (NYSCEF No. 2 at ¶ 2.) Under a bond agreement between Oro Negro and Nordic Trustee AS, a firm acting for the bondholders including defendants, Oro Negro issued $900 million in bonds to investors. (Id. at ¶¶ 46, 70.) In 2016, Oro Negro and Nordic amended the bond agreement. (NYSCEF No 9.) As part of the amendments, the parties agreed to release each other (and certain affiliates) from claims arising from transactions that occurred before 2016. (NYSCEF No. 2 at ¶ 54.) To do so, Oro Negro and Nordic signed a release, in addition to the amended bond agreement.^[FN2] (See NYSCEF No. 10 [release]; NYSCEF No. 9 at ¶¶ 15.6, 15.7 [amended bond agreement].)

In 2017, Oro Negro filed for bankruptcy. (Id. at ¶ 70.) Defendants exercised their security rights under the bond agreement and replaced the directors of the Singapore Rig Owners. (Id. at ¶¶ 56, 70.) Plaintiffs allege that the Singapore Rig Owners came under defendants' control. (Id. at ¶ 70.) Plaintiffs claim that defendants used their newfound control over the Singapore Rig Owners to file criminal complaints against Oro Negro and plaintiffs with the Mexico City Prosecutor's Office in May 2019 and October 2020 in violation of the amended bond agreement and release. (Id. at ¶¶ 74, 78, 88.)

Plaintiffs assert claims for breach of the amended bond agreement and release; breach of the covenant of good faith and fair dealing; and specific performance. Defendants move to dismiss the action under CPLR 3211 (a) (1) and (7) and CPLR 327. The branch of the motion seeking dismissal under CPLR 3211 (a) (7) is granted.

Plaintiffs say that bringing the criminal complaints violated the amended agreement and release, because defendants allegedly released those claims. Defendants argue that they could not have breached these agreements, because they did not file the complaints. Instead, they emphasize that the Singapore Rig Owners filed the criminal complaints. Defendants argue that, even assuming defendants released their own claims against plaintiffs under the amended bond agreement and release, defendants did not file any criminal complaints. (NYSCEF No. 7 at 10.)

Plaintiffs argue, however, that defendants did breach the amended bond agreement and release, because they allegedly directed the Singapore Rig Owners to file the complaints. Plaintiffs contend, in essence, that because defendants allegedly controlled the Singapore Rig Owners, the Rig Owners' conduct in bringing the complaint may be imputed to defendants. (NYSCEF No. 14 at 9.)

The question, therefore, is whether plaintiffs have alleged facts that could provide a basis to hold defendants responsible for the Singapore Rig Owners' conduct. This court concludes that plaintiffs have not done so.

In opposing dismissal, plaintiffs contend first that they have stated a claim for holding defendants responsible, because (plaintiffs say) they have sufficiently alleged that an agency relationship existed between defendants and the Singapore Rig Owners. (NYSCEF No. 14 at 8-10.) This argument is unpersuasive.

An "agent is a party who acts on behalf of the principal with the latter's express, implied, [*3]or apparent authority." (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1993].) An agency relationship exists if there is "a manifestation of consent by one entity to another that the agent shall act on the principal's behalf and subject to the principal's control." (Quik Park W. 57, LLC v Bridgewater Operating Corp., 148 AD3d 444, 445 [1st Dept 2017].) An agent must also consent to acting on the principal's behalf. (See Maurillo, 194 AD2d at 146.) And, importantly, "[t]he duties of an agent are defined by the terms of the agreement that gave rise to the agency." (G.K. Alan Assoc., Inc. v Lazzari, 44 AD3d 95, 101 [2d Dept 2007], affd 10 NY3d 941 [2008].)

Plaintiffs have alleged no facts that might show that defendant created an agency relationship with the Singapore Rig Owners for purposes of filing the criminal complaints. Plaintiffs allege that the Singapore Rig Owners were "acting under the unlawful control of" defendants (NYSCEF No. 2 at ¶¶ 75, 88) or as entities that defendants "control and direct" (id. at ¶¶ 78, 91). Plaintiffs also allege that defendants replaced the directors of Singapore Rig Owners. (NYSCEF No. 14 at 9.) But these allegations, even if true, would not give rise to an agency relationship—i.e., one in which defendants delegated authority to the Singapore Rig Owners to take their own actions on defendants' behalf. Instead, plaintiffs are alleging that defendants acted through the Singapore Rig Owners by controlling the Rig Owners' internal decision to bring the criminal complaints. These allegations sound in alter-ego liability, not agency. And plaintiffs have not sufficiently alleged that the Rig Owners were merely alter egos of defendants.

In determining the existence of an alter-ego relationship, a court will look at factors such as "the disregard of corporate formalities; inadequate capitalization; intermingling of funds; overlap in ownership, officers, directors and personnel; common office space or telephone numbers; and the degree of discretion demonstrated by the alleged dominated corporation." (Tap Holdings, LLC v Orix Fin. Corp., 109 AD3d 167, 174 [1st Dept 2013] [internal quotation marks omitted].) Plaintiffs here, however, plead no facts—other than that defendants replaced the Singapore Owners' directors—to suggest an alter-ego relationship between defendants and the Singapore Rig Owners. The court is unpersuaded that this allegation alone is insufficient to demonstrate that defendants completely dominated Singapore Rig Owners for alter-ego purposes.

Absent sufficient allegations of an agency or alter-ego relationship between defendants and the Singapore Rig Owners, defendants may not be held responsible for the Rig Owners' actions in bringing the criminal complaints in Mexican court. Defendants' motion to dismiss the complaint is therefore granted. Given this disposition, the court does not reach the parties' numerous additional arguments.

Accordingly, it is

ORDERED that the branch of defendants' motion seeking dismissal of the action under CPLR 3211 (a) (7) is granted, and the complaint is dismissed, with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that defendants serve a copy of this order with notice of its entry on defendants and on the office of the County Clerk (using the NYSCEF document type "Notice to the County Clerk - CPLR § 8019 (c)"), which shall enter judgment accordingly.