Judge Jed S. Rakoff
Ramasamy became chief operating officer (COO) and chief executive officer (CEO) of Essar Global Ltd.’s subsidiary Aegis Communications. A 2004 employment agreement and a 2005 supplemental compact granted him 7 million options for Aegis’ stock. Aegis’ conversion into a private company by the end of 2006, would render his options worthless. Essar purportedly orally agreed to give Ramasamy a 1.25 percent equity stake in Aegis in exchange for remaining as CEO and COO during the conversion. Essar did not provide Ramasamy certificates of the equity interest’s transfer. District court dismissed Ramasamy’s lawsuit alleging contract breach and promissory estoppel in favor of arbitration. Applying Texas contract law it ruled that although not a signatory to the 2004 and 2005 agreements, Essar could invoke their arbitration clause. Under the first prong of the intertwined claims test in Grigson v. Creative Artists Agency LLC, Ramasamy’s entitlement to his compensation under his purported oral agreement with Essar depended on whether he fulfilled his obligations under his original Aegis employment agreements. Ramasamy must “rely on the terms” of those original agreements to show he is entitled to compensation.
