MEMORANDUM OPINION

GLASSCOCK, Vice Chancellor.

In enacting the statute of limitations applicable to contracts,1 the General Assembly has determined that justice requires that actions sounding in contract be brought, if at all, within three years of accrual. This determination necessarily represents a balancing of the interests of justice, which include seeing parties to contracts made whole for their breach, as well as preventing allegedly-breaching parties from being unfairly made to address stale claims for which proof becomes progressively less trustworthy over time. The same interests have caused the legislature to erect a barrier of two years after which certain tort claims—even more reliant on circumstantial proof and fallible recollection—may not be brought.2 In enacting these provisions, the legislature has set an outer limit. Parties to contracts, however, may weigh the interests addressed by statute differently when it comes to the particular circumstances of their agreement. Those parties, it is clear, are in a better position than legislators to know what result is called for by those circumstances peculiar to their relationship. For that reason, and because this jurisdiction respects the right to contract in general, Delaware recognizes the right of contracting parties to impose a shorter period of limitation than that provided for by statute. When parties do so, that determination will be respected as a wholesome determination of the interests of the parties, entirely in keeping with the purposes of the statute: to promote prompt resolution of issues and eliminate stale claims. This particular case involves such a choice by the parties. Having contractually bound itself to a fifteen-month period within which certain actions must be brought, the counterclaimant must be held to that bargained-for choice. Where, however, the parties have chosen not to impose a more stringent limitation period, the statute must control.

In December 2010, Plaintiff and Counterclaim Defendant, ENI Holdings, LLC ("ENI") sold Roberts & Shaefer Co. ("R&S") to Defendant and Counterclaimant, KBR Group Holdings, LLC ("KBR") pursuant to a Stock Purchase Agreement ("SPA"). The purchase price of R&S was partially based on its working capital at closing.3 Unable to agree on that amount, the parties sought arbitration, in accordance with the SPA, to determine R&S's working capital at closing.4 The parties also sued one another in this Court to settle additional disputes arising from KBR's acquisition of R&S. This Memorandum Opinion explains my decision regarding ENI's Motion to Dismiss KBR's First Amended Verified Counterclaim ("Amended Counterclaim"). For reasons I explain below, ENI's Motion to Dismiss is granted in part and denied in part.

I. Background

Prior to the December 2010 acquisition, ENI, a Delaware limited liability company, directly owned 100% of the stock of ENI Holdings, Inc. ("Holdings"), the holding company for R&S.5 In 2007, ENI and R&S were acquired by OCM/GFI Power Opportunities Fund II ("OCM/GFI"), a joint venture between Oaktree Capital Management, L.P. ("Oaktree") and GFI Energy Ventures, LLC ("GFI Energy"), both private equity firms.6 As a result of this acquisition, Oaktree and GFI Energy indirectly owned R&S through ENI, while GFI Energy managed OCM/GFI's portfolio.7

In mid-2010, KBR, an engineering, procurement, and construction company organized under Delaware law,8 began discussions with GFI Energy and ENI about acquiring R&S, a contractor that installs material handling systems for industries like mining and power.9 On October 1, 2010, KBR presented an indicative offer for R&S, and on October 27, 2010, the parties signed a letter of intent.10 Nearly two months later, on December 21, 2010, KBR purchased 100% of Holdings pursuant to the SPA.11 The purchase price for R&S was $280 million, but this amount was subject to certain working capital and indemnification adjustments.12

Under the terms of the SPA, two escrow accounts were established, each with funds from the $280 million purchase price. In one escrow account, the parties set aside an amount to account for any adjustment to R&S working capital.13 The parties placed $25 million into a second escrow fund (the "Indemnity Escrow Fund") to satisfy any indemnification claims brought pursuant to the SPA.14 Section 6.13 governs the release of this escrow amount, stating:

Section 6.03 provides that:

The SPA's indemnification provisions constitute the "sole and exclusive remedy" for all claims relating to KBR's acquisition of R&S, with two narrow exceptions.17 First, fraud claims are excepted from this provision, and second, the parties may seek equitable relief if remedies at law are inadequate to "enforce or prevent any violations by" the parties.18

The parties also agreed to a survival provision in Article VI of the SPA. Specifically, the SPA provides for three categories of seller representations and warranties, each surviving the closing and terminating on a specified date. First, representations and warranties deemed fundamental, including tax matters and the organization and capitalization of R&S and its subsidiaries (the "Fundamental Representations"), terminate seven years from the closing or thirty days after the applicable statute of limitations expires, whichever occurs first.19 Second, representations and warranties pertaining to environmental matters terminate three years after the closing.20 Third, all other representations and warranties (the "Non-Fundamental Representations") terminate on a specified termination date; both parties agree that this Termination Date was March 23, 2012.21 Additionally, covenants and agreements of the parties to be performed post-closing "survive in accordance with their respective terms."22

Further, the parties agreed that there would be a $2.5 million deductible and $25 million cap for indemnification claims against ENI except for the "Excluded Matters," which include claims arising from the Fundamental Representations, covenants, and fraud.23

The SPA outlines a dispute resolution procedure for inter-party indemnification claims in Section 6.08. Pursuant to this section:

After notice has been provided, the Indemnified Party must provide the Indemnifying Party with "full access to its books and records," including those of R&S and its subsidiaries if ENI is the Indemnifying Party, in order to "allow[] the Indemnifying Party a reasonable opportunity to verify any such claim for Damages."25 Also, within forty-five days of receiving notice, the Indemnifying Party may dispute its liability.26 If the Indemnifying Party does not dispute liability, then "such notice shall be conclusively deemed to be a liability of the Indemnifying Party."27 If, on the other hand, the Indemnifying Party timely disputes liability, the parties must engage in good faith negotiations aimed at resolution of the dispute.28 SPA Section 6.08 then provides that "[p]romptly following the final determination of the amount of Damages to which the Indemnified Party is entitled (whether determined in accordance with this Section 6.08 or by a court of competent jurisdiction), the Indemnifying Party shall pay such Damages to the Indemnified Party by wire transfer or certified check made payable to the order of the Indemnified Party."29 KBR provided ENI with notice of claims (now the subject of Counterclaims A, C, D and E)30 prior to the March 23, 2012 Termination Date.31 KBR provided notice to ENI of additional claims (including those now the subject of Counterclaim G) after this date.32 ENI did not receive notice of Counterclaims B, F, H, I, or J prior to KBR's filing its counterclaims.

On December 3, 2012, ENI filed a Verified Complaint alleging that KBR breached several provisions of the SPA, as well as the implied covenant of good faith and fair dealing.33 KBR responded with a Verified Counterclaim, amended on May 17, 2013, alleging that ENI had engaged in fraudulent misconduct and breached the SPA by, inter alia, manipulating R&S's financial condition to inflate the purchase price; continuing to provide or promise payments to employees from an ENI long-term incentive plan after the closing; and leaving certain Indonesian tax matters unresolved before closing.34 KBR seeks to rescind the transaction and recover the purchase price, or alternatively, to recoup the $25 million in the Indemnity Escrow Fund, as well as damages for ENI's fraud and attorney fees.35 ENI moved to dismiss KBR's Amended Counterclaim on June 17, 2013.36 On June 19, 2013, KBR filed a Motion for Preliminary Injunction to enjoin arbitration pending the outcome of this matter. Oral argument for both motions was held on August 5, 2013. In a September 13 Letter Opinion, I denied KBR's Motion for Preliminary Injunction.37 For the reasons below, ENI's Motion to Dismiss is granted in part and denied in part.

II. Standard

Under Court of Chancery Rule 12(b)(6), a motion to dismiss will be granted if there are no reasonably conceivable circumstances that would entitle the counterclaimant to recover.38 Consequently, a counterclaim will only be dismissed if it clearly lacks merit as a matter of law or fact.39 In considering the motion before me, I must "draw all reasonable inferences in favor of the [counterclaimant], and accept all well pled factual allegations as true."40 While "[v]agueness or lack of detail, standing alone, is insufficient to dismiss a claim,"41 this Court "is not required to accept every strained interpretation of the allegations proposed" or "conclusory allegations without specific supporting factual allegations."42

Consistent with this standard, I consider those facts alleged in KBR's Amended Counterclaim, as well as the Stock Purchase Agreement, which is incorporated by reference therein. At this stage of the proceedings, I decline ENI's invitation to take judicial notice of KBR's SEC filings.43

III. Analysis

KBR has based its counterclaims on the indemnification provisions of the SPA and fraud. Specifically, KBR alleges the following: that ENI breached SPA Section 3.07 by knowingly underestimating costs in connection with the contract for the Melawan Crushing Plant & Western Overland Conveyor ("KPC1") project, and by unjustifiably releasing millions of dollars in cost and contingency to margin in October 2010, which inflated R&S's working capital, and ultimately, its purchase price (Counterclaim A); breached Sections 3.06 and 3.07 by understating cost and contingency on the OLC and TBCT Duplication ("KPC2") and KPC1 projects (Counterclaim B) and by making improper cost adjustments on the KPC2 project (Counterclaim C); breached Sections 3.11(a), 3.11(e), and 5.14(a) by mishandling certain Indonesian tax issues (Counterclaim D); breached Sections 3.17(n), 3.26, 5.04, and 5.09(b) because R&S employees had a continuing interest in ENI's Long Term Incentive Plan ("LTIP") that was not disclosed (Counterclaim E); breached Sections 3.04(b) and 3.26 because a Polish subsidiary had certain preemptive rights that were not disclosed (Counterclaim F); breached Sections 3.01, 3.08, and 3.26 because R&S Canada lacked a certificate of authorization to practice professional engineering (Counterclaim G); and breached Section 3.13(b) in connection with a rock slide (Counterclaim H) and alleged design deficiency (Counterclaim I) relating to R&S Canada's Elkview project, as well as in connection with mechanical failures on the KPC1 and KPC2 projects (Counterclaim J). Additionally, KBR alleges that ENI committed fraud in connection with the misrepresentations alleged in Counterclaims A, B, C, and E. The counterclaims and the contractual provisions on which they are dependant are represented graphically in Figure I. Below, I discuss, and reject, alleged procedural defects in connection with the Amended Counterclaim. I then address each of KBR's specific counterclaims in turn.

A. Alleged Procedural Deficiencies

Preliminarily, ENI contends that "Section 6.08 places various conditions precedent regarding notice, information sharing, and good faith negotiation on a party seeking indemnification under the SPA," which KBR has failed to satisfy.44

First, ENI asserts that KBR did not provide sufficient "pre-litigation notice" for some of its claims, as called for in Section 6.08 of the SPA.45 Specifically, the notice that KBR provided in March 2012 did not claim breaches of Sections 3.01, 3.04, 3.08, 3.13, 5.04, or 5.14, or reference Counterclaims B, F, G, H, I or J; thus, according to ENI, these counterclaims are barred.46 Section 6.08, which sets out the inter-party dispute resolution procedure, provides that a party seeking indemnification "promptly . . . give written notice" to the other party.47 Notably, "failure to provide such notice shall not relieve the Indemnifying Party of any obligation it may have" under the indemnification provisions of the SPA "except to the extent that it has been prejudiced by such failure."48 ENI does not contend that it was prejudiced by KBR's failure to provide notice.49 Furthermore, because the notice provision in Section 6.08 corresponds to the "inter-party" dispute procedure, it is not clear from the language of the contract that notice was a pre-litigation requirement. Thus, I do not find that KBR's failure to give notice of each of its counterclaims before bringing this lawsuit provides a basis to dismiss.

Second, ENI argues that Counterclaims A through J should be dismissed because KBR failed to negotiate in good faith in accordance with Section 6.08.50 ENI notes that, although KBR "allege[s] that it met with ENI and `attempted in good faith to resolve the dispute, as contemplated by the SPA,'" this meeting took place on April 8, 2013, whereas KBR filed its counterclaims on January 25, 2013 and ENI filed its first motion to dismiss on March 18, 2013.51 KBR claims, on the other hand, that once ENI filed suit, KBR was no longer required to comply with the procedures delineated in Section 6.08.52 I find that KBR's supposed failure to comply with the dispute resolution procedures is an insufficient basis to grant ENI's Motion to Dismiss in light of the fact that KBR alleges that the parties communicated in good faith prior to KBR filing its counterclaims in this Court;53 the SPA does not explicitly require that the parties meet in person in order to satisfy the requirement that they negotiate in good faith; and ENI itself filed the initial Complaint in this matter, on December 3, 2012, an act that invoked the jurisdiction of this Court and limited the opportunity for extra-judicial negotiations between the parties.

I note that ENI's only basis to dismiss Counterclaim D rests on allegations of KBR's failure to provide "pre-litigation notice" and negotiate in good faith with respect to Counterclaim D, before filing its counterclaims in this Court. Because I have found that both of these contentions are insufficient bases upon which to dismiss KBR's counterclaims, ENI's Motion to Dismiss Counterclaim D is denied.

I turn now to the breach of representation claims themselves, and whether they were timely filed. As described above, the SPA provides for the post-closing survival of three categories of seller representations and warranties, each category with its own termination date. The Fundamental Representations terminate the earlier of seven years from the closing or thirty days after the applicable statute of limitations expires; representations and warranties pertaining to environmental matters—not pertinent here—terminate three years after the closing; and the Non-Fundamental Representations terminated on March 23, 2012.54 In addition, covenants to be performed after the closing "survive in accordance with their respective terms."55 Only claims arising from the Non-Fundamental Representations are arguably untimely; I address those directly below.

B. The Non-Fundamental Representations

Under the terms of the SPA, the Non-Fundamental Representations survive until March 23, 2012. None of KBR's counts to redress allegedly false Non-Fundamental Representations was filed before that date.

1. The Survival Clause

The parties dispute the effect of the SPA's survival provision on the Non-Fundamental Representations. ENI asserts that counterclaims based on the Non-Fundamental Representations are time-barred because KBR did not file these causes of action before the March 23, 2012 Termination Date.56 KBR counters that this Court cannot conclude that the language of SPA Section 6.01 unambiguously and clearly evinces the contractual equivalent of a statute of limitations; therefore, ENI's motion as to these counterclaims should be denied.57 Additionally, KBR counters that the Survival Clause requires only notice, rather than a court filing, during the survival period; thus, its notice to ENI before the termination date was sufficient to preserve these counterclaims.58

Faced with a question of contract interpretation on a motion to dismiss, I must determine whether the contractual language at issue is unambiguous.59 If so, I must give full effect to its meaning.60 If, however, the contractual language is "reasonably or fairly susceptible of different interpretations,"61 I must resolve this ambiguity in favor of KBR as the nonmoving party.62 Having reviewed Chancellor Strine's decision in GRT, Inc. v. Marathon GFT Technology, Ltd., upon which ENI principally relies, and the survival provision of the SPA in conjunction with the SPA as a whole,63 I find that the parties unambiguously created a contractual period of limitation for breaches of Non-Fundamental Representations, which period expired on March 23, 2012, before KBR brought these claims.

a. Contracting parties can limit the applicable limitations period.

In Delaware, parties may contractually agree to a period of limitations shorter than that provided for by statute, so long as this shortened period is reasonable.64 In fact,

As the Court explained in detail in GRT, one convention for creating a shorter limitations period is by drafting a survival clause, which states that representations and warranties survive only through a specified date.66 Notably, under Delaware law, which respects the freedom of contract, "there is no special rule requiring that in order to contractually shorten the statute of limitations," parties utilize particular, or "particularly `clear and explicit,' language."67 Instead, our courts have interpreted language to provide "contractual provisions that limit the survival of representations and warranties as evidencing an intent to shorten the period of time in which a claim for breach of those representations and warranties may be brought, i.e., the statute of limitations."68 Nevertheless, "the reality that parties to a contract may shorten the statute of limitations does not mean that they did, or did so unambiguously."69 I find here, however, that the parties unambiguously agreed for a shorter limitations period to govern the Non-Fundamental Representations in the SPA.

b. ENI and KBR contractually shortened the limitations period applicable to the Non-Fundamental Representations.

Section 6.01 of the SPA states that:

Under the SPA, the Termination Date was March 23, 2012.

Interpreting similar language, this Court held in GRT that using such a survival clause evinced the parties' clear intent to effectuate a contractual limitations period, explaining that:

In that case, the Court determined that a survival clause providing that certain representations, as well as their remedies, would terminate after a one-year period evidenced the parties' unambiguous intent to create a contractual limitations period.72 The effect of the survival clause, this Court found, was to preclude any cause of action involving those representations that was filed after the one-year survival period.73

Although KBR attempts to distinguish the SPA from the contract at issue in GRT, its arguments are unpersuasive. First, KBR attempts to differentiate the SPA here from the Purchase Agreement in GRT based on the fact that the contractual language there provided that not only the representations, but also their corresponding remedies, expired on the termination date. The language here, by contrast, is silent as to the termination of the remedy. As a result, argues KBR, the survival clause here does not serve to set a period limiting actions. I find this contention unpersuasive, because, although the simultaneous expiration of representations and their remedies bolstered the Court's finding in GRT, it did not provide the basis for the holding, which was that a period of survival of representations and warranties, followed by a date of termination, limited actions to the survival period only.74

Next, KBR contends that the Court's holding in GRT is inapplicable here because the intra-party dispute resolution scheme here is inconsistent with the survival clause serving as a limitation period. As explained below, however, my finding that the parties created a contractual period of limitations is consistent with the dispute resolution procedure contained in Section 6.08 of the SPA.

Finally, KBR asserts that the business context in GRT played a significant role in Chancellor Strine's decision-making, and that such a context is absent here. There are many reasons why parties, operating in a variety of business contexts, may contract for an abbreviated limitations period,75 and the parties negotiated and provided for such a period here; therefore, I find KBR's distinction unpersuasive.76 I find that the scholarly and thoughtful reasoning of GRT is applicable here, consistent with established principles of Delaware law, particularly the significance of the parties' agreement that the representations and warranties "terminate" on a date certain in the context of a contractual survival provision.77

c. Notice was not sufficient to preserve causes of action based on the Non-Fundamental Representations in a court of competent jurisdiction.

The parties disagree as to whether providing notice, rather than filing a lawsuit, is sufficient to preserve a claim prior to the Termination Date. KBR contends that Section 6.01 is ambiguous when read in conjunction with the inter-party dispute resolution procedures in Section 6.08, as well as Section 6.13, which governs the release of the indemnification escrow funds. Specifically, KBR asserts that Section 6.08 "makes clear that a `claim' for indemnification is made when the Indemnified Party (here, KBR) provides notice to the Indemnifying Party (here, ENI)."78 KBR emphasizes that the parties can resolve disputes arising out of the SPA either extra-judicially "in accordance with Section 6.08" or in a "court of competent jurisdiction."79 Accordingly, KBR contends that "nothing in Section 6.08 requires KBR to file suit in order to make a `claim' against ENI."80

Furthermore, KBR asserts that "so long as [it] initiated the claim process in accordance with Section 6.08 by giving notice to ENI before the Termination Date, ENI would not be entitled to the release of the Indemnity Escrow Account until KBR's claims were finally determined," either through inter-party negotiations or a competent court.81 This reading of the contract, according to KBR, is inconsistent with interpreting Section 6.01 as containing an abbreviated limitations period for certain representations and warranties.

I do not find that KBR offers a reasonable interpretation of the SPA, nor are its various assertions sufficient to cast a cloud of ambiguity over the clear language in Section 6.01. It is not a reasonable interpretation of the SPA that KBR can preserve a lawsuit based on an expired representation or warranty merely by providing notice before the applicable Termination Date.82 In fact, if I read the SPA as KBR wants me to, then KBR could provide notice of a claim under Section 6.08 before the termination date provided in Section 6.01, and then file a complaint in court any time after the termination date, i.e. after the representations and warranties underlying the litigation had expired. For the reasons already detailed above, it is clear that the survival language at issue here was intended to create a limitations period, and this is neither how a statutory limitations period nor a contractual limitations period operates under Delaware law.83

I also note that it is not inconsistent that the parties would create a contractual limitations period that requires the parties to preserve rights by filing a lawsuit, but that still provides for extrajudicial dispute resolution procedures. On one hand, a contractual limitations period means that filing litigation is required to preserve a cause of action beyond the limitations period. On the other hand, the parties, in Section 6.08, have outlined a dispute resolution procedure to provide quick, non-judicial resolution where possible when an inter-party dispute arises under the SPA, a procedure that includes providing notice— within five days of discovery of the claim— to the other party, followed by abbreviated inspection and rebuttal periods, then by good-faith negotiations. Although providing notice of a claim triggers this dispute resolution process, and requires the escrow agent to reserve the amount in controversy, it does not preserve the notifying party's rights to bring a claim in this Court (or any other court of competent jurisdiction) after the underlying representations and warranties have expired in accordance with the contractual limitations period embodied in Section 6.01, any more than it would preserve such a right if the statutory limitations period were applicable. If either party, after providing notice to the other, runs up against the contractual limitations initiate that procedure; thus, the Court rejected the argument that the parties created the procedure as an avenue to avoid litigation. While that is not the case here, I still find that the dispute resolution procedure does not render unclear the parties' intent to create a contractual limitations period via the survival clause. As I explain above, nothing in the SPA prevents the parties from filing litigation to preserve a claim, while continuing to proceed through the dispute resolution procedure. period, it must bring suit or be thereafter barred. In other words, the SPA contemplates parallel, not mutually-exclusive, dispute resolution procedures.

KBR points out several instances where, in negotiations between the parties and in court filings, ENI has not insisted that KBR had to file suit (rather than simply serve notice) before the Termination Date to preserve a viable claim.84 However, I need not resort to extrinsic evidence to ascertain the parties' intent, as the language of the SPA is clear and unambiguous.85 I have therefore not considered these communications in interpreting the language at issue.

Because the Non-Fundamental Representations terminated well before KBR filed its counterclaims, I must dismiss the corresponding counterclaims unless KBR can establish that the contractual limitations period governing the Non-Fundamental Representations was tolled—an issue I address below.

2. Tolling

Under Delaware law, the statute of limitations begins to run on the date of accrual, which is generally when the alleged wrong takes place.86 In situations involving a breach of a contractual representation, the date of accrual is typically the closing date.87 There are, however, exceptions to this general principal; the statute of limitations may be tolled if the plaintiff (or in this matter, counterclaimant) establishes that an exception applies. KBR alleges that the doctrines of equitable tolling, fraudulent concealment, and inherently unknowable injury apply to prevent those counterclaims based on the Non-Fundamental Representations from being time-barred.88

a. Standard

KBR bears the "burden of pleading specific facts to demonstrate that the statute of limitations was, in fact, tolled."89 Notably, allegations of tolling, even on a motion to dismiss, are not governed by the same reasonable-conceivability standard that generally governs Rule 12(b)(6) motions.90 In fact, though a "court considering timeliness as a basis for a motion to dismiss must draw the same [counterclaimant]-friendly inferences required in a 12(b)(6) analysis," this posture "does not govern assertion of tolling exceptions to the operation of a statute of limitation."91 Instead, a "[counterclaimant] asserting a tolling exception must plead facts supporting the applicability of that exception."92 The reason for this requirement is plain: having discovered the facts sufficient to bring an action, a counterclaimant is uniquely aware of the circumstances which caused it to fail to do so in a timely manner; consequently, it bears the burden of pleading with specificity the reasons that the defendant should not enjoy the protections of the statutorily-imposed (or bargained-for) limitations period.

b. Fraudulent concealment and equitable tolling

KBR alleges that the doctrines of equitable tolling and fraudulent concealment apply here.93 "Each of these doctrines permits tolling of the limitations period where the facts underlying a claim [are] so hidden that a reasonable [counterclaimant] could not timely discover them."94 If applicable, the limitations period is tolled only until the counterclaimant is on inquiry notice, i.e. "is objectively aware of the facts giving rise to the wrong."95 The limitations period, therefore, is tolled under equitable tolling or fraudulent concealment only "until a [counterclaimant] discovers, or by exercising reasonable diligence should have discovered, his injury."96 I assume, without deciding, that these doctrines apply to the limitations period established by the SPA.

i. Fraudulent concealment

Under the doctrine of fraudulent concealment, the statute of limitations is tolled "if a defendant engaged in fraudulent concealment of the facts necessary to put a [counterclaimant] on notice of the truth."97 This doctrine requires "an affirmative act of concealment or `actual artifice' by a defendant that prevents a [counterclaimant] from gaining knowledge of the facts,"98 including "misrepresentations intended to put the [counterclaimant] off the trail of inquiry."99

KBR's allegations of fraudulent concealment involve Jeff Rodabaugh, former R&S President who continued as management after the December 2010 closing.100 KBR states its fraudulent concealment allegations at Paragraphs 104 and 105 of the Amended Counterclaim: "unbeknownst to KBR at the time, ENI [via the LTIP] knowingly created incentives for Rodabaugh that caused him to (1) misrepresent to KBR the amount of cost and contingency that were required for certain projects in connection with the post-closing working capital adjustment, (2) conceal facts regarding ENI's manipulation of R&S's accounting before the closing, (3) suppress problems that were emerging on various projects, thereby preventing KBR from pursuing certain claims and taking countermeasures in a timely fashion, and, ultimately (4) destroy documents . . . to hide their contents from KBR."101 As a result, "KBR did not discover all of the facts giving rise to its claims" until Rodabaugh's resignation on February 29, 2012.102 With respect to ENI, KBR simply recites its belief that Rodabaugh served as ENI's "secret agent."103 Eliminating the allegations regarding the pre-closing accountings, as well as the destruction of documents, which took place at the very end of the contractual limitations period, KBR's allegations are limited to the assertion that Rodabaugh continued to employ accounting practices and understate project problems post-closing, in a way favorable to ENI. The Amended Counterclaim contains only the conclusory allegation that Rodabaugh's "concealment" caused it not to "discover all the facts giving rise to its claims."104 This conclusory statement falls short of a pleading of specific facts that an act of fraudulent concealment on ENI's part prevented KBR from discovering specific claims in a specific way.105 KBR has therefore failed to plead facts sufficient to show fraudulent concealment should toll the contractual limitations period.

ii. Equitable tolling

The doctrine of equitable tolling, by contrast to fraudulent concealment, applies to reliance on the actions of a fiduciary. Under this doctrine, "the statute of limitations is tolled for claims of wrongful self-dealing, even in the absence of actual fraudulent concealment, where a [counterclaimant] reasonably relies on the competence and good faith of a fiduciary."106 In order for an otherwise time-barred claim to survive under this doctrine, the counterclaimant must plead specific facts to demonstrate its reliance on a self-dealing fiduciary, and that this reliance prevented the counterclaimant from being on inquiry notice of the wrongs perpetuated by its fiduciary. Demonstrating that the counterclaimant was not on inquiry notice requires pleading "when the [counterclaimant] learned of the [challenged transaction] . . .; when he had notice of facts concerning possible unfairness of the terms; and the reasonable steps he took to oversee his investment."107 Unlike the doctrine of fraudulent concealment, "[n]o evidence of actual concealment is necessary in such a case."108 This doctrine recognizes that "even an attentive and diligent [party] may rely, in complete propriety, upon the good faith of fiduciaries."109 In fact, this Court has noted that "[t]he obvious purpose of the equitable tolling doctrine is to ensure that fiduciaries cannot use their own success at concealing their misconduct as a method of immunizing themselves from accountability for their wrongdoing."110

KBR points out that Rodabaugh—who is not a party here—was a fiduciary for R&S, and thus presumably for KBR, post-closing. It then relies on the same allegations discussed above with respect to fraudulent concealment: that Rodabaugh failed to disclose the misleading accounting practices he and ENI had engaged in, pre-closing; that, to some extent, he continued to employ these practices while a fiduciary for KBR; and that he "suppress[ed] problems" occurring on "various projects, thereby preventing KBR from pursuing certain claims and taking countermeasures in a timely fashion."111 KBR alleges that it relied on "Rodabaugh's competence, good faith and fiduciary duties . . . and did not discover all of the facts giving rise to its claims" until Rodabaugh's departure on February 29, 2012.112 Because KBR has failed to plead with specificity what reliance on Rodabaugh led to suppression of which specific claims, and when KBR was placed on inquiry notice of those claims, KBR has failed to plead sufficient facts to support equitable tolling here.113

ENI argues that, other than a bare allegation that Rodabaugh served as ENI's "secret agent," there is nothing to indicate that ENI controlled Rodabaugh as its agent, or conspired with Rodabaugh post-closing, sufficient to support a finding that equitable tolling on account of Rodabaugh's acts should apply to ENI as well. Because the relationship between Rodabaugh and ENI, post-closing—unlike other facts relevant to tolling—is not uniquely within the knowledge of KBR, that relationship need not be pled with specificity; pleading facts that support an inference of agency is sufficient. However, because I have found that KBR has failed to plead facts sufficient to support equitable tolling for Rodabaugh's actions, I need not decide whether the facts support application of the doctrine to the non-fiduciary, ENI.

c. The discovery rule

KBR further alleges that the limitations period applicable to Counterclaims I and J, which relate to design deficiencies on two of R&S's projects, should be tolled pursuant to the discovery rule.114 Under the discovery rule, also known as the doctrine of unknowable injury, this Court will toll the statute of limitations in instances "where it would be practically impossible for a [counterclaimant] to discover the existence of a cause of action."115 The counterclaimant also must demonstrate that he is "blamelessly ignorant of the wrongful act and injury complained of."116 In other words, "there must have been no observable or objective factors to put a party on notice of an injury."117 KBR asserts that, because the design deficiencies in certain R&S projects were latent, and thus inherently unknowable, it has met this standard.118

ENI contends, persuasively, that the discovery rule should not apply here to toll a contractual limitations period because this would disrupt "the contractually-negotiated balance of risk the parties agreed to in the SPA."119 ENI asserts that "[f]reedom of contract allows sophisticated parties such as ENI and KBR to allocate the inherent risks of undetected liabilities associated with the sale of a business—thereby obviating the need for a discovery rule."120

There is little Delaware case law directly addressing the availability of the discovery rule to toll a contractual limitations period; however, in GRT, this Court addressed in dicta whether the plaintiff in that case had sufficiently alleged tolling under the discovery rule.121 Having considered Delaware law's respect for parties' contractual choices,122 and reviewed case law from other jurisdictions addressing that question,123 I conclude that application of the discovery rule to toll a contractual limitations period is inappropriate, at least, as here, where the inherent unknowability of a potential claim is itself knowable or predictable, and thus the proper source of negotiation and resolution between the parties to the contract. In such a case, parties who contract for an abbreviated limitations period must be held to their bargain.124 Consequently, KBR must be held to the contractually-abbreviated period of limitations unambiguously established in Section 6.01 of the SPA.

Because KBR's claims involving the Non-Fundamental Representations are time-barred, I dismiss the contractual (non-fraud-based) portions of Counterclaims A, B, C, H, I, and J, and, to the extent they involve a purported breach of the Non-Fundamental Representations, Counterclaims E, F, and G. To the extent, however, that those counterclaims are based in allegations of fraud, a different analysis applies, as addressed below.

3. Fraud Based on the Non-Fundamental Representations

KBR alleges that ENI engaged in fraudulent conduct in connection with the facts alleged in Counterclaims A, B, C, and E. KBR contends that ENI made controls."); but see Creative Playthings Franchising, Corp. v. Reiser, 978 N.E.2d 765, 770 (2012) ("We agree that a contractual limitations provision that did not permit operation of the discovery rule would be unreasonable and, therefore, invalid and unenforceable."). representations and warranties with regards to the Non-Fundamental Representations that were false. KBR alleges that "ENI falsely represented and warranted that R&S had in all material respects conducted its business in the ordinary course consistent with past practice and had not materially changed its accounting methods, principles, or practices" after improperly releasing certain cost and contingency reserves pre-closing in a manner that was inconsistent with past practice and beyond the ordinary course of business; that ENI's representations relating to its financial statements were false because ENI manipulated R&S's contingency reserves to alter the timing of revenue and income recognition; and that ENI falsely represented that the acquisition "would not entitle any employee of R&S to payment, or accelerate the timing of payment or vesting, or increase the amount of compensation or benefits due to any employee of R&S under any Employee Benefit Plan" even though ENI alleged continued employee payments and benefit schemes post-closing.125 KBR pleads that "ENI had knowledge or belief that the representations and warranties were false when made or the representations and warranties were made with reckless indifference to the truth," and that it justifiably relied on these false representations and warranties, suffering damages as a result.126

ENI contends that the survival period in Section 6.01 applies to KBR's allegations that ENI intentionally breached certain Non-Fundamental Representations; thus, according to ENI, these causes of action are time-barred. ENI contrasts the survival provision in Section 6.01(a), which does not contain an express exclusion for claims based on fraud, with other provisions governing indemnification within the SPA. For instance, the indemnification provisions in Article VI of the SPA are not the "sole and exclusive remedy" with regards to fraud, and fraud claims are not limited by the indemnification escrow fund or subject to the escrow deductible.127 ENI asserts that these exceptions, in comparison to the lack of a carve-out for fraud claims in Section 6.01(a), "demonstrate[] that the absence of a fraud exception from Section 6.01 was deliberate."128

KBR counters this interpretation by emphasizing that, whereas indemnification claims are "[s]ubject to the limitations set forth in this Article VI," fraud claims are not similarly limited.129 In fact, fraud claims are not only expressly excluded from the $2.5 million escrow deductible and the cap on damages, but, as KBR emphasizes, indemnification is also not the "sole and exclusive remedy" for "claims relating to the extent [sic] arising from fraud of a Party."130 KBR reads these various provisions and carve-outs as demonstrating that "there is no similar express indication that the parties intended to subject fraud claims to the Termination Date or any of the other limitations in Article VI."131

It is not clear, from the language of the SPA, that the parties intended, as ENI contends, that fraud involving the Non-Fundamental Representations be governed by the indemnification provisions of Article VI and thus, any cause of action in tort involving these representations be governed by the contractual limitations period in Section 6.01. In fact, Section 6.06 of the SPA, entitled "Exclusive Remedy," reads:

The last sentence of that Section carves out fraud from the strictures of the indemnification-remedy provision, stating that "[t]he provisions of this Section 6.06 shall not apply to claims relating to the extent [sic] arising from fraud of a Party."133 The SPA, by providing that the indemnification provisions do not constitute the "sole and exclusive remedy" for fraud, contemplates that at least some actions grounded in fraud can be brought outside the SPA's indemnification provisions, and thus, can be timely brought within the statutory—rather than contractual—limitations period. Although ENI asserts that, "[r]ead as a whole, the SPA demonstrates that the absence of a fraud exception from Section 6.01 was deliberate,"134 the SPA, which contemplates fraud claims beyond Article VI, does not clearly and unambiguously establish that the survival provision of Section 6.01 applies to govern even those fraud allegations based on the Non-Fundamental Representations. Because KBR has offered a reasonable reading of the SPA, which is, on this point, ambiguous at best, and because I must resolve any ambiguity in the contract in KBR's favor,135 ENI's Motion to Dismiss, as time-barred, KBR's claims for fraud based on the Non-Fundamental Representations and alleged in Counterclaims A, B, C, and E is denied.136 Because I so find, I need not reach KBR's argument that claims sounding in fraud cannot be subject to a limitations period shorter than that provided by statute, as a matter of public policy.137

C. The Remaining Counterclaims

I now turn to KBR's remaining allegations. These include allegations based on the Fundamental Representations, covenants, and fraud in connection with certain covenants. Under the SPA, the Fundamental Representations include those representations and warranties pertaining to the organization and capitalization of R&S and its subsidiaries; Counterclaims F and G make allegations that ENI breached several of these representations. In Counterclaim E, KBR contends that ENI breached certain covenants governing employee benefit matters, which are contained within Article V of the SPA, and committed fraud in connection therewith. None of these matters are subject to the abbreviated contractual limitation period discussed in detail above; ENI seeks dismissal on other grounds.

1. Counterclaim E

Prior to the December 2010 acquisition, ENI had in place for its employees a Long Term Incentive Plan ("LTIP"). That plan provided that "qualified employees received non-transferrable, performance-based awards of [common stock] of ENI to encourage them to contribute and participate in the success of ENI and its three subsidiaries," and "vesting could be accelerated on the sale of ENI."138 KBR contends that R&S President Jeff Rodabaugh, who remained an R&S employee after the closing, was 1) in a position to manipulate the purchase price ultimately paid by KBR to ENI, and 2) able to benefit from manipulating a "low" price; in other words, Rodabaugh was able to engineer a kickback for himself at the expense of KBR via the LTIP.

KBR was aware of the existence of the LTIP, as it was disclosed in a schedule to the SPA. However, KBR argues that ENI's continuing to grant awards under the LTIP post-closing violated Sections 3.17(n), 3.26, 5.04, and 5.09(b) of the SPA. As explained above, KBR's claims that ENI violated the Non-Fundamental Representations contained in Sections 3.17(n) and 3.26 must fail, since those claims are time-barred. However, KBR makes additional claims that are not time-barred, as they relate to breaches of covenants under Article V of the SPA, rather than Non-Fundamental Representations. KBR makes three allegations arising from these purported breaches of covenants. First, KBR contends that the LTIP constitutes an Employee Benefit Plan as defined in the SPA, and that ENI's continuing to grant awards under the LTIP therefore violated a covenant contained in Section 5.09(b), which provides that "Transferred Employees shall cease to participate in each Employee Benefit Plan sponsored or maintained by Seller . . .."139 Second, KBR argues that granting awards under the LTIP violated the covenant in Section 5.04, which provides that ENI shall not "in any way interfere with the relationship between Buyer . . . and any employee . . . ."140 Specifically, KBR contends that the LTIP created perverse incentives for KBR's new management in a way that constituted interference under Section 5.04. Third, KBR alleges that ENI's continuing to grant awards under the LTIP post-closing in violation of Section 5.09(b), and "interfering" with employees by creating incentives in violation of Section 5.04, constitutes fraud. For the reasons that follow, I find that the portions of Counterclaim E arising out of a breach of Sections 5.09(b) and Section 5.04 fail to state a claim upon which relief could be granted, and are therefore dismissed. Since KBR has, independent of those breaches, failed to plead fraud with particularity as required by Rule 9(b), the claims of fraud in connection with the LTIP fail as well.

a. Breach of Section 5.09(b)

KBR alleges that ENI's continuing to pay awards under the LTIP post-closing breached Section 5.09(b). Section 5.09(b) provides:

KBR argues that the LTIP constitutes an Employee Benefit Plan as defined in Article I of the SPA and that Section 5.09(b) prohibits ongoing participation in such plans. Thus, KBR argues that by continuing to pay awards under the LTIP, ENI has breached its covenant to ensure that Transferred Employees "cease to participate in each Employee Benefit Plan."142 Further, KBR alleges generally that continuing to grant awards under the LTIP, in violation of its promise not to do so under Section 5.09(b), constitutes fraud.

ENI makes two arguments in response to these claims. First, ENI argues that KBR misreads the plain language of the SPA's definition of Employee Benefit Plan, which clearly indicates that the LTIP is not included in that definition. Second, ENI contends that the language of Section 5.09(b) and the SPA as a whole unambiguously evidences the parties' intent not to include the LTIP within the purview of that section. I agree.

Article I of the SPA defines the term Employee Benefit Plan as including:

ENI reads the italicized language above as precluding from the definition of Employee Benefit Plan the LTIP—which is an ENI-sponsored plan—because ENI is termed "Seller" under the SPA and is not included in the definition of the "R&S Parties."144 Under that reading, a benefit plan must be "sponsored, maintained, contributed or entered into" by an R&S Party to qualify as a defined Employee Benefit Plan, which the LTIP was not. KBR has not alleged in its Amended Counterclaim that an R&S Party had any obligations under the LTIP, which was a benefit plan sponsored by ENI.145 Therefore, argues ENI, the covenant in Section 5.09(b) unambiguously does not apply to the LTIP.

KBR counters that the covenant in Section 5.09(b) specifically applies to "each Employee Benefit Plan sponsored or maintained by Seller or its Affiliates,"146 and thus argues that the SPA is, at least, ambiguous as to the LTIP. However, ENI concedes that the definition of Employee Benefit Plan can include a "Seller"—that is, an ENI—sponsored plan, but "only if that plan is also contributed to or otherwise participated in by R&S."147 In other words, ENI asserts that the definition of Employee Benefit Plan "requires the involvement of an R&S party"—thus excluding the LTIP.148

I find the definition of Employee Benefit Plan unambiguous: it applies only to such plans sponsored by the R&S Parties, the entities being acquired under the SPA. This definition would include any plan sponsored by both ENI and R&S—if any such existed—but not plans solely sponsored by ENI, such as the LTIP. This reading is consistent with the provisions of Section 5.09. Subsection (a) of that section provides that KBR will give credit for service under such plans through closing; subsection (b) provides that KBR will not provide benefits under such plans after closing. The purpose of Section 5.09 is to relieve KBR of responsibility for R&S employee benefit plans, post-closing. This Section does not covenant that ENI will not make payments due to former employees under non-R&S benefit plans. Therefore, continued payments by ENI under the LTIP do not violate the covenant, and the portion of Counterclaim E based on Section 5.09 is dismissed.

KBR also alleges a fraud claim arising out of a breach of Section 5.09. Logically, this claim must fall for the reasons articulated above. In any event, as ENI points out, KBR has failed to meet the pleading standard for fraud under Rule 9(b).149 Because KBR has failed to articulate its fraud claim with respect to Section 5.09(b), other than to state that ENI "knowingly breached" the covenant, this fraud claim is dismissed.

b. Breach of Section 5.04

Next, KBR claims that ENI's continued payment of awards under the LTIP breached Section 5.04 of the SPA. Section 5.04 is a non-solicitation provision within which ENI covenants:

Essentially, KBR argues that ENI's payments under the LTIP have interfered with KBR's relationship with Transferred Employees—former employees of ENI, who still receive or are set to receive grants under the LTIP, but who after the sale became employees of KBR. KBR alleges that it "bargained for R&S employees who would not have an ongoing relationship with ENI after closing," and that, in violation of Section 5.04, "certain key R&S managers who stayed on with R&S and KBR after the sale—most notably, [R&S President] Rodabaugh—continued to participate in the LTIP after the Closing Date."151 According to KBR, these managers "have received and/or will receive payments under the LTIP, including distributions from ENI that may flow from the release to ENI of funds held in the Adjustment Escrow Account and the Indemnity Escrow Account."152 According to KBR, the LTIP's creation of perverse incentives for R&S management constitutes "interference" in breach of Section 5.04. KBR asserts a fraud claim based on these facts as well.

As noted above, ENI's LTIP was disclosed as an Employee Benefit Plan on Schedule 3.17(a). However, KBR contends that it was not disclosed that closing payments under the LTIP would "create[] incentives for those R&S managers that were diametrically opposed to KBR's interests, thereby interfering with KBR's relationship with those employees."153 In other words, although KBR acknowledges that the LTIP was disclosed on Schedule 3.17(a), it alleges that "[b]ecause these improper incentives were not disclosed by ENI and not discovered until much later, KBR misplaced its trust and confidence in Rodabaugh," relying on his advice, which KBR thought was provided in order to perpetuate the interests of R&S, and thus, KBR.154 KBR asserts, however, that Rodabaugh, because of this "hidden interest," actually acted as a "secret agent" of ENI and "conceal[ed] facts surrounding ENI's manipulation of R&S's accounting," resulting in damages to KBR.155

i. Section 5.04 is Unambiguous and Does Not Prohibit the Continuance of Payments Under the LTIP.

ENI moves to dismiss KBR's claim that ENI breached Section 5.04 on several grounds. ENI counters KBR's allegations that it breached this covenant by noting that "Section 5.04 is a standard employee non-solicitation restrictive covenant meant to prevent ENI from poaching away R&S's human capital for some time after the transaction closed."156 ENI contends that the rule of ejusdem generis applies, requiring that "the `interference' subject to this section [] be of the same general kind as inducing an employee to terminate or a contractor to discontinue work."157 Further, ENI notes that, as a restrictive covenant, Section 5.04 should be interpreted narrowly, and that, KBR "seeks to impose liability on ENI for breaching a negative covenant through inaction, a theory that is not viable."158 ENI emphasizes that KBR fails to "allege any facts describing any affirmative act by ENI that could plausibly be construed as `interfer[ing]' with KBR's relationship with R&S's employees."159 Additionally, ENI notes that "[h]ad KBR wanted . . . to otherwise prohibit ENI from having any `ongoing relationship' with the Transferred Employees at all after the close of the transaction, or to prohibit ENI from paying dividends that the participants were entitled to as shareholders of ENI, KBR could have contracted expressly for a covenant or representation in the SPA providing for that."160

I find that the continuance of an employee benefit plan does not fall within the non-solicitation provision of Section 5.04. Section 5.04 is a negative covenant—it prohibits ENI from affirmatively acting in certain ways— yet, there is no indication that ENI has affirmatively altered its behavior since closing. KBR, instead, has alleged that ENI has continued to perform its pre-existing obligation to pay distributions under the pre-existing LTIP. Further, the LTIP and its impact on R&S—specifically, that certain R&S managers were purportedly incentivized to act in a way contrary to R&S and thus, contrary to KBR's interests—is not the sort of interference typically envisioned in a non-solicitation provision like Section 5.04. Far from alleging that R&S managers receiving or set to receive LTIP distributions have been incentivized to leave R&S to work for ENI, KBR has instead alleged that the LTIP gave Rodabaugh an incentive to stay and work mischief; "ENI used the LTIP payments to induce Rodabaugh [during his post-closing employment] to breach his fiduciary duties to KBR and R&S."161 Whether or not the alleged perverse incentives of the LTIP, and ENI's role therewith, could support liability under another theory,162 this is not what the parties contemplated as "interference" under the non-solicitation covenant, and KBR has therefore failed to allege a breach of that covenant. For these reasons, I dismiss the portion of Counterclaim E based on a breach of Section 5.04.

ii. KBR Has Failed to State a Claim for Fraud Based on Section 5.04.

KBR also alleges that ENI failed to disclose that payments under the LTIP would create perverse incentives for R&S management, thereby "interfering" with KBR's employee relationships, and that the failure to disclose those incentives as covenanted constitutes fraud. ENI moves to dismiss these fraud claims because the LTIP was disclosed to KBR, and because "unambiguous contract language precludes these claims."163

First, ENI contends that it "did not represent or warrant that Transferred Employees had no ownership in ENI," pointing to Articles III and V of the SPA and emphasizing that "[n]othing in the SPA requires ENI to refrain from paying post-closing distributions [to] any Transferred Employee or to disclose to KBR any such payment that might be made."164 Further, because KBR includes in its allegations the fact that the LTIP was disclosed as an Employee Benefit Plan on an SPA schedule, ENI maintains that KBR cannot adequately allege that "ENI failed to disclose the existence of the LTIP to KBR before the transaction closed in December 2010."165

Though KBR acknowledges that the Employee Benefit Plan was disclosed on an SPA schedule, it asserts that it does not base Counterclaim E "on the mere existence of the LTIP."166 Instead, KBR contends that the fraud claim is based on "the fact that, under the LTIP, key R&S managers would receive a distribution under the LTIP in connection with the release of funds from the escrow accounts established pursuant to the SPA, despite ENI's specific . . . covenants that those individuals would not . . . receive compensation or benefits under the LTIP after the Closing," and that this covenant was breached.167

I found above that "interference" with employee relationships under Section 5.04 unambiguously does not apply to the LTIP's creation of management incentives. Because KBR has failed to state a claim for breach upon which it may reasonably recover in relation to Section 5.04, and because KBR has failed to plead with specificity a fraud claim with respect to the LTIP independent of the alleged breach, the accompanying fraud claim must also be dismissed.

2. Counterclaim F

In Counterclaim F, KBR alleges that ENI breached Section 3.04(b) of the SPA,168 which represents and warrants that the equity interests, including shares of capital stock, of R&S and its subsidiaries are "not subject to any contractual or statutory preemptive or similar rights."169 To support this allegation, KBR notes that shareholders at one of the three R&S subsidiaries in Poland, known as Separator, held preemptive rights at the time of the closing.170 KBR contends that, at the time of entering the SPA, the parties understood that preemptive rights were "undesirable" and "could constrain KBR's ability to control or divest those subsidiaries."171 Further, KBR alleges that the preemptive rights held by Separator shareholders "rendered Separator and, in turn, R&S Poland less valuable than if they had been as warranted by ENI."172 KBR also alleges that "KBR has since divested R&S Poland for $5,018—effectively a total loss directly attributable to ENI's false representation."173

In opposition, ENI asserts that Counterclaim F should be dismissed because KBR has failed to sufficiently allege that the misrepresentation caused damages.174 Specifically, ENI notes that KBR fails to "even allege that the minority shareholders exercised or even threatened to exercise the preemptive rights in their shares to KBR's detriment, or how that resulted in any damage to KBR, much less all three of R&S's Polish subsidiaries being reduced to worthlessness."175 ENI emphasizes that a disclosure attached to the SPA noted that 3,938 of the 4,000 outstanding Separator shares were held by an R&S entity, with "the remaining 62 shares held by four employees and an employee's widow."176 ENI questions how the purported preemptive rights of these minority shareholders could lead to the "obliteration of the entire value of R&S Poland, including the entire value of two other Polish subsidiaries that were wholly-owned by R&S . . . ."177

The allegations of Counterclaim F are that ENI breached a representation that no preemptive rights exist, and that it was damaged as a result, because it received a less valuable property than that for which it contracted. Rule 12(b)(6) requires notice pleading, not a statement of damages with precision.178 Therefore, ENI's Motion to Dismiss with respect to this claim is denied.

3. Counterclaim G

KBR alleges, in Counterclaim G, that ENI breached Section 3.01(b) of the SPA, which represents and warrants that R&S and its subsidiaries are "duly registered or qualified to conduct business,"179 because R&S Canada lacked the authorization to practice professional engineering in British Columbia.180 KBR alleges that this representation also breached Sections 3.08 and 3.26181 of the SPA; those sections, however, involve Non-Fundamental Representations, and are time-barred for the reasons discussed above. Therefore, unless KBR has stated a claim for breach of Section 3.01(b), Counterclaim G must be dismissed.

KBR argues that the representation in 3.01(b), that R&S's subsidiaries were "duly registered or qualified to conduct business," was false, because R&S Canada had, as of the closing, failed to apply for "a certificate of authorization to practice professional engineering in British Columbia as required by the British Columbia Engineers and Geoscientists Act."182 According to KBR, this certificate of authorization "is fundamental . . . because engineering services are at the core of its business" and lacking this certificate "limits R&S Canada's rights under British Columbia law," thus making R&S Canada a less valuable entity than it was warranted to be.183 Further, KBR alleges that R&S Canada's Elkview project "is estimated to lose millions of dollars," a substantial loss that "would have been completely avoided or, in the alternative, substantially mitigated if ENI had disclosed the fact that R&S Canada lacked the certificate of authorization required by British Columbia law because KBR would not have closed on the acquisition as structured if it had known" otherwise.184

ENI contends that the allegations of Counterclaim G state a claim for breach, if at all, of Section 3.08, and not Section 3.01, and that any claim under the former section is time-barred. Section 3.01(b) states that "[e]ach of the R&S Parties is duly registered or qualified to conduct business . . . ."185 Section 3.08(c)(i) provides that "[t]he R&S Parties are in possession of and in material compliance with all material consents, licenses, permits, authorizations and approvals issued or granted by, and have made all registrations or filings . . . as are necessary for the conduct of the Business . . ."186 and Section 3.08(a) reads "[e]ach R&S Party is in compliance in all material respects with all laws applicable to the ownership and operation of the Business."187 "Business" is defined in the SPA as "the businesses carried on by the R&S Parties as of the date of this Agreement, as conducted consistent with past practices."188

ENI asserts that a certificate of authorization to practice professional engineering "is not required for R&S Canada to be qualified to conduct business in Canada or British Columbia," and that Section 3.01(b) thus "cannot be read to include an obligation to apply for or obtain a certificate of authorization to practice professional engineering, as KBR alleges, because that obligation is covered by the separate representation in Section 3.08 of the SPA."189 ENI notes, in addition, that "[b]y creating this separate category of operation-specific representations in Section 3.08, the parties demonstrated the intention to exclude permits and authorization certificates from the narrower and Fundamental Representation in Section 6.01(a)(i) that the R&S entities sold to KBR were properly organized and in good corporate standing in the jurisdictions where they are authorized to conduct business."190

KBR attempts to counter this interpretation of the SPA by asserting that, because the definition of "Business" is "the businesses carried on by the R&S Parties . . ." the term "Business" is merely "the sum total of each `business' that the R&S Parties collectively carry on."191 Thus, according to KBR, because R&S Canada "conducts its `business'—the practice of professional engineering in, among other locations, British Columbia, where its single largest project is located"—ENI effectively represented in Section 3.01(b) that "R&S Canada was registered or qualified to practice professional engineering in British Columbia."192 I find that KBR has failed to present a reasonable interpretation of Sections 3.01 and 3.08.

Under Section 3.01, ENI warrants that R&S Canada is "registered or qualified and . . . in good standing" to do business as a Canadian entity. That is the Fundamental Representation under the SPA, and the Amended Counterclaim does not allege that R&S Canada is not so qualified. The SPA then provides, in Non-Fundamental Representation 3.08(c), that R&S Canada "is in possession of and in material compliance with all material consents, licenses, permits, authorizations and approvals" from any "Governmental Authority," as necessary to "the conduct of the Business," "Business" being defined as R&S business being pursued as of the date of the Agreement.193 Read together, the two sections are not ambiguous: Section 3.01 provides that as of closing, R&S was an entity qualified to do business in Canada, which it was; Section 3.08(c) warrants that R&S Canada had the licensure to carry on its current business, which KBR alleges it did not. Thus, Counterclaim G states a claim for breach of Section 3.08, which is time-barred, rather than Section 3.01, which is not. Under KBR's proffered construction, Section 3.01 would include, under the rubric "registered or qualified to conduct business," all of the warranties under Section 3.08(c), leaving that section surplusage. Adopting such a reading would therefore transgress the cannon of construction and would, by eliminating the agreed-to limitation period for this claim, fundamentally and impermissibly change the bargain between the parties. For these reasons, that portion of Counterclaim G purportedly relating to breach of a Fundamental Representation is dismissed.

D. Rescission

ENI challenges KBR's attempts to rescind the transaction. Rescission is not a cause of action but a remedy available only where facts indicate equity so requires.194 Because such an inquiry is fact specific, I decline to address it in connection with this Motion to Dismiss, except to say that KBR's burden to establish an entitlement to rescission, in light of the likely change in circumstances due to the passage of time here, is heavy.

IV. Conclusion

For the foregoing reasons, ENI's Motion to Dismiss is denied as to Counterclaim D; Counterclaim F; and allegations of fraud based on the Non-Fundamental Representations and made in connection with Counterclaims A, B, C, and E. ENI's Motion is granted as to the remainder of KBR's Counterclaims. An appropriate Order accompanies this Memorandum Opinion.