John Fredriksen’s rig investment company, Northern Drilling, has lost a legal battle with Daewoo Shipbuilding & Marine Engineering (DSME), now Hanwha Ocean, over cancelled resale contracts for two ultra-deepwater drillships.
In 2021, Northern Drilling terminated deals with DSME for the West Libra and West Aquila, citing delays in delivery as well as a repudiatory breach of contracts. The deal was struck in May 2018 at $296m for each drillship, with deliveries scheduled for January and March 2021 or earlier.
The company’s subsidiaries made advance payments of $180m and said they would claim a refund of the installment paid, plus interest and damages. DSME disputed these claims and commenced arbitration proceedings in London, claiming it is entitled to retain the amount paid and apply it against losses as a result of the termination.
Northern Drilling said in an Oslo filing that the tribunal had dismissed its units’ claims and that Hanwha’s claims against them for losses arising from the terminations, interest, and costs will be determined at a future hearing.
“West Aquila and West Libra are disappointed with the Tribunal’s determination and are currently considering whether to appeal. We will revert with further information once a decision on whether to appeal has been made,” the company said.
As of June last year, Northern Drilling did not have any drilling units in operation or under construction. The company’s activities primarily relate to claim receivables held in connection with the termination of the resale contracts for three drilling units. The deal for the third unit, previously known as West Cobalt, was terminated in October 2019.
