John Fredriksen-backed rig investment company, Northern Drilling, has been denied the right to appeal an arbitration decision that favoured Daewoo Shipbuilding & Marine Engineering (DSME), now Hanwha Ocean, over cancelled resale contracts for two ultra-deepwater drillships.
Northern Drilling said in a stock exchange filing its applications to the Technology and Construction Court for leave to appeal the awards on points of law have been refused and the company’s applications challenging the awards on grounds of serious irregularity have been dismissed.
In 2021, Northern Drilling terminated deals with former DSME for the West Libra and West Aquila drillships, 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’s claims were dismissed in September, while the decision on Hanwha’s claims has yet to be determined.
Northern Drilling has no drilling rigs in operation or under construction, and its activities primarily relate to claims from the termination of the contracts for three drilling units. The deal for the third rig, previously known as West Cobalt, was terminated in October 2019. Arbitration proceedings for this rig are ongoing and are still in the early stages.
The company said it is considering the latest ruling.
