An arbitration tribunal has ruled in favor of South Korean company Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) in a drillship order cancellation case involving Northern Drilling, an offshore drilling contractor owned by billionaire John Fredriksen.
Northern Drilling had canceled orders for the West Aquila and West Libra drillships in 2021, which were originally placed with Daewoo Shipbuilding & Marine Engineering (DSME) in 2013. Northern Drilling cited delivery delays and a repudiatory breach of contract as reasons for the cancellation and sought a refund for the installments paid.
DSME challenged Northern Drilling's cancellation, leading to arbitration proceedings in London. The tribunal's verdict has now favored Hanwha Ocean, dismissing Northern Drilling's claims.
The tribunal will determine the losses, interest, and costs claimed by Hanwha Ocean against Northern Drilling's West Aquila Inc. and West Libra Inc. subsidiaries in a future hearing.
Northern Drilling has expressed disappointment with the decision and is considering whether to appeal. This arbitration was not the first instance of drillship order cancellations between Northern Drilling and DSME, as a similar case occurred in 2019.
The West Aquila drillship, now known as Deepwater Aquila, was subsequently acquired by offshore drilling company Transocean and secured a three-year contract for offshore work in Brazil.
The arbitration tribunal's verdict settles one aspect of the dispute, while the determination of claims for losses and costs remains pending.