John Fredriksen-backed rig investment company Northern Drilling will seek permission to appeal against a ruling by a London tribunal after losing its initial claim against Hanwha Ocean, formerly DSME, over cancelled resale contracts for two ultra-deepwater drillships.
The Oslo-listed company said in a filing that it plans to challenge the ruling “on grounds of serious irregularity”.
“If the court grants permission to appeal the awards on a point of law, an appeal hearing will follow. However, no such permission is required to challenge the awards on grounds of serious irregularity,” Northern Drilling noted.
Northern Drilling has no drilling units 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 unit, previously known as West Cobalt, was terminated in October 2019.
The company revealed plans to raise fresh funds through one or more equity placements, with the first one expected to be between $3m and $3.5m, bus said that the total funding needed to reach a conclusive outcome “is expected to be significantly higher”.
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.
