John Fredriksen's Northern Drilling has torn up a deal for a drillship resale in South Korea.
The company said the decision to cancel the ultra deepwater West Cobalt was due to "various reasons including repudiatory breach of contract by DSME."
Northern has already made advance payments of $49.2m, and will now claim a refund of the instalments paid, plus interest and damages, it added.
The vessel is one of two acquired by the company last year for $592m after they were cancelled by Fredriksen's Seadrill, which was undergoing a restructuring.
The 68,000-gt DMSE pair were ordered in July 2013 for KRW 1.25 trillion ($1.16bn). They are due to be delivered next year.
In May, the company said it had declared an option for sistership Cobalt Explorer at the yard in a deal worth $350m.
DSME agreed flexible delivery until the end of the first quarter of 2021.
The vessel is being purchased at close to a 50% discount after the previous owner ordered it for $660m.
