The Seadrill Hercules ruling has been upheld by Norway’s Borgarting Court of Appeal, with subsidiaries of Seadrill ordered to pay approximately NOK 525 million ($55 million) to a rig-owning subsidiary of SFL Corporation over the condition of the semi-submersible drilling rig Hercules when it was returned in December 2022.
The appeals court unanimously found that the drilling contractor had breached its contractual obligations when redelivering the rig. The award includes compensation, accrued late-payment interest and legal costs.
The judgment, announced by SFL Corporation on 13 October 2026, largely upholds an earlier decision by Oslo District Court and requires Seadrill to cover the rig owner’s legal costs for proceedings before both courts.
The dispute concerns the condition in which Hercules, formerly known as West Hercules, was returned to SFL Corporation following the termination of its charter arrangement in December 2022.
The rig owner maintained that the unit did not meet the redelivery conditions specified in the contract. The claim was brought by SFL Hercules Ltd., the rig-owning subsidiary, against certain subsidiaries of Seadrill.
The legal proceedings began in March 2023, when Seadrill was served with the claim filed in Oslo District Court.
In February 2025, the district court ruled in favour of the rig owner and ordered Seadrill to pay approximately $37 million in compensation, together with around $11 million in interest and legal costs. The total award at that stage was approximately $48 million, according to Seadrill’s financial disclosures filed with the US Securities and Exchange Commission.
Seadrill appealed the district court’s ruling in March 2025. The subsequent appeal proceedings began in April 2026.
The Borgarting Court of Appeal has now maintained the central finding that the rig was not returned in accordance with the contractual requirements. The total amount payable has increased to approximately $55 million as additional interest accrued following the original judgment.
The appeals court also awarded the SFL Corporation subsidiary its full legal costs for the proceedings before both Oslo District Court and Borgarting Court of Appeal.
The commercial relationship between the parties changed during Seadrill‘s financial restructuring. The drilling contractor emerged from Chapter 11 bankruptcy protection in February 2022, and Odfjell Drilling entered into arrangements with SFL Corporation in May of that year to take over management and marketing responsibilities for Hercules.
The rig is a sixth-generation semi-submersible drilling unit built in 2008 to the GVA 7500 design. It is capable of operating in water depths of up to 10,000 feet and has a maximum drilling depth of 35,000 feet. Accommodation is provided for 180 personnel.
Following the appeals court decision, SFL Corporation said it would review the judgment before determining any further action.
Either party may appeal to the Supreme Court of Norway within one month of formal service of the judgment. However, an appeal can proceed only if permission is granted by the Supreme Court’s Appeals Selection Committee.
The latest ruling establishes the payment obligation at the appeals court level. Whether the case proceeds to further judicial review will depend on any subsequent appeal application and the Supreme Court’s decision on whether to hear it.
