New Zealand Rugby (NZR) has launched legal action against Ineos after the company, which is founded and run by the British billionaire Sir Jim Ratcliffe, allegedly dropped a sponsorship agreement with three years remaining.

Ineos branding appears on jerseys and other clothing worn by the men’s and women’s senior sides – the All Blacks and Black Ferns – as well as the New Zealand Māori team and New Zealand sevens teams after a deal signed in 2022, which was due to continue until 2028.

New Zealand Rugby said on Tuesday the first instalment of the 2025 sponsorship had not been paid by the global chemical company and it had no choice but to proceed with legal action. Ineos, however, said it remained in ongoing discussion with NZR and had sought to “adjust its sponsorship”, blaming the “deindustrialisation of Europe” as the catalyst for cost-cutting measures.

NZR’s chief communications officer, Paul Stevens, said the governing body “is disappointed that Ineos has breached its sponsorship agreement. Most recently, it failed to pay the first instalment of the 2025 sponsorship fee, confirming its decision to exit our six-year agreement.”

Stevens added: “Having learned of Ineos’ decision to walk away three years early, we have moved to protect the interests of New Zealand Rugby and the wider game. We have been left with no option but to launch legal proceedings to protect our commercial position.”

The sponsorship deal is believed to be worth about US$4.5m per year (£3.64m/NZ$8m). Stevens added that NZR “is actively pursuing new commercial opportunities and global interest in the All Blacks and other teams in black remains high”.

Ratcliffe is a minority shareholder in the Premier League football club Manchester United, and his company sponsors the British America’s Cup sailing team and the Ineos Grenadiers professional cycling team.

Ineos, which also owns the European football teams Nice (France) and Lausanne-Sport (Switzerland), responded in a statement which read: “INEOS has gratefully valued our sponsorship of New Zealand Rugby, having contributed over US$30m [$NZ53.6m; £24.1m] to the teams in recent years.

“However trading conditions for our European businesses have been severely impacted by high energy costs and extreme carbon taxes, along with much of the chemicals industry in Europe, which is struggling or shutting down. We are witnessing the deindustrialisation of Europe.

“As a result we have had to implement cost-saving measures across the business. We sought to reach a sensible agreement with the All Blacks to adjust our sponsorship in light of these challenges.

“Unfortunately, rather than working towards a managed solution, New Zealand Rugby have chosen to pursue legal action against their sponsor.”