The federation responsible for the All Blacks says it has launched legal action against the chemicals firm founded by British billionaire Sir Jim Ratcliffe after alleging that the first instalment of 2025 sponsorship money due under a six-year agreement struck in 2021 had not been paid.
It follows the severing of ties between Ineos and Sir Ben Ainslie at the head of its America's Cup sailing team last month.
New Zealand Rugby said in a widely reported statement: "New Zealand Rugby is disappointed that Ineos has breached its sponsorship agreement.
"Most recently, it failed to pay the first instalment of the 2025 sponsorship, confirming its decision to exit our six-year agreement.
"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."
Ineos released a statement later on Tuesday which read: "Ineos has greatly valued our sponsorship of New Zealand Rugby, having contributed over US$30 m 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.
"We remain in ongoing discussion with New Zealand Rugby."
There is no longer any mention of its All Blacks partnership on the Ineos Sports home page.
Ineos' co-ownership of United has been turbulent.
Besides on-pitch struggles Ineos and Ratcliffe have also drawn criticism over a series of cost-cutting measures, including a redundancy programme and the mid-season withdrawal of concessionary ticket prices.
Their cycling team has also failed to replicate its success when branded as Sky while Ainslie was "astounded" at the split. Ratcliffe's other socer team, Nice, however, are doing well in the French league.
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