Delaware Chancery Court - not the U.S. Supreme Court - will be where the action is as one-time merger partners Anthem (ANTM - Get Report) and Cigna (CI - Get Report) wage a legal battle over the fallout from the collapse of their $54 billion deal.

Anthem said Friday it was terminating the health insurers' merger agreement and that Anthem "intends to vigorously pursue" damages claims against Cigna for failing to fulfill its contractual obligation use its best efforts to win antitrust approval for the deal.

"Cigna's repeated willful breaches of the merger agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages," Anthem said.

An Anthem official on Friday declined to say what amount of damages the company is seeking from Cigna.

Anthem's decision to terminate the merger follows a decision by Delaware Chancery Judge J. Travis Laster on Thursday refusing the company's request to extend his previous order keeping Cigna in the deal for another 60 days.

In a hearing on May 8, Anthem had asked Laster to extend until July 7 a ban on Cigna Corp. (CI) leaving the deal. The Delaware case began in February when Cigna filed suit in Delaware Chancery Court asking to be freed from the deal and seeking a ruling that it is entitled to a $1.85 billion reverse breakup fee and $13 billion in damages.

Laster did stay his order until noon on Monday, however, to allow Anthem time to decide whether to appeal to Delaware's Supreme Court.

Both a federal district court and an appeals had supported the Department of Justice's lawsuit seeking to stop the deal and last week Anthem asked the U.S. Supreme Court to review those rulings. But the federal case will cease now that Anthem has terminated the merger.

After Anthem announced it would terminate the merger, Cigna issued its own statement, reiterating its contention that "Anthem willfully breached those obligations and as a result the transaction did not receive the requisite regulatory approvals."

Cigna said it seeks prompt payment of the $1.85 billion reverse termination fee and will continue pursuing claims for additional damages of over $13 billion against Anthem for harm allegedly caused Cigna and its shareholders.

Cigna also said it plans to immediately increase its open market share repurchase activity as a result of the termination of the transaction. Cigna's board had previously authorized share repurchase of $3.7 billion, and through Thursday the company had repurchased approximately 2.4 million shares for approximately $360 million. Cigna said it expects to repurchase at least half of the remaining authorization by December 31, 2017.

Cigna is scheduled to discuss its strategic growth plan during an investor day on June 21 in New York City.

The two insurers' legal battle contrasts with the clean breakup carried out by two other health insurers, Aetna (AET) and Humana (HUM - Get Report) , which terminated their merger agreement in the wake of a federal judge's ruling in January blocking that $37 billion deal.

Aetna agreed to pay Humana a $1 billion reverse breakup fee as required by the companies' July 2015 merger agreement. After taxes Humana got to keep $630 million.

This article was originally published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.