Malaysia's Defense Minister Mohamed Khaled Nordin delivers his remarks during the opening session of the Association of Southeast Asian Nations (ASEAN) Defense Ministers’ Meeting in Kuala Lumpur on Oct 31, 2025. (Photo: Reuters/Dita Alangkara via Pool)

Malaysia seeks over US$251 million in compensation from Norwegian firm over scrapped missile deal: Minister

This comes after Norway confirmed that it had revoked the naval strike missile system’s export licences, citing tighter restrictions on some of its “most sensitive” defence technologies and saying that exports would be limited to its “allies and closest partners”.

19 May 2026, 08:16 · CNA · Join

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KUALA LUMPUR: Malaysia is seeking more than RM1 billion (US$251.5 million) in damages from a Norwegian defence firm after it revoked export licences for a naval missile strike system intended for the Southeast Asian country’s combat ships.

Malaysian Defence Minister Khaled Nordin said on Tuesday (May 19) that the government has issued a notice of demand to the Norwegian firm Kongsberg Defence & Aerospace (KDA), seeking direct and indirect compensation after Malaysia paid 95 per cent of the defence contract value before Norway unilaterally revoked the export licences.

“We have made payments amounting to 95 per cent of the total procurement value of RM634 million,” Khaled reportedly told local media at a press conference after a visit to a naval base in Lumut, Perak.

The payments were for weapon systems used to equip the country’s littoral combat ship (LCS) fleet, and two other naval vessels, KD Jebat and KD Lekiu, reported The Edge Malaysia.

“We are claiming direct costs, which is the amount already paid of RM583 million, as well as indirect costs, bringing the total claim to more than RM1 billion,” said Khaled.

Malaysia’s defence ministry had said on May 7 it would seek clarification from Oslo over the decision, which officials have said was made just days before the missiles were scheduled for delivery in March.

Khaled on Tuesday stressed that Malaysia will no longer procure defence-related products from Norway after this episode.

“We have informed the ministry that any future purchases, whether ammunition or other defence assets, should no longer be sourced from Norway," he was quoted as saying by local news outlet New Straits Times (NST).

Khaled warned that the incident has strengthened Malaysia’s determination to reduce dependence on foreign suppliers and ramp up its local defence capabilities.

"What has happened to us is not merely a defence procurement issue. It reflects a larger problem: the erosion of trust in international relations," he was quoted as saying by NST.

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The minister added that about 30 per cent of the combat ship project components were locally sourced and expressed hope that the percentage could be increased in future naval projects.

"This has always been our goal, and this incident involving Norway will push us to further strengthen our focus on ensuring we are not overly dependent on foreign countries," said Khaled.

“In addition, the government must be more cautious in procurement dealings with other countries that could potentially take similar action against Malaysia.”

Khaled reportedly said he hoped that members of the Association of Southeast Asian Nations (ASEAN) regional bloc that are not close allies of Norway would learn from Malaysia’s experience and avoid dealing with the Scandinavian nation.

“They refused to issue the export licences because their new policy restricts the export of sensitive defence technology only to allies and close strategic partners.” Khaled was quoted as saying by The Edge Malaysia.

“Meaning that the export is limited to members of NATO and countries regarded by Norway as strategic partners,” he said, referring to the North Atlantic Treaty Organization.

KDA said in 2018 it had agreed to a 124 million euros contract with the Royal Malaysian Navy to supply naval strike missiles for six LCSs.

Norway confirmed on May 15 that it revoked the export licences for the naval strike missile system, citing tighter restrictions on some of its “most sensitive” defence technologies and that exports would be limited to its “allies and closest partners”.

“This is solely due to Norway’s application of the export control regulations and it is regrettable that this affects Malaysia,” its foreign ministry added.

Earlier on May 14, Malaysia’s Prime Minister Anwar Ibrahim voiced his “vehement objection” to what he described as Norway’s “unilateral and unacceptable decision” to revoke the export contracts, in a telephone call with Norwegian counterpart Jonas Gahr Stoere.

"Malaysia has honoured every obligation under this contract since 2018: scrupulously, faithfully and without equivocation," Anwar said on Facebook.

"Norway, it appears, has not felt compelled to extend us the same courtesy and demonstration of good faith,” he added.

Anwar said that he had told Stoere that Norway’s move would have grave consequences for Malaysia's defence operational readiness and its LCS modernisation programme would carry “broader ramifications for the regional balance".

Khaled previously said on May 14 that the defence ministry had formed a special committee to assess the scope of legal action against Norwegian firm KDA, citing the nearly 95 per cent of contract value paid that amounted to more than RM500 million.

He also said that the first indication of issues with the naval strike missile system procurement emerged when the delivery was not fulfilled in March.

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