Malaysia's government announced on Tuesday that it is seeking $251 million in compensation from Norwegian company Kongsberg Defense & Aerospace AS, following Norway's abrupt revocation of an export permit that derailed a naval missile defense deal for Malaysia's combat ships.
Government's Demand
Defense Minister Mohamed Khaled Nordin stated that the government had issued a formal notice of demand to Kongsberg after the cancellation, which blocked the delivery of the Naval Strike Missile (NSM) system and launcher components that Malaysia had largely paid for. "We are claiming both direct and indirect costs. The direct cost amounts to 126 million euros ($146 million) which has already been paid," he said. "We are also seeking substantial indirect costs, bringing the total claim to about 1 billion ringgit ($251 million)."
The indirect costs include the removal of missile mounting systems already installed on the navy's vessels, as well as the integration of replacement systems, he explained.
Background of the Deal
Malaysia signed a deal for the NSM anti-ship missile system in 2018, intending to arm its new class of littoral combat ships under a broader naval modernization program. However, Norway's foreign ministry stated that the government had strengthened oversight, restricting sales of its most sensitive defense technologies to allies and closest partners. The cancellation sparked sharp protests from the Malaysian government.
Erosion of Trust
Khaled described the move as a serious breach of trust that could undermine confidence in international defense procurement deals. "What happened to us is not just a defense procurement issue, but reflects an erosion of trust in international relations," he said. "When such commitments can be unilaterally revoked, confidence in the entire system begins to erode."
Norway's foreign ministry acknowledged receiving queries from The Associated Press but has not provided a response. Kongsberg officials could not be immediately reached for comment.
