Malaysia's government is demanding $251 million in compensation from Norwegian firm Kongsberg Defense & Aerospace AS, following Norway's abrupt revocation of an export permit that derailed a naval missile defense agreement for the country's combat ships.
Official Demand for Compensation
Defense Minister Mohamed Khaled Nordin announced on Tuesday that a formal notice of demand had been issued to Kongsberg after the cancellation prevented the delivery of the Naval Strike Missile (NSM) system and launcher components, for which Malaysia had already made substantial payments.
“We are claiming both direct and indirect costs. The direct cost amounts to 126 million euros ($146 million) which has already been paid,” Khaled stated. “We are also seeking substantial indirect costs, bringing the total claim to about 1 billion ringgit ($251 million).”
The indirect costs encompass the removal of missile mounting systems already installed on navy vessels and the integration of replacement systems, he explained.
Background of the Deal
Malaysia had signed a contract for the NSM anti-ship missile system in 2018, intended to equip its new class of littoral combat ships as part of a broader naval modernization program.
Norway's foreign ministry justified the revocation by stating that the government had strengthened oversight, restricting sales of its most sensitive defense technologies to allies and closest partners. The cancellation drew sharp protests from Malaysian authorities.
Khaled described the move as a severe 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 reached for comment immediately.
