Mindef Claiming RM1 Bil in Compensation from Norwegian Firm Over Missile Deal

20 Mei 2026

NSM stealth missile, the NSM utilizing a U.S.-made gyroscope component. Gyroscopes are used to measure orientation angles and the rate of change in missiles with the data used to keep the missile on course. U.S. is now restricting its component exportation of to third parties (image: Akela Freedom)

LUMUT (May 19): The Ministry of Defence (Mindef) has issued a notice of demand to a Norwegian manufacturer following the cancellation of an export licence for the Naval Strike Missile (NSM) anti-ship and land-attack missile system.

Minister Datuk Seri Mohamed Khaled Nordin said the notice, seeking compensation for both direct and indirect losses, was sent to the company on Tuesday.

“We are claiming both direct and indirect costs. The direct cost amounts to EUR126 million (RM583.47 million), which has already been paid, and we are also seeking substantial indirect costs, bringing the total claim to about RM1 billion.”

He said this to reporters after a working visit to inspect the progress of the littoral combat ship (LCS) project at the Lumut Naval Shipyard at the Royal Malaysian Navy (RMN) base here on Tuesday.

Also present was Navy chief Admiral Tan Sri Dr Zulhelmy Ithnain.

Mohamed Khaled said the direct claim of EUR126 million represented 95% of payments already made under the RM634.7 million contract involving weapons systems for the LCS fleet, as well as two other naval vessels, KD Jebat and KD Lekiu.

He said the Norwegian government had unilaterally revoked the export licence without prior discussions with Malaysia, despite the government having fulfilled all contractual obligations.

“We have paid 95% of the contract value. But at the final stage, based on the chronology of events, the Norwegian government cancelled the export licence for the system unilaterally.

“They refused to issue the export licence because their new policy restricts the export of sensitive defence technology only to allies and close strategic partners.

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

Mohamed Khaled said the cancellation had triggered a crisis of confidence over international commitments and should serve as a lesson for Malaysia and its Asean partners in future dealings with Norway.

“When commitments can be cancelled unilaterally, confidence in the entire system will begin to erode. We hope Asean countries and nations that are not close allies of Norway will learn from Malaysia’s experience and avoid purchasing or dealing with Norway.

“For the Defence Ministry, I have also reminded them that future purchases, whether ammunition or otherwise, should no longer be sourced from Norway. We must be cautious when procuring from countries that may take similar action against us,” he added.

(Bernama)