Long battle expected for compensation over scrapped missile deal

In May, the Malaysian government terminated the export license for the NSM system that had been contracted by Malaysia in 2018 to arm its naval vessels. This decision was made following a request from the Norwegian government, which has not been amenable to offering any assistance in the matter, despite being the party responsible for the cancellation of the agreement at the eleventh hour, according to defense minister Khaled Nordin.

Khaled highlighted that they have approached the issue at various governmental levels, including reaching out to the prime minister, foreign minister, and directly to the Norwegian government, but received no support. Consequently, Malaysia is compelled to lodge a claim against Kongsberg Defence & Aerospace AS for the loss incurred.

Malaysia had earmarked the system for six littoral combat ships, but the Norwegian government has stipulated that it would only permit defense technology exports to its "allies and closest partners." The Malaysian government is seeking compensation exceeding RM1 billion from Kongsberg, accounting for both direct and indirect losses, as they have already remitted 95% of the RM634 million procurement cost.

In June, Khaled stated that Malaysia is in the process of evaluating potential new missile systems from nations such as Italy, Japan, France, Turkey, and South Korea. Earlier today, the minister indicated that the government is contemplating allocating funds surpassing RM1 billion for the procurement of these alternative missile systems.