Malaysia seeks $250 million damages from Norwegian supplier for revoked missile deal

Malaysia will no longer procure defense-related products from Norway after this episode, Defense Minister Khaled Nordin stressed.

Defense Minister Khaled Nordin at the Lumut Navy Base shipyard to review the progress of the Littoral Combat Ship project. Photo from Facebook

Manuel Mogato | May 20, 2026

KUALA LUMPUR — Malaysia’s defense minister said Kuala Lumpur would seek a $250 million Malaysia is in damages from a Norwegian defense contractor after it revoked a deal for a naval missile strike system.

Defense Minister Khaled Nordin said they had issued a notice of demand to Kongsberg Defence & Aerospace (KDA) for direct and indirect compensation.

“We have made payments amounting to 95 per cent of the total procurement value,” Khaled said in a news conference.

“We are claiming direct costs, which is the amount already paid as well as indirect costs,” he added.

Malaysia will no longer procure defense-related products from Norway after this episode, Khaled stressed.

Khaled said the canceled missile deal strengthened Malaysia’s determination to reduce dependence on foreign suppliers and ramp up its local defense capabilities.

“What has happened to us is not merely a defense procurement issue. It reflects a larger problem: the erosion of trust in international relations,” he added.

Khaked said about 30 per cent of the combat ship project components were locally sourced.

Khaled said other Association of Southeast Asian Nations (ASEAN) states should learn from Malaysia’s experience and avoid dealing with Norway.

Norway had agreed to sell a 124 million euros contract with the Royal Malaysian Navy to supply naval strike missiles for six Littoral Combat Ships (LCS) in 2018.

In May 2026, Norway revoked the missile contract due to tighter restrictions on some of its “most sensitive” defense technologies and that exports would be limited to its “allies and closest partners.”