THE Government is preparing to pursue compensation claims against a Norwegian defence contractor following the collapse of a missile supply agreement linked to the Royal Malaysian Navy’s Littoral Combat Ship programme, after Norway reportedly failed to issue the necessary export licence for the weapons system.
Defence Minister Datuk Seri Mohamed Khaled Nordin said the government is currently assessing legal avenues to recover payments already made under the contract, as well as broader losses arising from the alleged breach of agreement.
He disclosed that a special committee has been established to evaluate the legal process and determine the scale of reasonable compensation claims beyond the funds previously disbursed.
“Although the ships can be completed, they are still not equipped with the surface-to-surface missile system that was ordered back in 2018.
“So, we need to look for another missile system as a replacement. If a new system is used, it will require retraining and a process of integration with the other systems on the ship.
“All of that will be taken into account as losses resulting from the breach of contract,” he told reporters.
Khaled said the overall contract exceeded RM600 million in value, with the Malaysian government having already paid approximately 95 per cent of the agreed amount through staged project payments.
He warned that replacing the missile system would present significant technical and operational challenges, as naval defence assets are designed around highly specific integration requirements.
“The process of obtaining a replacement system is not something simple because defence assets must be built according to specific specifications and every system must communicate with one another.
“On a ship there are various communication and electrical systems originating from different companies. The missile system must be capable of communicating and integrating with all existing systems.
“So, the development of the new system will take time, but we are looking for ways to accelerate the process,” he said.
Despite the disruption, the minister stressed that the government intends to ensure the replacement programme does not delay the expected delivery schedule of the Littoral Combat Ships, with the first vessel still targeted for handover in December.
He said the ship platforms themselves have already been completed, including the installation of related systems supplied by the Norwegian company, with only the missile component still outstanding.
“However, the government will ensure that the replacement with a new system does not affect the delivery schedule of the ships, which are expected to be handed over this December.
“I myself will travel to Lumut this Tuesday to obtain more detailed information regarding the replacement process for the system,” he said.
Mohamed Khaled also backed remarks made earlier by Prime Minister Anwar Ibrahim, who criticised Norway’s actions and described the move as inconsistent with the principles expected of a nation that advocates international law and good bilateral relations. - May 14, 2026
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