The Malaysian Defence Ministry has confirmed that Norway’s Kongsberg Defence & Aerospace AS (KDA) has requested discussions over a RM1.06 billion compensation claim following the cancellation of the Naval Strike Missile (NSM) procurement for the Royal Malaysian Navy (TLDM).
Defence Minister Datuk Seri Mohamed Khaled Nordin said the ministry is open to engagement with the company but stressed that any talks must not be used as a tactic to delay the resolution of the claim.
“The company, KDA, has requested to discuss with us but even though we allow discussions, we do not want it to be used as a tactic to delay the claim process that has been made earlier,” he said after attending the Program Ilmiah Keagamaan Masyarakat (PIKAT) at Felda Air Tawar 2.
“We are always aware and cautious if such tactics are used so that we do not get trapped,” he added.
The dispute stems from the cancellation of the NSM anti-ship missile system, originally contracted in April 2018 between TLDM and KDA, valued at €124 million (RM571.9 million), intended to equip six Littoral Combat Ships (LCS).
Following Norway’s reported decision to revoke the export licence for the NSM system and its associated launchers on national security grounds, Malaysia subsequently filed a RM1.06 billion claim against KDA.
The claim includes approximately €129.86 million (about RM604 million) in direct costs already paid by the government, as well as €96.26 million (about RM448.1 million) in indirect costs linked to broader implications and disruptions caused by the failed delivery.
In parallel, the Defence Ministry said a Royal Malaysian Navy evaluation team has been formed to identify a suitable replacement missile system from four countries, including Türkiye, South Korea and two European suppliers.
Khaled said the review process is aimed at ensuring Malaysia selects the most suitable alternative capability to replace the cancelled NSM system and maintain operational readiness for the navy’s Littoral Combat Ship programme.
The development adds another layer to Malaysia’s ongoing defence procurement adjustments following the cancellation of the NSM system, which was originally intended as a key component of the LCS capability upgrade. - July 5, 2026
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