Norway's Kongsberg Defence & Aerospace (KDA) has asked to meet with Malaysia to discuss a RM1.06 billion compensation claim following the cancellation of a Naval Strike Missile (NSM) contract for the Royal Malaysian Navy [1, 2, 3, 4].
The original NSM contract was signed in April 2018, valued at €124 million (about RM571.9 million), to equip six Littoral Combat Ships (LCS) [1, 2, 3, 4]. The contract was scrapped after the Norwegian government revoked the export licence for the NSM missiles and launch systems on security grounds [1, 2, 3, 4]. Malaysia then filed a RM1.06 billion claim against KDA, covering around €129.86 million (RM604 million) in direct payments already made and €96.26 million (RM448.12 million) in indirect costs from impacts and knock-on effects related to the cancelled supply [1, 2, 3, 4].
Defence Minister Datuk Seri Mohamed Khaled Nordin said the ministry is open to discussion but remains cautious. “The company has requested to meet with us. But while we are open to discussion, we do not want it to be used as a delaying tactic in the claims process,” he told reporters. He added, “We are always aware and cautious if such tactics are used so that we do not get trapped” [1, 2, 4].
Separately, the Malaysian Navy has formed an evaluation team to identify a replacement missile system. The team is assessing options from four countries, including Turkey, South Korea, and two European suppliers, considering not just basic specs but also key operational criteria to meet the navy’s needs [1, 2, 3, 4].
Khaled confirmed the evaluation is active: “Yes, it’s underway, and we want it evaluated ASAP” [1].
Malaysia and Kongsberg are now in ongoing talks over the compensation claim while the navy proceeds with finding a missile alternative.
