Malaysia signed a €124 million (about RM572 million) contract in 2018 with Norway's Kongsberg Defence & Aerospace (KDA) for Naval Strike Missiles (NSM) [1, 2]. The country has paid approximately 95% of the contract value, around €129.8 million (RM571.9 million) [1, 2, 3].
In 2026, the Norwegian government cancelled the export licence for the NSM system, citing national security concerns and halting missile shipments to Malaysia [1, 4, 2]. The cancellation was described as a force majeure event outside KDA's control [2]. Malaysia responded in May 2026 by serving a notice of demand on Kongsberg, seeking €226.1 million (about RM1.05 billion) in compensation. The claim covers payments made plus direct and indirect losses caused by the cancellation [1, 2].
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said, "Our defence system is purely for self-defence, and Malaysia should not be penalised by the suspension of the missile supply under these circumstances" [5]. Defence Minister Datuk Seri Mohamed Khaled Nordin criticized Norway's action, questioning whether international commitments can still be trusted. He said, "If a country long regarded as a champion of peace and synonymous with the Nobel Peace Prize can disregard commitments that have already been agreed upon, can international commitments still be trusted, believed and respected by the global community?" [6]. Khaled also emphasized the government's goal of a solution that "delivers the best outcome, saves time and is in line with the country's interests" [2].
Opposition MP Syed Saddiq Syed Abdul Rahman called on Norway to provide full compensation, arguing losses from integration and defence readiness exceed RM1 billion. He said, "Norway may have one of the greatest football players. Norway has Haaland, a world-class finisher. But when it comes to fulfilling the sanctity of a contract, they're not world-class finishers, they are world-class losers." He added, "This means that even if we suffer losses estimated at around RM600 million, I agree with the defence minister's position that we must at a minimum receive more than RM1 billion in compensation" [3].
Malaysia’s Cabinet decided to suspend all future defence procurement from Norway with immediate effect [4, 5]. Zahid also called for firm legal and diplomatic actions against Norway, including reviews of Norwegian goods imports [5].
To replace the NSM, Malaysia is evaluating missile systems from France, Türkiye, Italy, and South Korea [7, 4, 8]. The Defence Ministry aims to complete a technical evaluation of replacement missiles by the end of July 2026 [9, 8]. Malaysian Armed Forces Chief Gen Tan Sri Malek Razak estimated it could take two to three years to complete the procurement process for a replacement system [7].
Meanwhile, the absence of the NSM has limited the Littoral Combat Ships’ anti-surface warfare capability to naval guns with a 10-kilometre effective range until a replacement missile is integrated [8].
Malaysia has pursued diplomatic efforts at the highest levels to resolve the dispute with Norway, but the path forward includes mid-August negotiations between Malaysia and Kongsberg to seek an amicable settlement on contract status, claims, obligations, and follow-up measures [1, 10, 2].
