Malaysia’s defense minister announced Tuesday that officials have formally notified Norway of their intent to pursue compensation exceeding 1 billion ringgit ($251.76 million) following Oslo’s unexpected cancellation of export permits for naval strike missile systems designated for Malaysian warships.
Norwegian officials stated that specific export licenses for certain defense technology to Malaysia were withdrawn due to changes in Oslo’s export control policies. The unexpected decision surprised Malaysian officials and ignited a diplomatic dispute, with Prime Minister Anwar Ibrahim describing the action as “unilateral and unacceptable.”
Defense Minister Mohamad Khaled Nordin explained that the government plans to pursue reimbursement for both direct and indirect expenses, noting that Malaysia had already remitted approximately 126 million euros ($146.66 million), representing 95% of the contract’s total value, for the missile systems.
Malaysia will also pursue additional compensation to address costs associated with removing and replacing equipment on vessels designed to house the Norwegian-manufactured missiles, along with expenses for retraining military personnel, he informed reporters.
Mohamed Khaled stated that Norway’s action creates concerns about the reliability of international defense partnerships, especially those involving Western or NATO member nations.
“What has happened to us was not just a defence procurement issue. It reflects a larger problem, namely, the erosion of trust among countries in international relations,” he said.
The Norwegian ministry of foreign affairs did not immediately respond to requests for comment regarding Malaysia’s compensation demand.
The defense division of Norwegian company Kongsberg announced in 2018 that it had secured a 124 million euro agreement with the Royal Malaysian Navy to provide NSM missiles for six littoral combat ships. Mohamed Khaled revealed last week that a second contract existed to deliver the system to two additional naval vessels.
