Malaysia seeks $251 million from Kongsberg after missile deal collapse

Malaysia is seeking more than 1 billion ringgit, or about $251.76 million, from Kongsberg Defence & Aerospace after Norway abruptly revoked export approvals and blocked delivery of a naval missile system meant for Malaysian combat ships. The demand covers both direct losses and the extra cost of removing missile mounting systems already installed on the vessels and fitting replacement hardware.

The dispute centers on a 2018 agreement to equip six Maharaja Lela-class littoral combat ships with Naval Strike Missiles and launcher components. Malaysia says it had already paid 126 million euros, about $146 million, for the system, while Reuters reported that nearly 95% of the contract value had been paid before Norway pulled the approvals in March, only days before delivery was due. Malaysia also agreed in 2025 to a separate $11.19 million launcher contract for two in-service Lekiu-class frigates, underscoring how deeply the Norwegian missile system had been woven into the navy’s modernization plans.

Defence Minister Mohamed Khaled Nordin said the government would seek compensation and was considering legal action. He cast the cancellation as more than a procurement dispute, describing it as a serious breach of trust that reflected a wider erosion of confidence in international dealings. Prime Minister Anwar Ibrahim took the issue directly to Norwegian Prime Minister Jonas Gahr Støre, calling the move unilateral and unacceptable and warning that defense suppliers lose strategic value if they can renege on signed contracts with impunity.

Norway’s explanation points to a tighter export-control regime. The foreign ministry says defense-related products, technology and services can be exported only under licensing rules aligned with Norwegian security and defense policy, and officials have said sales of the most sensitive technology are now restricted to allies and closest partners. Norwegian officials reportedly told Malaysian counterparts the missiles could be exported only to NATO and NATO partner countries, and Malaysia is not a NATO member.

The collapse leaves Kongsberg with its position still unclear and Malaysia facing a navy upgrade that has to be reworked around a system already partly installed. For Kuala Lumpur, the financial claim is only part of the story. The larger warning is that long cross-border weapons deals can now be undone late in the process if export permissions shift, making global arms supply chains less predictable for middle-power buyers that depend on foreign suppliers for advanced systems.