Malaysia tells Norway to pay $252 million for scrapping defense deal

Mohan Sinha
21 May 2026, 11:21 GMT+10

Malaysia’s defense minister said that the country has asked Norway to pay more than 1 billion ringgit (about US$252 million) in compensation for canceling export approvals for a naval missile system on warships.
Defense Minister Mohamad Khaled Nordin said Malaysia will seek compensation for both direct and indirect losses.
Khaled said Norway’s action raises concerns about the reliability of international defense partners, especially those from Western or NATO countries.

KUALA LUMPUR, Malaysia: Malaysia's defense minister said on May 19 that the country has sent a notice to Norway asking for more than 1 billion ringgit (about US$252 million) in compensation. This came after Norway suddenly canceled export approvals for a naval missile system on Malaysian warships.

Norway said it had withdrawn some export licenses due to changes in its export rules. The decision surprised Malaysia and caused a diplomatic dispute. Prime Minister Anwar Ibrahim called the move "one-sided and unacceptable."

Defense Minister Mohamad Khaled Nordin said Malaysia will seek compensation for both direct and indirect losses. He added that Malaysia had already paid about 126 million euros, around 95 percent of the contract, for the missile systems.

Malaysia also plans to claim extra damages for the cost of removing and replacing equipment on ships designed for the missiles, as well as retraining personnel.

Khaled said Norway's action raises concerns about the reliability of international defense partners, especially those from Western or NATO countries. He said the issue is not just about defense purchases, but also about a wider loss of trust between countries.

Norway's foreign ministry has not yet responded to Malaysia's request. Meanwhile, Norwegian company Kongsberg had earlier signed a 124 million euro deal in 2018 to supply missiles to Malaysia's navy, with another similar deal also in place.