KUALA LUMPUR (July 2): Malaysia is seeking to recover the money paid for the scrapped Norway missile deal through provisions in the contract signed, the Ministry of Defence said.

The contract signed with Norwegian defence firm Kongsberg Defence & Aerospace AS contained clauses that provides recourse in the event of failure of implementation or breach of obligations, Defence Minister Datuk Seri Mohamed Khaled Nordin said in a written parliamentary reply dated July 1.

“The ministry is utilising the provisions available under the contract to protect the government’s interests, including submitting claims to recover the payment made, as well as related damages,” he said.

The government has issued a notice of demand to the manufacturer seeking compensation totalling about RM1 billion for the cancellation of the Naval Strike Missiles (NSMs) sale.

Malaysia has paid 95% of the contract’s €124 million (RM571.9 million) value since the deal was signed in 2018. However, the Norwegian halted shipments of the anti-ship missiles in May 2026, ostensibly over national security.

Mohamed Khaled said the payment was made for progress completed in accordance with the terms of the contract.

“At the time the payment was made, all NSM systems had been completed, had successfully passed the tests stipulated by the Royal Malaysian Navy, and were ready for delivery,” he said.

Mohamed Khaled was responding to Hassan Abdul Karim (PH-Pasir Gudang), who asked why the government released the payment prematurely and whether the agreement contained sufficient safeguards for Malaysia’s interests.

For more Parliament stories, click here.