KUALA LUMPUR (July 6): The Malaysian government will negotiate an amicable settlement with the contractor of the scrapped Norway missile deal, according to the Ministry of Defence. 

The first round of talks with Norwegian defence firm Kongsberg Defence & Aerospace AS is scheduled in mid-August this year, Defence Minister Datuk Seri Mohamed Khaled Nordin disclosed in Dewan Rakyat on Monday.

The move to pursue an amicable solution was based on the advice of the Attorney General’s Chambers, Khaled noted.

The government had in May issued a notice of demand to Kongsberg claiming €226.1 million, or over RM1.05 billion, which covers not only the government’s payments but also direct and indirect losses from the cancellation of the Naval Strike Missiles 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 firm halted shipments of the anti-ship missiles in May 2026, ostensibly over national security.

The negotiations will discuss the status of the contracts between Malaysia and Kongsberg, and seek an amicable resolution to issues, including contractual obligations, the Malaysian government's claims, and follow-up measures that can be taken by both parties, Khaled said.

“The government's priority is a solution that delivers the best outcome and is in line with national interests,” he said.

The missile system, to be equipped on Malaysia’s littoral combat ships, was initially scheduled to be delivered to Malaysia in March before a cancellation through ‘force majeure’ — a contractual clause that frees both parties from liability or obligation due to extraordinary circumstances.

Several original equipment manufacturers have been identified as having the potential to supply a missile system to replace the system, Khaled said.

“The proposals and offers from these companies will be evaluated comprehensively based on the operational requirements of the Royal Malaysian Navy,” he added.

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