Malaysia presses Norway over missile reversal

Malaysia has sharpened its criticism of Norway’s cancellation of export licences for Naval Strike Missiles, casting the dispute as a test of whether international contracts and security partnerships still carry weight when smaller states deal with stronger powers.

Defence Minister Mohamed Khaled Nordin said Oslo’s decision had moved beyond a procurement setback and raised wider questions about trust in global relations. He argued that rules and agreements lose credibility when advanced economies can withdraw from signed deals after payments, integration work and delivery schedules have already been set.

Kuala Lumpur is seeking more than RM1 billion in compensation after Norway revoked approvals linked to the Kongsberg Defence & Aerospace missile system intended for Royal Malaysian Navy littoral combat ships. Malaysia says it had paid about 95 per cent of the contract value before the reversal, which disrupted plans for weapons installation on ships already designed around the Norwegian system.

The dispute centres on the Naval Strike Missile, an anti-ship weapon produced by Kongsberg and selected under Malaysia’s long-delayed littoral combat ship programme. The original 2018 contract was valued at about €124 million and covered missiles for six vessels, while Malaysia has also referred to a second arrangement involving two additional naval platforms.

Norway has defended the decision as part of tightened export controls over sensitive defence technology. Its foreign ministry has said exports of some Norwegian-developed systems will be limited to allies and closest partners because of changes in the European and global security environment. Oslo has also said it values relations with Malaysia and wants continued dialogue, while Kongsberg has maintained that licensing decisions rest with Norwegian authorities.

Kuala Lumpur’s anger has deepened because the decision came after years of planning around the missile system. Officials say the financial claim includes direct payments and indirect costs, including work needed to remove or modify equipment already fitted to accommodate the system, integration of replacement weapons and retraining of personnel.

Prime Minister Anwar Ibrahim has called Norway’s action unilateral and unacceptable, warning that signed contracts cannot be treated as disposable commitments. He has said the move could damage confidence in European defence suppliers if commercial and strategic agreements can be reversed without adequate safeguards for the buyer.

Khaled’s remarks have widened the argument from a bilateral dispute to a broader critique of defence procurement norms. He said smaller countries must ask whether powerful states can invoke shifting policy considerations after contracts have been finalised, leaving customers to absorb operational, financial and strategic consequences.

Malaysia’s immediate concern is the impact on the littoral combat ship programme, one of the country’s most politically sensitive defence projects. The programme began in 2011 with an initial plan for six vessels at RM6 billion but became mired in delays, cost escalation and allegations of mismanagement. The government later revived the project after a review, reducing the number of vessels to five.

The first ship, originally expected earlier, is now due for delivery in December 2026. The absence of the missile system adds another layer of difficulty to a programme already under scrutiny, though the defence ministry has said construction will continue while alternative missile options are assessed.

Replacing the Naval Strike Missile is not a simple procurement switch. Any substitute must be compatible with the combat management system, launch architecture, ship design, maintenance regime and training pipeline. Defence analysts have warned that retrofitting could raise costs and extend integration timelines, especially when warship systems have been configured around a specific weapon package.

Malaysia is also weighing the diplomatic cost of the dispute. Norway is not among Malaysia’s largest defence partners, but the controversy could influence how Kuala Lumpur assesses future purchases from Europe and NATO-aligned suppliers. Khaled has indicated that trust, technology transfer and support for Malaysia’s self-reliance goals will carry greater weight in future procurement decisions.

The episode comes as Southeast Asian states are modernising naval capabilities amid busier sea lanes, contested maritime zones and growing demand for precision strike systems. Malaysia has sought to strengthen its maritime posture while avoiding alignment with any major bloc, making reliability of suppliers a central issue in long-term planning.