KUALA LUMPUR, July 6 — Malaysia will begin talks with Norway’s Kongsberg Defence & Aerospace (KDA) in August to seek an amicable settlement following the cancellation of a Naval Strike Missile (NSM) export licence, Defence Minister Datuk Seri Khaled Nordin told Parliament today.
Khaled said the talks would follow legal advice from the Attorney General’s Chambers, with Putrajaya aiming to resolve the contractual dispute before considering further legal action.
The dispute centres on the NSM surface-to-surface missiles, which were originally intended for the Royal Malaysian Navy’s troubled multi-billion-ringgit Littoral Combat Ship (LCS) programme.
“The main objective of the negotiations is to discuss the status of the contract between Malaysia and KDA to find a diplomatic solution; to determine what are the contract’s obligations and the follow-up actions that can be taken,” Khaled said during a special explanation session.
The Royal Malaysian Navy in 2018 signed a contract worth approximately €124 million (about RM572 million at the time) with KDA to develop NSM systems that were intended to be the primary anti-ship missile capability for the RMN’s six new LCS.
The Norwegian government revoked the export licence for the NSM system just days before the scheduled delivery last month, citing “stricter export controls” on sensitive defence technologies.
The shift in policy is meant to limit the export of such advanced systems to “allies and closest partners”, it said, essentially prioritising Nato and European Union members.
KDA had largely distanced itself from the decision, invoking force majeure on the grounds that they are legally barred from fulfilling the contract due to their own government’s regulatory changes.
The firm said export licensing is handled entirely by the Norwegian state and not the company.
The Ministry of Defence had said it is identifying a suitable replacement system for the Royal Malaysian Navy’s surface-to-surface missile capability, as it criticised Norway strongly.
Khaled told Parliament that the technical evaluation by the navy and ministry should be completed by the end of this month before proceeding to the next stage of assessment.
