KUALA LUMPUR – Putrajaya is seeking to recover nearly RM500 million already paid under the cancelled Naval Strike Missile (NSM) procurement deal, while also pursuing broader damages, with the Defence Ministry establishing a special committee to evaluate legal action against the supplier.
Defence Minister Datuk Seri Mohamed Khaled Nordin said the committee would assess all possible claims, particularly as the government had already disbursed close to 95 per cent of the contract value, estimated at more than RM500 million.
The move signals Putrajaya’s intention not only to recover public funds already paid under the deal, but also to seek additional compensation for losses and implications arising from the termination of the agreement.
“A special committee at the ministry level has been established to detail the claims, which are not limited to refunding payments already made, but also include damages arising from a breach of contract.
“We are making the necessary calculations. We will not only seek recovery of funds already paid, but also compensation for the consequences of the breach that has affected the government. It is appropriate for us to claim all damages arising from the cancellation,” he told reporters during a press conference.
Khaled indicated that the ministry was currently quantifying the broader impact of the failed procurement, including disruptions and consequences borne by the government following the collapse of the contract.
The NSM procurement was intended to strengthen the country’s defence capabilities, making the cancellation a significant setback that now carries both operational and financial implications for the government.
Earlier, Prime Minister Datuk Seri Anwar Ibrahim strongly criticised Norway’s decision to revoke the export licence for the NSM system and its launcher platforms, describing the move as both “unilateral and unacceptable”.
Anwar revealed that he had personally raised Malaysia’s concerns during a telephone conversation with Norwegian Prime Minister Jonas Gahr Støre, emphasising that Putrajaya had fulfilled all obligations tied to the defence agreement since it was signed in 2018.
“I conveyed Malaysia’s vehement objection in a telephone conversation with Prime Minister Jonas Gahr Støre,” Anwar said, stressing that Malaysia had honoured every obligation under the contract since 2018 “scrupulously, faithfully and without equivocation”.
“Norway, it appears, has not felt compelled to extend us the same courtesy and demonstration of good faith,” he added.
The Prime Minister warned that the cancellation could significantly undermine Malaysia’s defence preparedness, particularly affecting the Littoral Combat Ship (LCS) modernisation programme and potentially altering broader regional security dynamics.
Anwar also underscored the importance of upholding international defence agreements, cautioning that actions of this nature could erode trust between nations and defence partners. - May 14, 2026
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