Malaysia seeks more than $250 million from Norway over axed defence deal
Malaysia's Compensation Demand and Diplomatic Fallout
KUALA LUMPUR, May 19 (Reuters) - Malaysia is seeking compensation of more than 1 billion ringgit ($251.76 million) from Norway after Oslo abruptly cancelled export approvals for a naval strike missile system intended for Malaysian combat ships, Malaysia's defence minister said on Tuesday.
Background of the Cancelled Defence Deal
Norway has said certain export licenses of specific defence technology to Malaysia were revoked due to changes in Oslo's export control regulations. The decision caught Malaysia off guard and sparked a diplomatic row, with its Prime Minister Anwar Ibrahim calling the move "unilateral and unacceptable".
Malaysia's Response and Compensation Details
- Defence Minister Mohamed Khaled Nordin said a notice had been sent to Norway for the compensation.
- Malaysia would seek compensation for both direct and indirect costs, adding that Malaysia had already paid around 126 million euros ($146.66 million), or 95% of the contract value, for the missile systems.
- Malaysia would also seek additional damages to cover the cost of dismantling and replacing equipment on ships built to accommodate the Norwegian-made missiles, as well as for re-training personnel, he told reporters.
Implications for International Defence Partnerships
- Mohamed Khaled said Norway's decision raised questions over the trustworthiness of international defence partners, particularly those from Western or NATO countries.
- "What has happened to us was not just a defence procurement issue. It reflects a larger problem, namely, the erosion of trust among countries in international relations," he said.
Norwegian and Industry Responses
- The Norwegian foreign ministry said it was unable to comment on individual cases because confidentiality under the Norwegian Export Control Act is strict. It added it was looking forward to continued cooperation and constructive dialogue with the Malaysian authorities.
- The defence arm of Norwegian group Kongsberg said in 2018 it had agreed a 124 million euro contract with the Royal Malaysian Navy to supply NSM missiles for six littoral combat ships. Mohamed Khaled said last week there was also a second deal to supply the system to two other naval vessels.($1 = 3.9720 ringgit) ($1 = 0.8591 euros)
Reporting and Editorial Credits
(Reporting by Rozanna Latiff; Additional reporting by Gwladys Fouche in Oslo; Editing by Martin Petty and Gus Trompiz)
