AGC: Govt will not appeal order to give Sabah 40pct revenue

Putrajaya will not appeal against the Kota Kinabalu High Court’s ruling affirming Sabah’s entitlement to a 40 percent share of federal revenue collected from the state.

In a statement today, the Attorney-General’s Chambers (AGC) said the federal government respects the constitutional principle of the “Special Grant” under Article 112C of the Federal Constitution and has agreed to proceed with negotiations with the Sabah government immediately.

“Therefore, the federal government has decided not to file an appeal against the 40 percent revenue entitlement.

“Consequently, the federal government will immediately initiate negotiations with the Sabah state government,” said the AGC.

The decision was made during a special cabinet meeting chaired by Prime Minister Anwar Ibrahim today to discuss the court’s ruling in a judicial review filed by the Sabah Law Society (SLS) against the government.

On Oct 17, the Kota Kinabalu High Court ruled that the federal government acted unlawfully and beyond its powers under the Federal Constitution by failing to honour Sabah’s 40 percent share of federal revenue for nearly five decades.

READ MORE: KINIGUIDE | What High Court's 40pct revenue ruling means for Sabah

Judge Celestina Stuel Galid declared that the special-grant review orders jointly issued by the federal and state governments were “unlawful, ultra vires and irrational”, breaching the Constitution.

“It is unlawful on the part of the federation to make the intended special grants under the 10th Schedule,” she said.

The judge also found that the Second and Third Review Orders were invalid and allowed the Sabah Law Society’s (SLS) application in full.

The court issued a mandamus order directing Putrajaya to conduct a new revenue review with the Sabah government under Article 112D of the Constitution and to agree on the state’s 40 percent entitlement for each financial year from 1974 to 2021, with the review to commence within 90 days and conclude within 180 days.

AGC had said that it would file an appeal against a remark made by the judge, where the latter had said that Putrajaya and the Sabah government had abused their powers and breached their constitutional duties.

The ruling, the agency said, was in relation to both governments’ dealings since 1974.

“The ruling also mentions that the reviews done after 2021 (in regard to the revenue claim) were illegal, irrational, and had procedural problems.

“Hence, the federal government will file an appeal against the errors mentioned in the judgment.”

‘Historic’

Caretaker Sabah chief minister Hajiji Noor lauded Putrajaya over the decision and described it as “historic.”

He also said the decision proved Prime Minister Anwar Ibrahim’s understanding of Sabah’s aspirations and his commitment to uphold what is guaranteed under the Federal Constitution.

“The decision not to appeal reflects the strong working relationship between the Gabungan Rakyat Sabah-led state government and Putrajaya,” he said in a statement.

“In my meetings with the prime minister, I have conveyed the state government’s firm position that Sabah’s constitutional rights must be respected, honoured, and fulfilled,” he added, urging Sabahans to continue supporting Anwar’s leadership.

Hajiji said honouring the court’s ruling represents an important step towards narrowing Sabah’s development gap with Peninsula Malaysia, particularly in rural areas where infrastructure, agriculture, and basic amenities continue to lag.

“Sabahans have waited long enough. What is needed now is firm action and genuine political will to honour and implement the 40 percent entitlement,” he said.

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