THE Federal Government has decided not to appeal the Kota Kinabalu High Court's decision on the special 40 per cent revenue allocation to Sabah, but will instead begin negotiations with the state government in the near future.
The decision was made at a Special Cabinet Meeting held today, to discuss the High Court's judgment in a judicial review case filed by the Sabah Law Society against the Malaysian Government.
The Attorney-General's Chambers (A-GC) in a statement said the government respects the principle of the Special Grant as provided under the Federal Constitution.
Negotiations with the Sabah state government will begin immediately.
"Therefore, the Federal Government has decided not to appeal against the 40 per cent revenue-based special grant.
"Consequently, the Federal Government will immediately commence negotiations with the Sabah State Government," it said.
During the meeting, the Attorney-General advised the Cabinet on certain flaws in the judgment's reasoning, including allegations that both the Federal and Sabah governments had abused their powers and breached constitutional obligations, dating back to 1974.
"The judgment also stated that the review process after 2021 was unlawful, irrational, procedurally irregular, and disproportionate.
"The Federal Government will appeal concerning these flaws in the reasoning of the judgment," the statement added. - November 11, 2025
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