THE Federal Government has reiterated that it is not appealing Sabah’s constitutional entitlement to 40 per cent of federal revenue collected from the state, stressing that its challenge relates solely to parts of the High Court’s written judgment.
In a statement, the Attorney General’s Chambers (AGC) said it wished to “reiterate that the federal government is not appealing on the issue” and confirmed that negotiations with the Sabah Government would begin “as soon as possible.”
The AGC said a Notice of Appeal had been filed at the Kota Kinabalu High Court on 13 November, limited to “several defects” in the judge’s reasoning.
“The written judgment, among other things, alleges that the Federal Government and the State Government had abused their powers and breached their constitutional obligations.
“This department would again like to emphasise that the Federal Government is not appealing the issue of Sabah’s Special Grant based on the 40 per cent revenue rate and will continue to commence negotiations with the Sabah State Government as soon as possible,” it said.
However, a senior Sabah lawyer has cautioned that the scope of the appeal may have deeper implications.
Malay Malil, on Friday, cited former Sabah Law Society (SLS) president Datuk Roger Chin saying the Notice of Appeal goes beyond what the Prime Minister’s Office and AGC had earlier suggested on 11 November, when they indicated only “defects” in the judgment would be contested.
“In effect, the appeal strikes at the core of the High Court’s decision. Although the 40 per cent formula under Article 112C remains law in theory, the Notice of Appeal challenges the orders that give it practical effect.
“If successful, the formula will be effectively unenforceable, leaving Sabah in the same position it has faced for decades,” Chin said.
He noted the appeal seeks to overturn key findings, including that no lawful review had taken place since 1973; that the Gazette Orders of 2022, 2023 and 2025 were unconstitutional; and that both the Federal and Sabah governments had breached their constitutional duties.
It also challenges orders for constitutional damages and for a full accounting of sums owed.
“Put plainly, it seeks to preserve the form of the entitlement while removing the accountability that gives it substance. If it succeeds, Sabah may be denied almost five decades of arrears arising from non-compliance,” he added.
Chin said Sabahans and Malaysians “have a right to understand exactly what is being appealed and its implications for both future payments and past losses.”
“Sabah’s request is straightforward: that the Constitution be followed and its safeguards not be reduced to words without effect,” he added.
News reported cited earlier that the Federal Government would not appeal the High Court’s affirmation of Sabah’s 40 per cent entitlement but would challenge portions of the written judgment it believes contain “defects” and inaccurate assertions.
The AGC said the government respects the constitutional basis of the Special Grant and will begin negotiations with the Sabah Government “urgently” to implement it. - November 14, 2025
