THE Court of Appeal has fixed Nov 12 for case management to determine the date of its decision on the Federal Government's appeal against a High Court ruling on Sabah's constitutional entitlement to 40 per cent of federal revenue derived from the state.
A three-member panel chaired by Justice Datuk Azhahari Kamal Ramli deferred its decision after hearing more than three hours of submissions from the Federal Government, the Sabah Law Society (SLS) and the Sabah state government.
The panel, which also comprised Justices Datuk Ahmad Kamal Md Shahid and Datuk Amarjeet Singh, is hearing the Federal Government's challenge to a High Court mandamus order directing both governments to review and reach an agreement on Sabah's special grant for the period from 1974 to 2021.
"We are not in a position to decide this afternoon. We need time to consider the submission. We will set a case management to fix a decision date," Azhahari said before adjourning proceedings.
The case management will be conducted through the court's e-Review system.
In its submissions, senior federal counsel Ahmad Hanir Hambaly @ Arwi clarified that the Federal Government was not disputing Sabah's constitutional entitlement to the 40 per cent revenue formula under Article 112C of the Federal Constitution or its right to a review under Article 112D.
He said the appeal was specifically aimed at overturning the High Court's finding that the Federal Government had breached its constitutional obligations between 1974 and 2021, as well as its decision to invalidate the 2022 Review Order.
Meanwhile, Sabah Law Society (SLS) counsel David Fung defended the society's legal standing to bring the case, describing it as a necessary guardian of the Constitution.
He argued that the Sabah government had merely reserved its rights for decades without pursuing legal action, leaving the civil society organisation to seek judicial intervention on behalf of Sabahans.
Sabah Attorney-General Datuk Brenndon Keith Soh, meanwhile, explained why the state had not invoked the constitutional mechanism for appointing an independent assessor under Article 112D(6).
He argued that the mechanism could only be activated when a deadlock arose during an ongoing, formally convened review.
As the Federal Government had failed to conduct the mandatory review in 1974, the constitutional prerequisite for appointing an independent assessor had never been fulfilled, he said.
"Because the Federal Government failed to hold the mandatory 1974 review in the first place, the constitutional prerequisite to appoint an assessor was never met, leaving the state without a legal avenue to trigger the deadlock mechanism," he said.
On Oct 17, 2025, the Kota Kinabalu High Court ruled in favour of a judicial review brought by SLS, declaring the Federal Government's failure to conduct mandatory reviews of Sabah's special grant since 1974 unconstitutional.
The High Court ordered both governments to conduct a review within 90 days and reach an agreement within 180 days on Sabah's 40 per cent special grant entitlement for the 1974-2021 period.
The Federal Government subsequently appealed the decision and obtained a stay of execution from the Court of Appeal on April 6, 2026, suspending immediate implementation of the ruling and its deadlines pending the appeal. - October 30, 2026
