E-review on Sabah's 40% revenue entitlement case Aug 7

Borneo Post

07-07-2025

KOTA KINABALU (July 7): A High Court here today fixed August 7 for e-review of a judicial review brought by Sabah Law Society (SLS) to get declaration on 40 percent entitlement grant for Sabah which allegedly had not been reviewed for 48 years since 1974.
Justice Datuk Celestina Steul Galid set the date on whether to give further directions on this matter or if there is a need for clarification on certain points.
Monday (July 7) was fixed for full hearing for the said judicial review.
Lead counsel for SLS legal team Dr David Fung Yin Kee submitted that for these years namely 1974-2021 (referred to as the Lost Years) all of the revenue derived by the Federation from Sabah 100% was allegedly taken by the Federation.
Fung submitted that there was allegedly no 'share of growth of the Federal revenue derived from Sabah'.
He contended that there was no review done, therefore, no agreed periods, no Order of YDP Agong, and no annual grants under Article 112C of the Federal Constitution which allegedly breaches of Constitutional Imperatives.
He explained that February 14, 2022 was the second review, April 17, 2022 was the second review Order (for period of 2022 to 2026). June 23, 2023 was the third review and November 22, 2023 was the third review Order (for period of 2023 to 2027).
When inquired by court whether any document to explain the silence or alleged failure to provide 40 percent grant over the Lost Years, Fung said that there were no documents at all which in their case was that there had been no reviews for the Lost Years. The Federal government, on the other hand, maintains that there is an 'ongoing review'.
He contended that can they have an 'ongoing review' with no results? Is rolling year by year allowed under Article 112D of the said Constitution? There is no period and no agreed amount.
Fung said that for there to be a review, both the federal and Sabah state governments must meet and reach an agreement on the period and annual grants every five years.
'If they are unable to agree, then can proceed to appoint an independent assessor in accordance with Article 112D(5).
'No excuses for no agreement because there is a specific provision for an independent assessor to be brought in, the assessor's decision would be binding on the federal and state governments,' said Fung.
In reply, Senior Federal Counsel Ahmad Hanir Hambaly @ Arwi submitted that the review is a process, until there is an agreement to succeed the 1969 review order, the same shall continue to be in force.
Ahmad Hanir said that the first review order is still continuing to be in force.
When inquired by court on what is the evidence on the agreement between the parties on the grant,
Ahmad Hanir answered that the evidence is the grant itself, i.e. the review order, until an order is made to alter the 1969 review order, it is evidence of Sabah's acceptance of the same being continually in force.
Ahmad Hanir submitted that the review is a process and the fact that both the federal government and Sabah state government have had numerous meetings to discuss this matter and there are ongoing negotiations.
However, he explained that there were no documents to show that the ongoing review as most of the documents are classified.
As for state government of Sabah, State Attorney-General Datuk Brenndon Keith Soh submitted that there was allegedly had not been any review for the lost 48 years and the review order only provides for the respective sums as provided therein, and not beyond.
Soh submitted that naturally follows that Sabah is entitled to the 40 percent grant for the lost 48 years.
He argued that Sabah state government has agreed to accept an interim special grant (from 2022 onwards) on a 'without prejudice' basis and reserves its right to rely on the original formula under Article 112C of the said Constitution and the right to claim for any arrears for failure to conduct a review.
Soh added that Sabah state government agreed that there was scope for the court to order the various declarations sought, the mandamus to hold review for the lost 48 years, However, they submitted that there was no basis for the court to quash the 2022 review order.
Three years ago, SLS was granted a leave to commence the said judicial review by a High Court here which was on November 11, 2022.
The federal government had appealed against the said High Court's decision on May 16, 2024 which was dismissed on June 18, 2024, with no order as to costs.
SLS had named the government of the federation of Malaysia and the state government of Sabah as the first and second respondents respectively in their judicial review.
The Society sought from court a declaration that the failure of the first respondent to hold the second review in the year 1974 with the second respondent is a breach and contravention of its constitutional duty stipulated under Article 112D, Clauses (1), (3) and (4) of the Federal Constitution.
It also sought from court a declaration that 40 percent entitlement remains due and payable by the first respondent to second respondent for each consecutive financial year for the period from the year 1974 to the year 2021.
Apart from that, SLS further sought from court a declaration that the failure to pay the 40 percent entitlement by the first respondent to the second respondent for each consecutive financial year for the period from the year 1974 to the year 2021 is a breach of the fundamental right to property of the second respondent and ultimately of the people of Sabah as enshrined under Article 13 of the Federal Constitution.
Further, they sought an order of mandamus directed to the first respondent to hold another review with the second respondent under the provisions of Article 112D of the Federal Constitution to give effect to payment of the 40 percent entitlement under Article 112C read with subsection (1) of Section 2 of Part IV of the Tenth Schedule of the Federal Constitution for each consecutive financial year for the period from the year 1974 to the year 2021 within 30 days and to reach a decision within 90 days from the date of this order.
Lastly, SLS is also seeking an order that the first respondent pays the entitlement as determined under paragraph 3 (a) above to the second respondent or as constitutional damages for breach of Article 13 of the Federal Constitution or both.
Counsel Jeyan Marimuttu, Janice Junie Lim and Grace Liew also represented SLS.
Senior Federal Counsel Senior Federal Counsel Nurhafizzan Azizan and Azza Azmi, Federal Counsel M. Kogilambigai A/P Muthusamy and Nur Atirah Aiman Rahim also acted for the federal government.
State Counsel Devina Teo and Roland Alik also acted for the state government.