The judicial review filed by the Sabah Law Society (SLS) over the state’s 40 per cent revenue entitlement will proceed to a full hearing at the High Court in Kota Kinabalu on July 7.
The case challenges the federal government’s alleged failure to review and return a portion of net revenue collected from Sabah, as required under Article 112C and the Tenth Schedule of the Federal Constitution.
Under the constitutional provision, Sabah is entitled to receive two-fifths of federal revenue collected from the state above the 1963 baseline.
A review was due by 1974, but no such review took place until 2022.
“This is not a political issue. It is a constitutional obligation that has gone unfulfilled for far too long,” said Datuk Roger Chin, who filed the judicial review in 2022 during his tenure as SLS president.
He described the period between 1974 and 2021 as the “Lost Years”, during which Sabah did not receive a proper review or updated grant payments.
“The failure to review and make appropriate payments… represents a breach of duty under the Constitution,” he said.
The judicial review was filed shortly after the federal and state governments signed an interim grant agreement in 2022.
The case faced early challenges, including objections over the SLS’s legal standing and whether the issue was justiciable. The court ruled in early 2025 that the case could proceed to a full hearing.
The federal government, listed as the first respondent, argues that a fixed annual payment of RM26.7 million introduced following a 1969 review meets its constitutional obligations.
It denies that any arrears are owed and claims the 40 per cent formula no longer applies.
The Sabah state government, named as the second respondent, acknowledges that no review occurred until recently, but maintains that interim deals signed in 2022 and 2023 do not waive its rights. It supports further negotiations or, if needed, referral to an independent assessor under Article 112D(6).
“What’s at stake here is more than money — it’s the integrity of the Constitution and how we define federalism in Malaysia.
“This case belongs to the people of Sabah. It is their right to know what happened, and what is owed,” he said.
A public townhall session hosted by SLS is scheduled for June 20 to explain the legal context of the case. – May 20, 2025
