KUALA LUMPUR, Nov 11 2025: The federal government will not appeal against the decision of the Kota Kinabalu High over the 40 per cent entitlement of the revenue derived from Sabah, a statement issued by the federal Attorney-General Chambers (A-GC) has said.
However, the federal government will appeal the defects in the reasons for judgment.
A special cabinet meeting this afternoon discussed the court’s judgment regarding the Sabah state special grant decided in the Judicial Review Application filed by the Sabah Law Society against the Malaysian government.
“The A-GC informed that the federal government respects the principle of the special grant based on 40 percent of revenue as provided for under the Federal Constitution,” the statement said.
“Therefore, the federal government has decided not to appeal the Special Grant based on 40 percent of revenue,” it said, adding in this regard, the federal government will immediately commence the negotiation process with the Sabah state government.
“At the same meeting, the AG provided advice and views to the Cabinet regarding the defects in the reasons for judgment.
“Among them are the allegations that the federal government and the Sabah state government have abused their power and violated their constitutional obligations.
“This claim will involve the federal government and the Sabah state government since 1974.
“In addition, the reasons for judgment also stated that the review after 2021 is unlawful, irrational, procedurally irregular and disproportionate.
“The federal government will appeal the defects in the reasons for judgment,” the statement said.
On Oct 17, the High Court ordered the federal and Sabah governments to review the 40 per cent special grant entitlement for 1974-2021, giving them 90 days to complete the review and 180
days to reach a final agreement.
The judge made the ruling after allowing the Sabah Law Society’s (SLS) application for a judicial review, which contended that both the federal and Sabah governments had breached their constitutional duties by failing to legally review the payments.
The case centred on the interpretation of Articles 112C and 112D of the Federal Constitution. Article 112C deals with special grants and the assignment of revenue to Sabah and Sarawak, while Article 112D provides for periodic reviews of these grants
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