KOTA KINABALU: The High Court of Sabah and Sarawak has delivered a landmark decision affirming Sabah’s constitutional right to 40% of federal revenue derived from the state — a ruling hailed as a long-awaited victory for the people of Sabah.
The court ruled that the 40% Special Grant guaranteed under Articles 112C and 112D of the Federal Constitution is not a privilege to be negotiated but a constitutional entitlement that has existed since the formation of Malaysia in 1963.
“This victory belongs to every Sabahan who never stopped believing that justice would come,” said Datuk Roger Chin, Immediate Past President of the Sabah Law Society (SLS), in a statement following the judgment.
Chin described the decision as “a turning point” that restores what he called “the lost years” when Sabah’s rightful share of federal revenue was withheld for nearly half a century.
“For fifty years, promises made at the birth of Malaysia were forgotten. Today, the Court has restored those promises and reaffirmed the rule of law,” he said.
The High Court’s decision clarified that the 1969 Order to vary the original revenue formula did not extinguish or alter Sabah’s 40% entitlement. Instead, the constitutional mechanism guaranteeing Sabah’s share has always remained intact.
According to Chin, the judgment also recognised the Sabah Government’s pivotal role in asserting and documenting the state’s constitutional rights, particularly through its efforts to clarify the historical records on the federal revenue share from 1964 to 1968.
“The acceptance of interim payments by the State Government was without prejudice to its constitutional rights,” he noted.
Under the ruling, parts of the 2022 Review Order and its subsequent replacement orders (Review Orders 3 and 4) have been quashed, but not in their entirety. The court found these orders flawed insofar as they implied that the omitted years — from 1974 to 2021 — could be disregarded, declaring such omissions unlawful.
Importantly, Chin emphasised that the decision does not affect the 40% grant payable to Sabah from 2022 onwards.
The judgment now compels the Federal Government to meet with the Sabah Government within 90 days to begin negotiations, and to reach an agreement within 180 days applying the 40% formula as set out in the Constitution.
The arrears due to Sabah for the years 1974 to 2021 have been recognised as a continuing debt, and payment must follow — either through direct settlement or constitutional damages. Until then, all reliance on the 2022 Review Order and its successors remains stayed.
Chin said the ruling has restored the “constitutional path” and called on the Federal Government to respect the judicial process and abide by the court’s decision.
“While it remains their right to appeal, doing so would betray sincerity, especially when successive governments — including the present one — have pledged to honour the Malaysia Agreement 1963 yet failed to resolve the 40% entitlement,” he stressed.
Chin added that the SLS would “resist vigorously” any attempt to appeal or undermine the decision.
Describing the ruling as “a victory for the Federation,” he said it reaffirmed that Malaysia honours its founding promises and that “true unity is built not on neglect but on respect.”
“Today, Sabah has been heard. Today, justice has been done. And today, history records that promises made in 1963 remain promises kept in 2025,” he said.
Chin said the court’s ruling has ended Sabah’s “lost years,” restored justice and redeemed the original promise of Malaysia.
“Honouring this judgment is not just about Sabah — it is about strengthening Malaysia itself,” he said.
