In a statement, the AGC noted that one of the key issues in the dispute was the legal interpretation of Articles 112C and 112D of the Federal Constitution.

Article 112C of the Federal Constitution deals with special grants and the assignment of revenue to Sabah and Sarawak, while Article 112D provides for periodic reviews of these grants.

The AGC also noted that the court ruled that the federal government and the Sabah government must conduct another review of Sabah’s special grant for the period from 1974 to 2022.

The Kota Kinabalu High Court yesterday ruled that the federal government acted unlawfully by failing to honour Sabah’s 40% share of net federal revenue from the state for nearly five decades.

The decision came following an application for a judicial review filed by the Sabah Law Society in 2022. The society contended that the federal government had breached the Federal Constitution by failing to conduct a mandatory revenue review every five years since 1974.

The revenue-sharing formula has been a contentious issue for decades. Sabah politicians have called for the federal government to honour the state’s entitlement, as agreed in 1963, to 40% of net revenue derived from Sabah.

Use of the formula had been suspended since 1974, with the federal government paying increased special grants to Sabah and Sarawak instead.

Leaders from Warisan and Upko were among the Sabah politicians who expressed hope that the attorney-general would not appeal the High Court ruling.