The Kota Kinabalu High Court yesterday ruled that the federal government acted unlawfully for nearly five decades by failing to honour Sabah’s 40% share of federal revenue derived from the state, as guaranteed under Articles 112C and 112D of the Federal Constitution.
Peter John Jaban said that while the judgment concerned Sabah, it carried deep implications for Sarawak.
Sarawak also enjoys constitutional provisions under Article 112C and the Tenth Schedule (Part V) of the Federal Constitution for special financial grants to be reviewed through negotiations between the federal and state governments.
“Sabah has spoken through the courts. Now it is Sarawak’s turn to act,” Peter said in a statement.
“For nearly half a century, both states have contributed immense wealth to the nation while receiving only a fraction in return. This imbalance must end.
“Although Sarawak’s arrangement differs, it is based on the same constitutional foundation.”
He added that the court’s decision exposes how Putrajaya has systematically failed to uphold its constitutional obligations towards Sabah and, by extension, Sarawak.
Peter said the legal victory was a “moral triumph” for the people of Sabah, proving that the Malaysia Agreement 1963 (MA63) is a binding constitutional document that must be honoured in full.
Peter urged Sarawak’s leaders to show the same courage as the Sabah Law Society (SLS), whose successful legal challenge demonstrated that the public can bring about change when they stand up for their constitutional rights.
He congratulated SLS for its historic victory against the federal government, stating that their success belongs to every Sabahan and should serve as inspiration for Sarawakians to demand “justice, equity, and respect” within the federation.
SLS filed for a judicial review in 2022 after claiming that the federal government had breached the Federal Constitution by failing to conduct a mandatory revenue review every five years since 1974.
It also argued that the government is constitutionally obliged to remit 40% of federal revenue collected from Sabah back to the state for each of those years.
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 the net revenue derived from Sabah.
Apart from ruling that the federal government acted unlawfully by failing to honour Sabah’s 40% share of federal revenue for nearly five decades, High Court judge Celestina Stuel Galid also declared the special grant arrangements made by both the federal and state governments were “unlawful, ultra vires and irrational”.