Datuk James Ligunjang…members of the public encouraged to attend and observe.
KOTA KINABALU : – The Sabah Law Society (SLS) is now proceedings before the High Court of Sabah and Sarawak in Kota Kinabalu, marking a landmark constitutional hearing.
The central issue: has the Federal Government failed in its constitutional duty to pay Sabah its rightful 40% share of net revenue for nearly five decades?
For almost 50 years, this constitutional obligation remained unfulfilled.
The case reflects the Society’s steadfast commitment to constitutional justice for Sabah — a commitment reinforced through successive state executive councils.
This hearing continues the Sabah Law Society’s ongoing pursuit of accountability concerning the 40% entitlement.
During the Opening of the Legal Year 2025 in Kuching, the Society reaffirmed that this is not a political matter but a constitutional obligation grounded in Article 112C and the Tenth Schedule of the Federal Constitution.
The case will be heard openly in court on Monday, 7 July 2025, at 9:00 am.
Members of the public are invited and encouraged to attend and observe.
This represents a rare opportunity for Sabahans to witness an important matter of public interest being deliberated by the judiciary.
WHAT THE CASE IS ABOUT
This case invokes Article 112C and 112D of the Federal Constitution, alongside Part IV of the Tenth Schedule—provisions specific to Sabah and Sarawak upon the formation of Malaysia in 1963.
Sabah is entitled to a special annual grant equal to 40% of the net revenue collected by the Federal Government from the state, above a baseline established in 1963.
This entitlement was mandated to be reviewed by 1974, but no such review occurred until 2022—nearly 50 years later.
The SLS is asking the court to determine whether the delay and the absence of appropriate payments during those years, referred to as the ‘Lost Years,’ constitute a breach of the Federal Government’s constitutional duty.
POSITIONS OF THE PARTIES
Sabah Law Society (Applicant)
SLS asserts that the 40% entitlement is a constitutional guarantee, not a discretionary grant.
According to Article 112C and Section 2 of Part IV of the Tenth Schedule, Sabah is entitled to an annual grant equal to two-fifths of the net revenue collected from Sabah, above the 1963 baseline.
SLS contends that the mandatory review due by 1974 under Article 112D was never conducted, and the failure to do so—and the resulting non-payment for 1974 to 2021—constitutes a breach of constitutional duty.
Federal Government (First Respondent)
The Federal Government maintains that the 40% formula ceased to apply after the first review in 1969, which replaced the original entitlement with a fixed annual grant under Article 112D.
It claims that ongoing negotiations from 1974 to 2021, along with the continuation of RM26.7 million annual payments, satisfy its obligations.
The government denies any arrears are owed, arguing that the special grant is subject to periodic review rather than an absolute entitlement to 40% of net revenue.
Sabah State Government (Second Respondent)
The Sabah Government admits that no review occurred between 1974 and 2021 but states that it has consistently sought a review.
It entered into interim agreements in 2022 and 2023 without prejudice to its right to invoke the original 40% formula and pursue arrears.
They support further review or, if necessary, a referral to an independent assessor under Article 112D(6).
The State accepted the interim arrangements due to pressing financial needs.
WHAT’S AT STAKE
This case transcends mere litigation — it’s a test of constitutional fidelity and the principles of federalism.
The outcome could reshape Sabah’s financial landscape and redefine the balance of powers within the Malaysian federation.
Every Sabahan has a stake in this matter.
As proceedings are open to the public, whether you’re a student, professional, or concerned citizen, your presence and observation matter.
What unfolds in this hearing forms part of the public record — and belongs to the people of Sabah.
(Reproduced from Sabah Law Society Facebook Page.)
By Datuk James Ligunjang J.P
Former State Assemblyman
