Federal Government Respects High Court’s Judgement, Refrains from Appealing the Ruling

The State Government is grateful that the Federal Government will not appeal the Kota Kinabalu High Court ruling - made on 17 October 2025 - that Sabah can proceed with a judicial review pertaining to Sabah's constitutional right to the 40 per cent special grant to be paid by the Federal Government. In the ruling in October 2025, the High Court instructed the Federal and State governments to reach a mutual agreement within 180 days from the date of the order as required under Article 112D of the Federal Constitution.

Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said, on 11 November 2025, that the decision not to appeal the High Court’s judgement demonstrates that the Prime Minister understands Sabah’s expectations and aspirations, and reflects the Federal Government’s commitment to uphold what is guaranteed to Sabah under the Federal Constitution.

“In my meetings and engagements with the Prime Minister, I have conveyed the State Government’s firm position that Sabah’s constitutional rights must be respected, honoured, and fulfilled,” Hajiji said.

“Sabah's rights on this special grant are clearly stipulated in the Federal Constitution, particularly under Articles 112C and 112D.” In the ruling on 17 October 2025, the High Court has placed strong emphasis on the text of the Constitution (notably Articles 112C/112D) and on the binding nature of the founding agreement (the Malaysia Agreement 1963).

The High Court gave specific deadlines: a review must be done within 90 days, and a binding agreement must be completed within 180 days, to deal with the special grant covering the 47-year period from 1974–2021. In the ruling on Sabah’s 40 % revenue entitlement, the High Court said that the constitutional provisions are mandatory, and not discretionary; and that the special grant mechanism which the federal government has used was “ultra vires” under the constitutional scheme.

The court said that the decades of inaction (“the lost years”) cannot simply be ignored under constitutional duty. Hajiji has said in October 2025 following the High Court’s decision that the victory for Sabah was historic and meaningful and that interim payments by the Federal Government to Sabah were without prejudice to the State's constitutional rights. "Following the High Court’s judgement in October 2025 and the Federal Government’s decision on 11 November 2025, not to appeal the ruling, we will engage with the Federal Government to fulfil its responsibilities as agreed upon during the formation of Malaysia and to implement the High Court’s orders in respect to Sabah’s constitutional rights,” Hajiji said.

The decision not to appeal the judgement reflects the strong working relationship between the Gabungan Rakyat Sabah (GRS)-led State Government and Putrajaya.” Hajiji added that honouring the court’s decision represents a defining step toward narrowing Sabah’s development gap with Malaya, particularly in rural areas where infrastructure, agriculture, and basic amenities continue to lag.

“Sabahans have waited long enough. We need firm action and genuine political will to honour and implement the 40 percent entitlement,” the CM said.

Hajiji added that the State Government is ready to engage constructively with the Federal Government to implement the High Court’s directive to review and finalise the agreement within the timelines given, while calling on the people to continue supporting the Prime Minister’s leadership.