KOTA KINABALU, Oct 29 (Bernama) -- The Federal Government today clarified that its appeal against the High Court’s ruling on Sabah’s 40 per cent special grant does not seek to deny the state's constitutional entitlement, but rather to correct what it considers judicial overreach.
Leading the submissions before the Court of Appeal here today, senior federal counsel Ahmad Hanir Hambaly @ Arwi said the Federal Government does not dispute Sabah’s constitutional right to the 40 per cent formula under Article 112C of the Constitution, or its right to a constitutional review under Article 112D.
He said the appeal was confined to challenging the High Court's finding that the Federal Government had breached its constitutional obligations between 1974 and 2021, and its decision to invalidate the 2022 Review Order.
“We are not disputing the formula. But in a review, apart from the 40 per cent formula, there are other considerations that need to be taken into account, the financial position of the federal government and the needs of the state,” he said.
Ahmad Hanir appeared before a three-member Court of Appeal panel chaired by Justice Datuk Azhahari Kamal Ramli, alongside Justices Datuk Ahmad Kamal Md Shahid and Datuk Amarjeet Singh. The court subsequently fixed Nov 12 for case management to determine a date for its decision.
Challenging the High Court’s mandamus order requiring both governments to reach an agreement within 180 days, Ahmad Hanir argued that the deadline effectively amounted to rewriting the Federal Constitution.
He said the Constitution prescribed no timeframe for reaching an agreement, leaving the matter to negotiations between the two governments.
“The Court cannot determine that period. It must be determined by both governments. Therefore, the entire mandamus order is wrong. The parties have rights to negotiate and reach an agreement,” he said.
He stressed that Article 112D(6) provided a mechanism for appointing an independent assessor to resolve any deadlock, which he argued the High Court had improperly bypassed.
Addressing the 48-year gap without a new gazetted review order, the senior federal counsel maintained that the continued annual payment of RM26.7 million between 1974 and 2021 “lost years” was entirely lawful.
Citing Article 112D(3), he said the 1970 review order remained legally effective until superseded by a new order issued by the Yang di-Pertuan Agong.
“The disputed fraction in this case is what transpired after 1973, because there was no review order from 1974 up to 2022. It is our stance that there was an ongoing process of the review via exchange of correspondence and meetings,” he said.
Ahmad Hanir also questioned the Sabah Law Society's (SLS) legal standing to pursue the case, arguing that the dispute had effectively morphed into a direct dispute between the federal and state governments.
However, SLS’ counsel David Fung defended the society's locus standi to drive the public interest litigation, emphasising that they are seeking the Court’s intervention because the Court is the “guardian of the Constitution”.
When questioned by Justice Amarjeet, Fung said the proceedings had been initiated in the interests of the public and the people of Sabah.
Justice Amarjeet questioned whether SLS, rather than Sabah's elected government, was the appropriate party to pursue constitutional remedies on the state’s behalf.
He also expressed concern that allowing such proceedings could enable the society to challenge decisions or omissions by previous state governments across different periods.
Fung responded that both governments had failed to fulfil their obligations and that, although negotiations had taken place, no agreement had been reached.
He also defended the High Court's 180-day deadline, arguing that judicial intervention was necessary after nearly five decades without a completed review.
Meanwhile, Sabah Attorney-General Datuk Brenndon Keith Soh explained why the state had not invoked the independent assessor mechanism during the disputed period, saying that Article 112D(6) could only be activated when negotiations reached a deadlock during a formally convened review.
As the mandatory review in 1974 had not taken place, Soh said the constitutional conditions for appointing an independent assessor had never arisen. He clarified that the Sabah government had not initiated the judicial review proceedings but had intervened as a directly affected party to present its constitutional position.
Justice Amarjeet questioned the state's reliance on declarations obtained through litigation brought by SLS, observing that Sabah stood to benefit directly from the High Court's findings.
Soh maintained that the state was entitled to participate because its constitutional interests were directly affected.
He said Sabah opposed the setting aside of the relevant orders and maintained that the constitutionally required review had not taken place when it should have.
-- BERNAMA