Sabah’s 40% revenue rights: Sabah govt intervenes in Federal Govt appeal

KOTA KINABALU: Sabah government threw a surprise when it intervened in the Federal Attorney General’s appeal against the High Court decision to grant Sabah Law Society (SLS) leave to challenge the 40% Special Interim Grant provisions.

Reporters were later told that if the Sabah Government did not intervene then there was a risk that its rights to challenge the Federal Government in respect of the 40% Special Interim Grant provisions could be extinguished without ever being heard.

The three-member Court of Appeal panel granted Sabah government’s application to be an intervener and co-appellant in the appeal against the leave granted to the SLS by The Kota Kinabalu High Court.

Justices Datuk Ravinthran N. Paramaguru, Datuk Mohd Nazlan Mohd Ghazali, and Datuk Dr Choo Kah Sing allowed the state’s application at the hearing of the appeal at the Court of Appeal sitting at the Kota Kinabalu Court Complex Thursday (May 16).

The state government represented by Tengku Datuk Fuad Ahmed argued that the rights of the Sabah Government under the Federal Constitution would be negatively affected if it was excluded from the hearing.

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Earlier, the state law society led by Jeyan Marimuthu and Dr David Fung had objected stating that the Sabah Government should not have the right to be heard since the appeal only concerns leave granted by High Court to the society.

The Federal Attorney-General represented by a four-man team led by senior federal counsels Shamsul Bolhassan and Ahmad Hanir Hambaly did not raise any objections to Sabah government’s application to be an intervener and co-appellant.

Fuad argued that the review of the Special Grant under Article 112D (4) is mandatory but was not absolute.

The federal government must grant a review whenever and as required by the Sabah Government, he said.

Fuad said that if the Federal Government breaches any of its constitutional obligations to Sabah under either Articles 112C or 112D (the 40% Special Grant Provisions), then the Sabah Government can seek redress through the courts (the provisions being ‘justiciable’).

He said that there was supposed to be a mandatory review in 1974 but there was none and that the consequences of that breach are justiciable and for the court to decide on.

But there is no specific constitutional provision to deal with the “Lost Years” between 1974 and 2021 that has lapsed, Fuad said.

“This is not a mandatory or absolute right. The 40% special grant revenue is an aspirational article. It is designed for something to work towards as opposed to absolute or right under mandamus,” added Fuad in challenging the locus standi of SLS.

Fung, however, rebutted Fuad’s contention on SLS’ position, saying the Sabah government had no issue on locus standi when leave was applied in the High Court previously.

“They were not appealing so, they did not challenge the High Court’s decision. They had no arguments on locus standi,” he said.

On the Federal AG’s similar challenge on SLS’ standing in the case, he said the former had confused the threshold of locus standi.

“It is in the Court’s discretion whether to grant the prayers.

“As for threshold, public interest litigation has two criteria. Firstly, is there a public wrong? Secondly, is there a public duty?

“The duty here is Article 112C which is public in the highest level (i.e) federal to the state government.

“The case is, when there is a breach of duty, it is for the Court to decide,” Fung said.

The federal Attorney-General argued that the 40% Special Grant provisions under Article 112c and 112D are not open to court challenge because they concern financial and political considerations that are non-justiciable.

The Justices unanimously set the date after hearing all parties’ arguments.

The Court of Appeal will decide on whether SLS will proceed with its judicial review on the state’s 40% revenue rights until May 24 for case management.

The case revolves around Kota Kinabalu High Court’s decision to grant SLS the right (locus standi) to do so against both the federal and Sabah governments in the lawsuit, which seeks to compel the return of 40% of federal revenue earned from Sabah.

On Nov 11, 2022, Justice Ismail Brahim granted SLS application for leave for the judicial review. The judge ruled that SLS had the locus standi to apply for judicial review because it was a public interest litigation.

Justice Ismail also found that SLS’ case concerned a breach of constitutional duty to pay the 40% entitlement for the “Lost Years” (1974–2021).