Federal Govt’s Stay On Sabah Special Grant Review Justified - Experts

KUALA LUMPUR, April 6 (Bernama) -- The Court of Appeal’s ruling allowing the Federal Government’s application to stay the High Court order on the review of the calculation and payment of Sabah’s Special Grant entitlement is reasonable and justified, according to experts.

Sociopolitical analyst from Universiti Malaya and Senior Fellow at the Malaysian National Academy, Datuk Prof Dr Awang Azman Awang Pawi, said the suspension does not deny Sabah’s rights but ensures the appeal process is fair and does not prejudice any party prematurely.

“The court considered a key factor: the potential ‘prejudice’ to the Federal Government if the High Court’s ruling were enforced immediately. In cases with major financial implications, like the 40 per cent revenue claim, immediate enforcement could create a sudden fiscal strain on the country.

“The Court of Appeal’s decision is procedurally sound and reasonable, but it’s not a solution, just a temporary pause before the matter is fully resolved,” he told Bernama today.

A three-member bench chaired by Judge Datuk Mohamed Zaini Mazlan, with Datuk Ismail Brahim and Muniandy Kannyappan, granted the stay pending disposal of the appeal.

In his ruling, Mohamed Zaini said the court was satisfied that special circumstances existed and that the Federal Government would suffer prejudice if the stay was refused, rendering the appeal nugatory.

On Oct 17 last year, the Kota Kinabalu High Court ruled that the Federal Government had acted unlawfully and beyond its constitutional authority by failing to fulfil Sabah’s right to 40 per cent of federal revenue from 1974 to 2021.

Awang Azman said the ruling also shows that Sabah’s rights remain an ongoing issue that needs to be resolved in line with the spirit of the Malaysia Agreement 1963 (MA63), while ensuring that the legal process is properly followed.

“From a moral and political perspective, delivering substantive justice to Sabah should be a priority and not postponed for too long,” he said, adding that the decision carries complex implications, both for stability and political perception.

He said the short-term benefit is that it allows the Federal Government to plan fiscal and legal strategies carefully, avoiding financial shocks that could threaten economic stability.

“The best way forward is to pair the judicial process with principled political negotiations, speeding up a resolution and making it clear that Sabah’s rights are not just a legal issue, but a federal responsibility,” he said.

Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia (IIUM) lecturer, Associate Professor Dr Khairil Azmin Mokhtar, said disputes between the executive and questions over the legislative powers of federal and state bodies should be settled by the courts.

“What matters is that the issue is resolved peacefully, in line with the constitution and the law. Political and administrative cooperation, compromise, and flexibility can also help settle constitutional and legal disputes.

“The idea of ‘dual federalism’ should give way to ‘cooperative federalism’ when managing conflicts between federal and state interests,” he said.

Meanwhile, retired Sessions Court Judge Mabel Sheela Victor Muttiah stressed that the stay does not determine the merits of Sabah’s claim under the MA63, but instead raises substantial legal questions that must be addressed in a full appeal, with significant implications for federal-state financial relations and constitutional rights, adding that a dedicated constitutional court should be established to adjudicate such issues.

Sabah Law Society president, Datuk Mohamed Nazim Maduarin, said in his statement that it does not displace the findings of the High Court, including its determination that there had been a failure to conduct the periodic review required under Article 112D of the Federal Constitution.

"The society emphasises that this decision is procedural in nature and the substantive constitutional issues, including the interpretation and proper implementation of Article 112D of the Federal Constitution, remain to be determined in the appeal.

"The Sabah Law Society will continue to participate in the proceedings and act in accordance with the law and the record before the court," he said.

-- BERNAMA