Kuala lumpur: The Federal Government has decided not to appeal the Kota Kinabalu High Court's decision concerning the 40 per cent Special Grant for Sabah, as stipulated under the Federal Constitution, according to a statement from the Attorney-General's Chambers (AGC). The government is set to commence negotiations with the Sabah Government promptly.

According to BERNAMA News Agency, a special Cabinet meeting was convened to deliberate on the High Court's ruling, which resulted from a judicial review application by the Sabah Law Society against the Malaysian Government. The AGC confirmed that the Federal Government acknowledges the principle of the 40 per cent Special Grant as embedded in the Federal Constitution.

During the meeting, the Attorney-General provided insights and advice on various flaws identified in the judgment's rationale. These included claims that both the Federal and Sabah Governments had misused their powers and failed to uphold constitutional obligations dating back to 1974. The judgment also deemed the Review post-2021 as unlawful, irrational, and disproportionate.

The AGC stated, however, that while the government respects the court's decision, it plans to appeal against the perceived defects in the judgment's reasoning. The Kota Kinabalu High Court, on October 17, ruled that the Federal Government had acted beyond its constitutional authority by not honoring Sabah's entitlement to 40 per cent of federal revenue from 1974 to 2021.

Judge Datuk Celestina Stuel Galid, who presided over the case, labeled the special grant agreement between the Federal and Sabah Governments as "invalid, ultra vires, and irrational," violating the Federal Constitution. The court issued a mandamus order requiring the Federal Government to conduct a revenue review with the Sabah Government under Article 112D of the Federal Constitution, aiming to restore Sabah's 40 per cent revenue rights for each financial year from 1974 to 2021.

The order mandates that this review be completed within 90 days, with a mutual agreement between the governments to be reached within 180 days from the issuance of the order on October 17.