Sabah Law Society says Putrajaya stay ‘procedural’ in 40pc revenue case

PUTRAJAYA, April 6 — The Sabah Law Society (SLS) today said the Court of Appeal’s decision to grant a stay of execution in the Sabah 40 per cent revenue dispute is procedural in nature and does not resolve the substantive constitutional issues at the centre of the case.

“The effect of the order is to preserve the position pending the disposal of the appeal. It does not displace the findings of the High Court,” its president Datuk Mohamed Nazim Maduarin said in a statement.

He added that “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 Court of Appeal earlier allowed Putrajaya’s application for a stay, pausing both negotiations and payment deadlines imposed by the High Court while the federal government pursues its appeal.

Delivering the ruling, judge Datuk Mohamed Zaini Mazlan said the government would “clearly be prejudiced” if compelled to comply before the appeal is heard, noting that the High Court’s order required both negotiations and payment from the federal consolidated fund within 180 days.

“There would be serious financial consequences for public funds if the application for a stay was rejected pending the appeal,” he said, adding that “the imposed timelines may not give the parties sufficient opportunity to determine the correct quantum payable”.

The appellate court also found there were “special circumstances warranting a stay pending the disposal of the appeal”, including the complexity of determining Sabah’s entitlement across multiple financial years from 1974 to 2021.

A three-member panel comprising Zaini, Datuk Ismail Brahim and K. Muniandy made no order as to costs.

The stay suspends deadlines set by the High Court, which had ordered a review within three months and an agreement within six months from October 17, 2025 — effectively placing a mid-April timeline on resolving the amount owed.

The dispute stems from a judicial review brought by the SLS, in which the High Court found that the federal government had breached its constitutional duty by failing to review and pay Sabah its 40 per cent share of net revenue for the “lost years” between 1974 and 2021, noting that no such reviews were conducted until 2022.

The SLS said it would continue to participate in the proceedings “in accordance with the law and the record before the Court”.

Senior federal counsel Ahmad Hanir Hambaly appeared for the government. The SLS was represented by David Fung and Jeyan Marimuttu, while Sabah was represented by state Attorney General Datuk Brenndon Keith Soh.