Appeals court reserves ruling on Sabah’s 40% revenue legal challenge

 

The Court of Appeal has fixed May 24 for case management to set a date for its decision.

KOTA KINABALU: The Court of Appeal has adjourned its decision on the federal government’s appeal against leave granted to the Sabah Law Society (SLS) to seek a judicial review over an ongoing dispute relating to the 40% special grant Sabah is entitled to under the Federal Constitution.

Court of Appeal Justices Ravinthran Paramaguru, Nazlan Ghazali and Choo Kah Sing fixed May 24 for case management to set the date for the decision after having heard submissions from all parties.

The federal government is appealing against the Kota Kinabalu High Court’s decision on Nov 11, 2022 to grant SLS leave to seek judicial review regarding the matter to compel the return of 40% of federal revenue earned from the state according to the Federal Constitution.

Senior federal counsel Shamsul Bolhassan and Ahmad Hanir Hambaly, and federal counsel V Krishna Priya and Fazriel Fardiansyah Abdul Kadir acted for the government.

At the outset, Shamsul argued that the 40% special grant provisions under Articles 112C and 112D of the Federal Constitution are not open to a court challenge because they concern non-justiciable financial and political considerations.

The court also granted the Sabah government’s application, represented by the counsel for the state government, Tengku Fuad Ahmad, to intervene in the appeal.

The AGC did not raise any objection to the application.

However, SLS, represented by counsel David Fung, Jeyan TM Marimuttu and Janice Junie Lim, objected to the application, saying the Sabah government did not have the right to be heard since the appeal only concerns leave.

In his argument, Fuad said the Sabah government’s rights would be negatively affected if it was excluded from today’s hearing.

“If the Sabah government did not intervene today, then there was a risk that its rights to challenge the federal government in respect of the 40% special grant provisions could be extinguished without ever being heard,” he said.

Met by reporters, Fuad said the grant could only be obtained upon the agreement of both governments and must take into account the financial position of the federal government and Sabah’s needs for roads, electricity and other public services.

He said the Sabah government continues to actively seek the 40% special grant through the constitutional procedures set out in the Federal Constitution.

“There is no need for SLS to seek any judicial review because the Sabah government, in cooperation with the federal government, is already undertaking the review. Therefore, we see this court action as unnecessary,” he said.

On Nov 11, 2022, Justice Ismail Brahim granted SLS’s application for leave, ruling that the society had locus standi to seek judicial review as the case was one of public interest.

The AGC obtained a stay order to stop the High Court from hearing the merits of the case pending the appeal.

SLS filed the judicial review application in 2022 to overturn the gazetting by the federal government of RM125.6 million annual grant for Sabah, claiming that it violated the state’s revenue rights under the Malaysia Agreement 1963 (MA63). - FMT