Appeals Court reserves ruling over Sabah revenue legal challenge

 

The Court of Appeal has adjourned its decision on the federal government’s appeal against the leave granted to the Sabah Law Society (SLS) to seek a judicial review regarding the state’s 40 percent grant revenue.

Court of Appeal judges Ravinthran N Paramaguru, Mohd Nazlan Mohd Ghazali, and Choo Kah Sing fixed May 24 for case management to set the date for the decision after hearing 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 percent of federal revenue earned from the state according to the Federal Constitution.

Senior federal counsels from the Attorney-General’s Chambers (AGC) Shamsul Bolhassan and Ahmad Hanir Hambaly @ Arwi, as well as federal counsels V Krishna Priya @ Venugopal, and Fazriel Fardiansyah Abdul Kadir, acted for the government.

At the outset, Shamsul argued that the 40 percent 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 Tengku Ahmad, to intervene in the appeal.

AGC did not raise any objection to the application.

However, SLS represented by counsels 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 matters.

Fuad in his argument said the rights of the Sabah government against the federal government under the Federal Constitution 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 percent Special Grant provisions could be extinguished without ever being heard,” he said.

Meanwhile, when 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; the needs of Sabah; and the adequacy of funding state services such as roads, water, and electricity.

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

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

On Nov 11, 2022, Justice Ismail Brahim granted SLS’s application for leave for the judicial review ruling that SLS had locus standi for judicial review as it was a public interest litigation.

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 federal government’s gazette of an RM125.6 million annual grant for Sabah, claiming it violated the state’s revenue rights under the Malaysia Agreement 1963 (MA63).

- Bernama