On the Notice of Appeal and the PM/AGC Statement of 11 November 2025

15 November 2025

KOTA KINABALU: On 11 November 2025, the Prime Minister’s Office and the Attorney General’s Chambers (AGC) announced that the Federal Government would not appeal the High Court’s ruling on Sabah’s 40% special grant entitlement. It was further stated that any appeal would be limited to “defects” in the judge’s written reasoning. This conveyed the clear impression that the substance of the judgment was accepted, and that negotiations would proceed in good faith.

The Notice of Appeal filed shortly afterwards does not reflect this assurance. While it is accurate that the Government has not challenged the constitutional formula for the 40% entitlement, the appeal is far broader than what was publicly represented. It seeks to overturn the findings that no lawful review took place after 1973, that the Gazette Orders issued in 2022, 2023 and 2025 were unconstitutional, and that both the Federal and Sabah Governments breached their constitutional duties. It also challenges the orders requiring constitutional damages and an accounting of the sums owed.

Because the Government did not appeal the High Court’s interpretation of the 40% formula under Article 112C, the formula now stands as the binding basis for all future payments. In practical terms, the constitutional method for calculating Sabah’s entitlement is affirmed and must be applied unless and until a lawful review under Article 112D changes it in accordance with the Constitution.

However, the fact that the formula stands does not mean Sabah’s future entitlement is secure. The Notice of Appeal challenges the very orders that give legal effect to the formula — including the requirement for a fresh constitutional review under Article 112D, the findings that the 2022, 2023 and 2025 Gazette Orders were unconstitutional, the duty to account for the sums due, and the holding that the Government breached its constitutional obligations. If these findings are overturned, there will be no enforceable mechanism to implement the 40% formula in practice. The formula would remain valid in principle, but effectively inoperative.

In effect, the Notice of Appeal strikes at the core of the High Court’s decision. Although it does not challenge the 40% formula itself, it challenges every operative finding that gives the formula real effect. If the Federal Government succeeds, the 40% entitlement will remain law in theory but will be deprived of practical force — exactly the position Sabah has faced for decades.

These are not “defects” in the judge’s reasoning. They are the findings that explain why Sabah received only a fraction of its constitutional entitlement for nearly half a century. By appealing these findings, the Federal Government is effectively contesting the legal consequences of the Lost Years — the 48-year period from 1974 to 2021 during which mandatory reviews never occurred and the 40% entitlement was not paid.

Put plainly, the Notice of Appeal attempts to preserve the form of the 40% entitlement while removing the accountability that gives it substance. If the appeal succeeds, the formula survives, but Sabah may be denied almost five decades of arrears arising from non-compliance.

For this reason, the position expressed on 11 November and the position reflected in the Notice of Appeal cannot be regarded as identical. One suggested a narrow and technical appeal. The other challenges the core findings that justify repayment, accounting, and constitutional responsibility. The difference is significant, and the public deserves clarity, not ambiguity.

Transparency is essential where constitutional rights are concerned. Sabahans — and Malaysians as a whole — are entitled to understand precisely what is being appealed, and what the implications are for both the future and the Lost Years. What Sabah asks for is straightforward - that the Constitution be followed, and that its safeguards not be reduced to words without effect.

Roger Chin

Former President

Sabah Law Society