Prime Minister Datuk Seri Anwar Ibrahim will address Parliament tomorrow to clarify the government’s decision not to appeal the Kota Kinabalu High Court ruling on the Special Grant based on Sabah’s 40 per cent revenue share under the Federal Constitution.
The Kota Kinabalu High Court had, on October 17, ruled that the Federal Government acted unlawfully and beyond its constitutional powers by failing to fulfil Sabah’s entitlement to 40 per cent of federal revenue for the years 1974 to 2021. Judge Datuk Celestina Stuel Galid described the special grant as “invalid, ultra vires and irrational,” and in breach of the Federal Constitution.
The court also issued a mandamus order directing the Federal Government to conduct a revenue review with the Sabah Government under Article 112D of the Federal Constitution, reinstating Sabah’s right to the 40 per cent revenue. The review is to be carried out within 90 days, with a mutual agreement required within 180 days of the October 17 order.
Anwar, who is also Finance Minister, said his upcoming clarification will cover the appeal regarding perceived flaws in the court’s judgment. He explained that the decision not to appeal was reached by consensus after a special Cabinet meeting.
“Following a special Cabinet meeting to review the Kota Kinabalu judgment, we reached this decision after hours of deliberation, considering the views and proposals of each Cabinet member,” he said at the Prime Minister’s November 2025 gathering with staff of the Prime Minister’s Department.
Following the Federal Government’s announcement, the Attorney General’s Chambers (AGC) confirmed that negotiations with the Sabah Government will begin immediately. The AGC said the Federal Government respects the principle of the 40 per cent Special Grant enshrined under the Constitution.
At the Cabinet meeting, the Attorney-General also highlighted several perceived defects in the court’s reasoning, including allegations that both the Federal and Sabah Governments had allegedly abused their powers and breached constitutional obligations dating back to 1974. The AGC noted that the Grounds of Judgment stated the post-2021 review was “unlawful, irrational and disproportionate.”
The move signals the Federal Government’s intent to work with Sabah on the Special Grant, while Anwar’s address in Parliament is expected to provide detailed explanations on the decision and next steps following the High Court ruling.
