PUTRAJAYA — The Court of Appeal has allowed the federal government’s application for a stay of execution on the High Court’s order for a review of Sabah’s 40% special grant entitlement.
Justice Datuk Mohamed Zaini Mazlan, in granting the stay order, said the federal government would be “prejudiced” if it had to comply with the lower court’s ruling before it could present its appeal
Last October, the Kota Kinabalu High Court had given the federal government three months to negotiate a review with the Sabah government on the 40% entitlement to the state from federal revenue, for the years 1974 to 2021.
The court also ordered a final agreement on the review in six months, which expires this month.
However, Justice Zaini said this could cause financial consequences for public funds as the high court had also required payment from the federal consolidated fund within 180 days of its order.
“The imposed timelines may not give the parties sufficient opportunity to determine the correct quantum payable,” he was reported saying by New Straits Times.
Other judges on the panel were Justices Datuk Ismail Brahim and K. Muniandy.
The case was brought against Putrajaya by the Sabah Law Society (SLS) which argued that the federal government had breached its constitutional duties by failing to review Sabah’s share of grant entitlements between 1974 to 2021, resulting in “lost revenue” for the state.
The high court had found that no review was conducted until 2022.
With today’s decision, the review and any payments by the federal government is stayed pending disposal of Putrajaya’s appeal.
The appellate court today did not make any order as to costs. – April 6, 2026