KOTA KINABALU, May 17 — Sabah Chief Minister Datuk Seri Hajiji Noor today insists the federal government is legally and constitutionally bound to repay the state 40 per cent of its revenue.

His comment follows the state’s unexpected move to intervene in yesterday’s hearing at the Court of Appeal in which the federal government argued to dismiss the Sabah Law Society’s (SLS) bid for a judicial review on the state’s right to the return of 40 per cent return of revenue, as stipulated in the Federal Constitution.

"This state right was negotiated prior to the formation of Malaysia and is enshrined in the Federal Constitution. It is the financial entitlement of the State. This stand is very much more than an aspiration,” he said in a statement today.

Hajiji also said that he has instructed the Sabah Attorney General to scrutinise and review the ongoing legal proceedings and if necessary, to correct any misguided statement that differs from the state's clear and formal position.

Lawyer Datuk Tengku Fuad Ahmad represented the Sabah government in the Court of Appeal hearing yesterday and caused a stir when he argued that Article 112C of the Federal Constitution was "not a mandatory or absolute right” when the matter of SLS’s locus standi was raised.

Locus standi a legal term in Latin that means the right to appear in court.

In his argument, Tengku Fuad said the 40 per cent special grant revenue was an aspirational article, designed for something to work towards as opposed to absolute or right.

"The grants are subject to Article 112D and particularly 112D(2) i.e financial positions and state services, mandatory but not an absolute right. The 40 per cent special grant revenue is an aspirational article. It is designed for something to work towards as opposed to absolute or right under mandamus,” he said yesterday in court.

In his statement today, Hajiji said that notwithstanding the ongoing proceedings in the Court of Appeal, the official demand of the state government is that the federal government is legally and constitutionally obligated to compensate Sabah what is lawfully due as a special grant, both historically and for the future.

"Let me be crystal clear, we respect the right of the Sabah Law Society to commence legal proceedings on this matter. We recognise the important role that public interest litigation has in promoting the rule of law towards the fair and equitable administration of justice,” he said.

"The state government sees the initiative by the SLS in a positive light that is not partisan and not political in the common furtherance of the constitutional arrangements when Sabah formed Malaysia in 1963.

"I do not want to prejudge the outcome of the Court of Appeal but I share the same sentiment as the rakyat of Sabah and hope that any decision will be favourable to the State,” he said.

Hajiji said that if there is no agreement or solution between the state and the federal governments on the special grant, they will appoint an independent assessor to determine the amount and what is owed to Sabah.

"I assure the rakyat of Sabah that we will not stop in our relentless pursuit of all the state rights due under MA63 and the Federal Constitution. This is our uncompromising and absolute position,” he said.

Prime Minister Datuk Seri Anwar Ibrahim had in his 2023 budget speech said he recognised the right and that the federal government is committed to improve the rate of the special grant compared to what was previously agreed and will also expedite the negotiations to find a solution.

The issue is under the purview of the MA63 Technical Committee chaired by Deputy Prime Minister Datuk Seri Fadillah Yusof.

Pending the ongoing negotiations, the interim amounts have been increasing from RM125.6 million in 2022 and from the RM260 million announced in January 2023 to RM300 million in July 2023.

The negotiations also include claims backdated for the last 50 years till 1974 where no review of the special grant was conducted.