Unlawful for Malaysia government to withhold Sabah’s 40% share of federal revenue derived from state: High Court

KOTA KINABALU: A high court in Malaysia on Friday (Oct 17) ruled that the Malaysian federal government has acted unlawfully by failing to fulfil the Borneo state’s right to 40 per cent of federal revenue derived from the state for nearly 50 years, local media reported.

Kota Kinabalu High Court judge Celestina Stuel Galid declared that the special grant arrangements between the federal and state governments were “unlawful, ultra vires, and irrational,” adding that they violated the federal constitution.

Ultra vires refers to an act that goes beyond the scope or in excess of legal power or authority.

“It is unlawful on the part of the federation to make the intended special grants under the 10th Schedule,” she was quoted as saying by Malaysiakini.

In addition to this, the court issued a mandamus order, which compels Putrajaya to review the revenue allocation with the Sabah government.

It had also ordered that an agreement be reached on Sabah’s 40 per cent share of federal revenue for each financial year from 1974 to 2021, with this process to be completed within 180 days, Malay Mail reported.