Kota Kinabalu: Chief Minister Datuk Seri Hajiji Noor said the State Government respects the decision of the Court of Appeal to allow the Federal Government’s application for a stay of the High Court order to review the special grant for the lost years and reach an agreement within 180 days to pay Sabah’s 40 per cent entitlement pending appeal.
“Notwithstanding the court proceedings, it is hoped that negotiations will proceed in good faith towards reaching an agreement with the Federal Government,” he said.
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He said the stay order granted is procedural in nature and keeps the status quo until the Federal Government’s appeal has been heard.
“It does not set aside the existing High Court orders granted. Whilst the High Court order to hold a review is for the Lost Years (1974 - 2021), it should not prevent a review for the current years, given that the Federal Government does not dispute the 40 per cent formula and the need to hold a review,” he said.
The Chief Minister reiterated the State Government’s opposition to the stay of the High Court order, though he emphasised that the Government respects the court’s recent decision.
“This is an ongoing process, and the State Government will continue to discuss the matter and seek a solution,” he stressed.
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Hajiji said the Federal Government did not appeal the October 2025 Kota Kinabalu High Court ruling on Sabah’s Constitutional right to 40 per cent of net federal
revenue collected, and Prime Minister Datuk Seri Anwar Ibrahim has pledged to honour it.
The tentative dates for the hearing of the Federal Government’s appeal are between October 27 and 30, and there is an e-Review fixed on April 13 to confirm the actual date of the hearing.
Meanwhile, the Sabah Law Society (SLS) said the Court of Appeal’s decision is procedural in nature.
Its President Datuk Mohamed Nazim Maduarin said the effect of the order is to preserve the position pending the disposal of the appeal.
“It does not displace the findings of the High Court. The substantive constitutional issues, including the interpretation and proper implementation of Article 112D of the Federal Constitution, remain to be determined in the appeal.
“SLS will continue to participate in the proceedings ‘in accordance with the law and the record before the Court’,” he added.
The Court of Appeal earlier allowed Putrajaya’s application for a stay, pausing both negotiations and payment deadlines imposed by the High Court while the Federal Government pursues its appeal.
Delivering the ruling, Judge Datuk Mohamed Zaini Mazlan said the Government would “clearly be prejudiced” if compelled to comply before the appeal is heard, noting that the High Court’s order required both negotiations and payment from the federal consolidated fund within 180 days.
“There would be serious financial consequences for public funds if the application for a stay was rejected pending the appeal,” he said, adding “the imposed timelines may not give the parties sufficient opportunity to determine the correct quantum payable”.
The appellate court also found there were “special circumstances warranting a stay pending the disposal of the appeal”, including the complexity of determining Sabah’s entitlement across multiple financial years from 1974 to 2021.
