10 March 2026
Sabah’s 40% Revenue Right Cannot Be Denied or Delayed — It Is a Constitutional Obligation
Borneo’s Plight in Malaysia Foundation (BoPiMaFo) expresses grave concern over the recent legal manoeuvres by the Federal Government to delay the implementation of Sabah’s constitutional entitlement to 40% of the net revenue derived from the state.
This entitlement is not a political concession. It is a constitutional right enshrined under Articles 112C and 112D of the Federal Constitution of Malaysia.
On 17 October 2025, the Kota Kinabalu High Court delivered a historic ruling in the judicial review initiated by the Sabah Law Society. The Court did not merely issue a declaration. It granted a mandamus order compelling the Federal Government to perform its long-neglected constitutional duty.
The Court further recognised that the constitutional review mechanism required under Article 112D had effectively been ignored for decades. In other words, the Court acknowledged that Sabah’s constitutional financial safeguards had not been properly implemented for more than half a century.
The High Court directed that a joint review with the Sabah Government be conducted within 90 days and that agreement be reached within 180 days — a clear recognition that the constitutional mechanism to review Sabah’s special grant had been neglected for generations.
Instead of complying with the spirit of the judgment, the Federal Government has chosen to pursue legal manoeuvres, including an application for a stay of the order. This development sends a troubling message to the people of Sabah.
For more than fifty years, the constitutional safeguards designed to protect Sabah’s financial autonomy have not been properly implemented. The High Court decision represented a long-overdue attempt to restore constitutional compliance.
Yet today, Sabahans are witnessing a familiar pattern: public assurances of commitment, but delay and resistance in legal proceedings.
Let us be clear.
The 40% entitlement is not charity from Putrajaya.
It is not a goodwill payment.
It is not a discretionary grant.
It is a constitutional obligation owed to Sabah since the formation of Malaysia in 1963 under the Malaysia Agreement 1963.
The issue before the nation is therefore not whether Sabah deserves this entitlement.
The real question is whether the Federal Government is prepared to honour the Constitution.
The people of Sabah must also understand the enormous implications of this issue. Federal revenue derived from Sabah includes major sources such as petroleum income, taxation, customs revenue and other federal collections generated within the state.
If the constitutional formula is properly implemented, Sabah’s entitlement could amount to many billions of ringgit annually.
If this constitutional formula had been properly implemented since the 1970s, Sabah’s development trajectory could have been fundamentally different.
Schools, hospitals, roads and basic infrastructure across the state could have been financed through Sabah’s own constitutional revenue share.
Instead, Sabah remains one of the poorest regions in Malaysia despite being one of the richest in natural resources.
This reality raises a fundamental question that Sabahans must confront: how can a land so rich remain a people so poor?
For the indigenous communities of Sabah — particularly the MOMOGUN peoples who have lived on this land for generations — this issue carries even deeper meaning. The wealth generated from Sabah’s resources should have helped uplift rural communities, improve village infrastructure, strengthen native customary land protection, and provide better opportunities for the next generation.
When Sabah’s constitutional revenue rights are denied or delayed, it is these communities in the interior and rural districts who bear the greatest cost.
Sabah’s constitutional rights are therefore not an abstract legal issue — they are directly tied to the dignity, development and future of the people who call this land their ancestral home.
This case therefore carries implications far beyond Sabah.
If a clear constitutional provision can be ignored for decades and a High Court order delayed through procedural manoeuvres, it raises serious concerns about the integrity of constitutional governance in Malaysia.
The rule of law cannot survive if constitutional obligations are treated as optional.
BoPiMaFo therefore calls on the Sabah Government to stand firm in defending the constitutional rights of the state. Sabah must not be pressured into accepting a rushed or undervalued settlement simply to meet political timelines.
Any agreement reached must be subjected to full public scrutiny and transparency. The people of Sabah deserve to know the basis upon which their constitutional entitlement is calculated.
Any settlement that falls substantially below the constitutional formula would raise serious questions about whether Sabah’s rights have been properly defended.
A weak agreement today could lock Sabah into an unjust formula for generations.
If this constitutional entitlement is worth defending — and it is — then it must be defended fully, transparently, and without compromise.
This struggle is not merely about money.
It is about the integrity of the constitutional arrangements upon which Malaysia itself was formed.
The people of Sabah must now ask themselves a simple question: if a constitutional right clearly written in the Federal Constitution can remain unfulfilled for more than fifty years, what does that say about the place of Sabah within the federation?
This moment should serve as a wake-up call.
The future of Sabah cannot depend on promises that change with political convenience. It must be anchored in the firm enforcement of constitutional guarantees that were agreed upon when Malaysia was formed.
Sabah is not asking for charity.
Sabah is not negotiating for favours.
Sabah is demanding the enforcement of the Constitution of Malaysia.
The people of Sabah have waited more than fifty years.
Justice delayed for half a century must not now become justice denied.
Daniel John Jambun
President
Borneo’s Plight in Malaysia Foundation (BoPiMaFo)
Clearly someone with deep pockets is funding this mischief and the John Jambun and Robert Pei's of this world are not acting alone. Their attempts at destabilising government in this fashion appears to disregard the Constitutions prohibitions on treason in whatever form.
The 2025 Kota Kinabalu High Court ruling (Sabah Law Society v Government of the Federation of Malaysia & Anor, 17 October 2025, per Datuk Celestina Stuel Galid J) is narrowly framed as a declaratory and mandamus order between the two governments alone. It does not create any direct, self-executing right to immediate or retrospective cash payments that third parties can enforce.
The court declared that Sabah’s constitutional “special grant” entitlement under Article 112C (read with Part IV of the Tenth Schedule) , 40% of the net revenue derived by the Federation from the State above the 1963 baseline “remains due and payable” for each financial year from 1974 to 2021 (“the Lost Years”). It also held that the Federal and Sabah Governments breached their duty by failing to conduct the mandatory periodic reviews required by Article 112D since 1974.
The operative remedies granted were strictly procedural and inter-governmental:
i) Certiorari quashing only those parts of the 2022, 2023 and 2025 Review Orders that omitted the Lost Years.
ii) Mandamus compelling the Federal Government and the State Government of Sabah (the proper constitutional parties) to conduct the Article 112D review for 1974–2021 and reach agreement on the quantum within 90 days for the review and 180 days for final agreement.
iii) Consequential orders that the Federal Government must then pay whatever sum is determined by that review (or as “constitutional damages”/accounting thereafter).
There is no court-ordered fixed sum, no automatic payout, and no mechanism for the judgment to be executed without the two governments first agreeing (or referring the matter to the Yang di-Pertuan Agong under Article 112D(6) if they fail to agree). The ruling explicitly defers the actual calculation and disbursement to bilateral negotiation between Putrajaya and the Sabah State Government.
Daniel John Jambun and BoPiMaFo have no role and no enforceable rights under this judgment. The case was brought by the Sabah Law Society in a public-interest judicial review. BoPiMaFo was not a party, was never granted standing, and holds no constitutional or statutory mandate to represent the State of Sabah. Malaysian courts have consistently held that only the State Government (or, in limited public-interest litigation, bodies like the Sabah Law Society) can enforce inter-governmental constitutional revenue obligations. An NGO cannot issue demands, file contempt applications, or prosecute non-compliance on behalf of the State. Any suggestion otherwise misstates both the judgment and settled principles of locus standi.
The ruling leaves untouched the Federal Government’s exclusive powers over minerals, oil and gas. Petroleum remains vested in Petronas under the Petroleum Development Act 1974 (a federal law that applies nationwide, including Sabah and Sarawak waters). The special grant formula concerns only net federal revenue derived from Sabah (mainly taxes), after statutory deductions, it does not override federal ownership, licensing, or regulatory control of resources. The judgment itself notes Sabah’s mineral and petroleum wealth only to highlight developmental needs; it contains no finding that the PDA is unconstitutional or that states regain exclusive exploration rights.
Decades of historic acquiescence further limit any aggressive enforcement. From 1974 until the 2025 suit, successive Sabah governments accepted the federal regime (5% royalty, small capped grants, no Article 112D reviews) without legal challenge.
The court acknowledged the 48-year delay but fashioned the remedy as a forward-looking review process rather than imposing a court-calculated multi-billion-ringgit retrospective debt. This deference reflects the practical and legal reality that long-standing acceptance of the federal distribution framework weakens claims for immediate, unilateral enforcement. As of March 2026, the Federal Government has filed a limited appeal/stay application on certain aspects of the judgment while negotiations continue , exactly the government-to-government process the court mandated.
In short, the High Court ruling vindicates the existence of a review right and declares a constitutional debt in principle. It creates no enforceable payment right that Daniel John Jambun or BoPiMaFo can rely upon or prosecute. It does not diminish federal supremacy over minerals and offshore resources, nor does it erase the legal and practical consequences of the two states’ long acquiescence to the existing federal framework. Any actual distribution of funds remains a matter for negotiation between the elected governments , not for an NGO without a lawful and constitutionally enforcedable mandate.