By Daniel John Jambun, Borneo’s Plight in Malaysia Foundation (BoPiMaFo)
KOTA KINABALU: Borneo’s Plight in Malaysia Foundation (BoPiMaFo) sets out the legal position concerning Sabah’s entitlement to 40% of net revenue collected by the Federation, and its status within the Basic Structure of the Federal Constitution, as recognised in Malaysian constitutional jurisprudence.
1. CONSTITUTIONAL BASIS OF THE ENTITLEMENT
Sabah’s entitlement arises from Articles 112C and 112D of the Federal Constitution, read together with the Tenth Schedule.
These provisions establish:
a mandatory and formula-based financial entitlement;
a continuing constitutional obligation on the Federal Government;
a structural component of the Federation–State financial arrangement.
This entitlement is therefore constitutional in nature, and not subject to executive discretion or policy preference.
2. RECOGNITION OF THE BASIC STRUCTURE DOCTRINE IN MALAYSIA
The Federal Court of Malaysia has affirmed the existence and applicability of the Basic Structure Doctrine, which holds that certain fundamental features of the Constitution cannot be abrogated, even by constitutional amendment.
This principle has been authoritatively recognised in, inter alia:
Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat
Indira Gandhi a/p Mutho v Pengarah Jabatan Agama Islam Perak
In these decisions, the Federal Court held that:
the Federal Constitution has an underlying basic structure;
judicial power, separation of powers, and constitutional supremacy are among its core features;
Parliament’s amending power under Article 159 is not unlimited, and cannot be exercised to destroy fundamental constitutional features.
3. SABAH’S 40% ENTITLEMENT AS PART OF THE BASIC STRUCTURE
BoPiMaFo submits that Sabah’s 40% revenue entitlement properly falls within the basic structure of the Constitution, for the following reasons:
(a) Foundational to the Formation of the Federation
The financial safeguards accorded to Sabah were part of the original constitutional design upon the formation of Malaysia, reflecting negotiated federal terms.
(b) Integral to Federal Balance
The entitlement under Articles 112C and 112D is essential to maintaining:
the fiscal autonomy of Sabah;
the equilibrium between Federal authority and State rights.
Such balance is a recognised feature of federal constitutional structure.
(c) Structural, Not Merely Administrative
The entitlement is not a discretionary grant, but a constitutionally entrenched mechanism, forming part of the institutional framework governing Federal–State relations.
(d) Protection Against Erosion
Any sustained failure to implement, delay, or dilute this entitlement raises issues not merely of non-compliance, but of erosion of a constitutionally protected structural guarantee.
4. EFFECT OF THE HIGH COURT DECISION
The High Court decision of 17 October 2025 affirmed that:
the obligation under Articles 112C and 112D is justiciable and enforceable;
the Federal Government is under a continuing public duty;
mandamus may issue to compel compliance.
This reflects the principle that constitutional provisions are not symbolic, but legally operative and enforceable.
5. LEGAL EFFECT OF THE STAY OF EXECUTION
The stay granted by the Court of Appeal:
does not extinguish the constitutional entitlement;
does not negate the High Court’s legal reasoning;
operates only to temporarily suspend enforcement pending appeal.
The underlying constitutional obligation therefore remains intact and subsisting.
6. CONTINUING BREACH AND CONSTITUTIONAL ACCOUNTABILITY
The obligation under Articles 112C and 112D is continuing in nature.
Accordingly:
prolonged inaction may constitute a continuing breach of constitutional duty;
such breach is capable of attracting public law remedies, including judicial review;
where structural constitutional guarantees are implicated, the Court retains a supervisory role to safeguard the Constitution’s integrity.
7. CONSTITUTIONAL SUPREMACY AND STRUCTURAL INTEGRITY
Article 4(1) affirms that the Constitution is the supreme law of the Federation.
As clarified by the Federal Court in Semenyih Jaya and Indira Gandhi:
supremacy extends beyond text to constitutional structure;
courts are duty-bound to protect fundamental features from erosion.
Sabah’s financial entitlement must therefore be understood within this broader framework of constitutional protection.
In summary:
Sabah’s 40% revenue entitlement is a constitutionally entrenched right under Articles 112C and 112D;
it forms part of the structural financial safeguards within the Federation;
it engages the Basic Structure Doctrine as recognised by the Federal Court;
it remains legally subsisting notwithstanding the stay of execution;
and it imposes a continuing constitutional obligation on the Federal Government.
BoPiMaFo emphasises that any approach to this საკითხ must be grounded in the supremacy of the Constitution and the preservation of its basic structure, as affirmed by the highest court of the land.
