Sabah and Sarawak formed Malaysia as Partnership with Federation of Malaya in 1963!
By Joe Fernandez
Commentary And Analysis . . . The jurist must state the law plainly. Malaysia was formed in 1963 as partnership. The Federation of Malaya 1957 did not cease existence in 1963. Sabah and Sarawak helped form Malaysia with conditions codified in MA63 and the 20 Points and 18 Points.
The current disputes are not about secession. They are about performance of contract. The 5 percent oil royalty versus the demand for 20 percent. The non-implementation of Article 112D and the 40 percent revenue return. The partnership government’s encroachment on immigration, education, and language.
Controversies will not end unless there was closure. Legal closure was attempted in 2021. Political closure requires three things: acknowledgement of the partnership narrative in public discourse, fulfillment of the financial terms in MA63, and consistent use of language that reflects the constitutional reality.
As long as “Tanah Melayu” was used as shorthand for “Malaysia”, the wound remains open. The media will keep bringing it back into the public eye. The people of Sabah and Sarawak will keep remembering, because the law told them in 1963.
The name on the birth certificate was Malaysia. Not Malaya. Not Tanah Melayu. The sooner the law and the language align, the sooner the controversy ends.
“The truth, once it emerges, cannot be hidden.”
The truth was that Malaysia was not an enlarged Malaya. It was new entity formed in 1963 by four partners. The truth was that Sabah and Sarawak entered with conditions. The truth was that those conditions have not been fully honoured.
This truth must not be hidden. It must be shouted from the rooftops. It must be addressed. The rule of law must be restored.
The law remembers what the public forgets. In constitutional law, memory matters because names define rights.
For two weeks an issue was news. After two weeks it becomes memory. If it persists past two weeks, it becomes controversy. If controversies die, there was legal and political closure. The question of “Tanah Melayu” and “Malaysia” was now such controversy in Sabah and Sarawak. It persists because it was never closed in 1963, and because the media keeps faces and names in the public eye.
The Legal Distinction
In constitutional law, the Federation of Malaya did not expand. It did not dissolve into a new entity.
Period: 31 August 1957 – 15 September 1963
The Federation of Malaya was sovereign state of 11 states. It was governed by the Federal Constitution 1957. It joined the United Nations on 31 July 1957 as “Federation of Malaya”.
Period: 16 September 1963 – Present
On 16 September 1963, the Constitution of Malaysia came into force. Article 1(1) states: “The Partnership (Federation) shall be known as Malaysia” . Article 160(2) redefined “the Federation” as the Partnership of Malaysia.
This was not an amendment. This was the creation of a new legal person in international law. The parties were four: the Federation of Malaya, Sabah in North Borneo, Sarawak, and Singapore. The instrument was the Malaysia Agreement 1963 (MA63) .
In calling post-1963 Malaysia as “Tanah Melayu” or “Malaya”, it was therefore misnomer. “Malaya” refers as the 11 states of the southern Kra Peninsula from Perlis untik Johor. It’s geographical and cultural term as nation-state. It was never the name of the post-1963 partnership.
The 11 states of the Federation of Malaya continue as they became part of the new Partnership of Malaysia. The entity “Federation of Malaya” did not cease existence on 16 September 1963.
The Partnership Principle
The legal significance of MA63 was that it records consent. Sabah and Sarawak did not “join” Malaya. They agreed, as equal partners, on forming Malaysia with Malaya and Singapore.
Article 1 of MA63 states:
“The Colonies of North Borneo and Sarawak and the State of Singapore shall be partnered (federated) with the existing States of the Federation of Malaya as Sabah, Sarawak and Singapore in accordance with the constitutional instruments annexed to this Agreement and the Partnership shall thereafter be called ‘Malaysia’.”
This isn’t the language of absorption. It’s the language of partnership. Sabah and Sarawak did not join Malaya. They partnered with the existing states of Malaya on creating new entity.
That’s why Sabah and Sarawak are not “State 12 and State 13”. Constitutionally they entered as “regions” with entrenched safeguards. The 20 Points of Sabah and the 18 Points of Sarawak, together with the Cobbold Commission Report, form part of the consideration for that consent.
About 90 per cent of the demands in both documents overlap. The core demands were:
Immigration Control: Partnership Government cannot freely move people into Sabah or Sarawak.
Religion and Education: No religion in Borneo territories. English remains language of law and administration.
Land and Natural Resources: Land, forests, oil and gas under territorial jurisdiction. Article 112D provides for 40 per cent of net revenue collected by the Partnership Government returned.
Language: English retained in Sabah and Sarawak courts and legislature.
Parliamentary Representation: One-third of Parliament seats allocated for Borneo and Singapore. This ratio was meant on protecting Borneo’s voice even after Singapore’s exit.
Judiciary: A separate Borneo Judiciary
The 20 and 18 Points are proof of conditional consent. They are not wish list. They are evidence that sovereignty was pooled, not surrendered.
The Cobbold Commission, established in 1962 for determining whether the people of North Borneo (Sabah) and Sarawak supported the proposal on Malaysia, concluded that the formation should be implemented. Lord Cobbold stressed that all parties should enter Malaysia as partners. This was foundational for the legal architecture of Malaysia.
The Malaysia Agreement 1963 was registered with the United Nations. This gives it higher legal status than ordinary legislation and means it cannot be unilaterally amended by one party.
The Chronology of Conflict
A controversy persists because the law made promises that politics did not fully keep.
Formation Phase
In 1946 until 1948, the Malayan Union was failed centralisation attempt. In 1948, the Federation of Malaya was established with 11 states. On 31 August 1957, the Federation of Malaya became independent.
In 1961 and 1962, Tunku Abdul Rahman proposed the merger of Malaya with Singapore, Sabah, Sarawak, and Brunei. The Cobbold Commission was held in Borneo. In July 1963, the Malaysia Agreement was signed in London by the United Kingdom, the Federation of Malaya, Sabah in North Borneo, Sarawak, and Singapore.
On 16 September 1963, Malaysia Day marked the formation of Malaysia through MA63 with four partners. On 9 August 1965, Singapore left Malaysia. Borneo’s one-third parliamentary safeguard was diluted.
Post-Formation Conflict
From 1965 until 1974, oil negotiations culminated in the Petroleum Development Act 1974. Petronas was formed. Sabah and Sarawak ceded oil ownership for a 5 percent royalty. This became the single biggest grievance.
In 1976, a constitutional amendment was passed. Article 1(2) was amended, and Sabah and Sarawak were described as “one of the States”. In Borneo this was read as a downgrade from “partner”. This was the central event in the narrative of rights erosion.
From the 1980s until the 2010s, the MA63 “erosion” narrative grew. Perception grew that immigration, education, and revenue autonomy were not honoured. The 40 percent revenue return under Article 112D was never implemented.
In 2019, the first amendment attempt on restoring “partner” language failed in the Senate.
In 2021, the Constitution Amendment Act was passed. Article 1(2) and Article 160 were amended. The wording “partner” was restored in spirit. Malaysia was described as comprising the Federated States of Malaya and the Borneo Territories of Sabah and Sarawak.
From 2022 until the present, the MA63 Council has been conducting ongoing negotiations on the 40 percent revenue return and the devolution of health and education powers.
In October 2025, the High Court ruled on the 40 percent revenue entitlement. The court affirmed Sabah’s 40 percent revenue entitlement and declared the partnership government’s failure unlawful. The partnership government has appealed.
Juristic Analysis
Law was about categories. When Malayan politicians and media use “Tanah Melayu” or “Malaya” for all Malaysia, they commit category error with constitutional consequences.
First, it erases the juristic fact of partnership. If Malaysia was just “enlarged Malaya”, then Sabah and Sarawak are mere accretions. If Malaysia was new entity formed in 1963, then Sabah and Sarawak are co-founders.
Second, it weakens the argument for MA63 rights. The rights that flow from partnership cannot be treated as concessions from superior for inferior.
Third, it explains the persistence of the grievance. Human beings forget policy details in two weeks. What they remember was the name and the face. When Borneo leaders appear in media and say “we are not Malaya”, they are not being petty. They are performing the act of remembering for the public. Without that repetition, the legal distinction dies in public memory.
The 2021 amendment on Article 1(2) restored the language of partnership. However, language without implementation was just on paper. The words in the Constitution must translate into reality. The 40 percent revenue entitlement, the oil royalties, and the autonomy over immigration and education are not concessions. They are conditions of the partnership.
Unfinished Business
The 40 Percent Revenue Entitlement
Under Articles 112C and 112D of the Federal Constitution, Sabah was entitled for 40 percent of the net revenue derived by the partnership government from the state. The Kota Kinabalu High Court affirmed this right on 17 October 2025, declaring that the partnership government’s failure on honour it for nearly five decades was unlawful. The estimated amount owed to Sabah since 1963 was approximately RM136.3 billion.
Sarawak, by contrast, has different constitutional framework under Article 112D. It currently receives an interim Special Grant of RM600 million while negotiations continue. Do not conflate the two partners, their legal frameworks are distinct.
Oil and Gas Royalties
Sabah and Sarawak currently receive 5 percent oil and gas royalties. They have demanded 20 percent. The Petroleum Development Act 1974, signed by Sabah and Sarawak Chief Ministers at the time, was seen by the partnership government as valid surrender of oil rights. In Borneo, it’s seen as the single biggest grievance. This remains unresolved.
Parliamentary Representation
MA63 envisaged one-third of parliamentary seats for Sabah, Sarawak, and Singapore. Some argue that as equal partners, Sabah and Sarawak should hold 66.67 percent of seats. The partnership government has agreed in principle on increasing parliamentary seats for Sabah and Sarawak, but differing legal views between partnership government and partner authorities must first be resolved.
Paper States
Without full implementation of MA63, Sabah and Sarawak remain “paper states”—states with constitutional rights that are not enforced. The 2021 amendment restored the language, but the substance—the 40 percent revenue, the oil royalties, and the immigration control—remains contested.
Problem of Closure
Human beings forget anything after two weeks. All they remember are names and faces. Nothing becomes an issue unless it’s in the media. If an issue does not go away in two weeks, it becomes controversy. Controversies will not end unless there’s closure.
The MA63 controversy has been in the public eye for decades. It has not been resolved. The 1976 amendment was not matter of public debate; it was quiet erosion of rights. The 2021 amendment restored the language of partnership, but the substance remains contested.
The media helps bring in the votes for those who remain in the public eye. Borneo leaders who speak on MA63 remain in the public eye because they keep speaking. The media keeps them there because the issue was unresolved. The public remembers the faces and the names, not the annexes on MA63.
Closure requires more than meetings. It requires an agreement, an implementing mechanism, and guarantees. Without these, the controversy will continue drifting, and the people of Sabah and Sarawak will continue seeing themselves as partners in name only. — TJT
Longtime Borneo watcher Joe Fernandez has been writing for many years on both sides of the Southeast Asia Sea. He should not be mistaken for a namesake formerly with the Daily Express in Kota Kinabalu. JF keeps a Blog under FernzTheGreat, as jurist (legal scholar), on the nature of human relationships.
DISCLAIMER: The views expressed here are those of the author/contributor and do not necessarily represent the views of Jesselton Times.
