PUTRAJAYA: The Court of Appeal has allowed the government’s application to temporarily suspend the Kota Kinabalu High Court's order linked to Sabah’s entitlement to 40% return of revenue rights.
A three-member panel, chaired by Justice Mohamed Zaini Mazlan, granted the stay pending disposal of the appeal.
Other judges on the Bench were Justices Ismail Brahim and K. Muniandy.
In the unanimous decision, Justice Mohamed Zaini said that the government, as the applicant, would be prejudiced if a stay was not granted.
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"First, there is a real risk of non-compliance with the timelines imposed by the High Court, which, given the scope and complexity of the exercise, seem onerous.
"Second, the impugned orders may not align with the constitutional framework under Article 112D of the Federal Constitution, particularly with respect to the mechanism for resolving disputes," he said here on Monday.
If the court order was enforced before the appeal is heard, this would deprive the applicant of an opportunity to ventilate its challenge against the decision, the judge said.
The Court of Appeal also noted that the High Court's order not only directed negotiations but also required the applicant to make payment from the Federal Consolidated Fund within 180 days of the High Court’s Order, which will end soon on April 15.
"This could have serious financial consequences, especially given the current challenging global economic climate.
"Under Article 112D, any review must consider the applicant’s financial position in relation to the needs of the second respondent (Sabah state government). The imposed timelines may not give the parties enough opportunity to determine the correct quantum payable.
"The payments ordered are of such magnitude that their execution, prior to the determination of the appeal, would create a fait accompli," Justice Mohamed Zaini said.
The court was also satisfied that the applicant confirmed it had no intention to delay proceedings and had taken measures to expedite the hearing of its appeal.
"We are therefore satisfied that special circumstances have been established.
"The applicant would suffer prejudice if a stay is refused, and the appeal may be rendered nugatory.
"Accordingly, we allow the application and grant a stay of execution in terms of the applicant’s motion," Justice Mohamed Zaini said.
The court made no order as to costs.
On Oct 17, last year, the Kota Kinabalu High Court ruled that the federal government had acted unlawfully by failing to honour Sabah’s right to 40 per cent of net federal revenue from 1974 to 2021.
The High Court ordered both governments to complete a review within 90 days and reach a final agreement within 180 days following a judicial review brought by Sabah Law Society.
