Political Analysis: UPKO-PH Sabah’s Withdrawal of the 40% Lawsuit – A Strategic Exercise of Power, Not a Retreat from Principle

By Mohd Khairy Abdullah @ DG Henry
SOOK (Sabah, Malaysia), 23 October 2025 – The decision by Pakatan Harapan (PH) Sabah, led by UPKO, to withdraw its legal action against the Federal Government regarding the 40% revenue entitlement is not an act of surrender or political weakness. Rather, it reflects a strategic recalibration of power within Malaysia’s federal system.

When viewed through the lens of international federalism—such as in Germany, Canada, and Australia—this move aligns with global norms where sub-national entities advance their constitutional rights more effectively through executive negotiation rather than litigation when they are part of the governing coalition.

Sabah is not merely one of Malaysia’s thirteen states; it is a founding entity of the Federation, as enshrined in the Malaysia Agreement 1963 (MA63), an internationally recognised treaty acknowledged by the United Nations. The 40% special grant is not a political demand—it is a constitutional obligation tied to Sabah’s sovereignty under the Federation framework. However, the political dynamics shifted dramatically after Malaysia’s 15th General Election (GE15), necessitating a change in strategic approach.

GE15 produced a hung parliament—the first in Malaysia’s history—triggering a negotiation-driven approach to government formation. In line with Westminster conventions, the coalition with the highest potential support, led by Anwar Ibrahim, was invited to form the government. Sabah, through UPKO and PH Sabah, became a pivotal part of the new ruling coalition. In this reality, continuing to sue the very government in which Sabah leaders now serve in cabinet would contradict the constitutional principle of collective ministerial responsibility.

In modern federal theory, legal action is typically used only when political channels are inaccessible. Once PH Sabah became part of the federal administration, the strategic battlefield shifted. Judicial confrontation would no longer yield maximum influence; executive participation offers greater leverage. Withdrawing the lawsuit is therefore not the end of the struggle—but its evolution from adversarial litigation to institutional negotiation.

Opposition parties have attempted to weaponise this withdrawal as political betrayal. However, in global governance systems, power is not defined by protest but by access to decision-making institutions.

By leading a federal ministry, Datuk Ewon Benedick is no longer an outsider demanding rights—but a national decision-maker empowered to enact them from within. This represents a significant elevation in political leverage, not a dilution of Sabah’s cause.

What we are witnessing is not a termination of Sabah’s demand for the 40% entitlement, but a shift in the arena of struggle—from courtroom confrontation to cabinet diplomacy. This is the hallmark of mature political strategy in contemporary federations. Just as Quebec in Canada, Bavaria in Germany, and Catalonia in Spain have recalibrated their approaches to autonomy within the structure of the state, Sabah is pursuing its constitutional rights not through confrontation, but through strategic consolidation of institutional power.

The withdrawal of the lawsuit is a geopolitical manoeuvre grounded in wisdom and pragmatism. It recognises a timeless truth in statecraft: sovereignty is not only defended in courts—but exercised through power within the government itself. For Sabah, this marks not a retreat, but the beginning of a new phase in reclaiming its constitutional rights through executive influence and strategic engagement.