On November 10, 2025, Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor announced that his state is finalising a legal team to sue Penang, seeking to renegotiate a supposed “lease” agreement from the 18th century. Kedah claims Penang Island and Seberang Perai were leased to the British in 1786 and 1800 for annual payments, justifying demands for up to RM100 million yearly—far above the current RM10 million federal honorarium.
While Sanusi’s move taps into historical pride and political posturing, legal experts, historians, and constitutional realities suggest this case is a non-starter. Here’s why Kedah’s court battle is almost certain to collapse.
The Constitution Trumps All
Malaysia’s Federal Constitution is the nation’s supreme law, as stated in Article 4(1). Article 1(2) explicitly lists Penang as a sovereign state, equal to Kedah and others, with no mention of territorial disputes or historical debts. The Federation of Malaya Agreement of 1957, which birthed modern Malaysia, integrated Penang without reservations from Kedah.
Constitution explicitly recognizes Penang’s independence; historical claims cannot reopen state boundaries without amendment (Article 159).
Legal scholars like Andrew Khoo argue that revisiting pre-Merdeka arrangements would require a constitutional amendment—a near-impossible feat needing a two-thirds parliamentary majority and the Conference of Rulers’ consent. Sanusi’s claim, rooted in 200-year-old history, cannot override this framework. Courts have consistently upheld constitutional supremacy in similar disputes, such as Sabah’s claims against Sulu, leaving Kedah’s case on shaky ground.
No Lease, Just History
Kedah’s argument hinges on a 1786 “lease” for Penang Island and a 1800 deal for Seberang Perai, allegedly for 10,000 Spanish dollars annually. However, historians like R. Bonney and Datuk Dr. Ahmad Murad Merican debunk this, noting no formal lease document exists.
No formal lease document exists; 1786 events were a British “conquest” or occupation without treaty. Kedah Sultan lacked sovereignty (as a Siamese vassal), per nemo dat quod non habet (cannot convey what one doesn’t own). Burney Treaty (1826) nullified any lease by recognizing Penang as British territory.
The 1786 arrangement was an informal deal between a vulnerable Kedah Sultan—under Siamese pressure—and British opportunists led by Francis Light. Payments were sporadic, later reframed as ex-gratia pensions for an exiled Sultan after Siam’s 1821 invasion.
The Burney Treaty of 1826, signed between Siam and Britain, recognized Penang as British territory, nullifying any Kedah claim. Thai records even treat Penang as Siam’s loss, not Kedah’s. Without a binding contract, Sanusi’s legal team faces an uphill battle proving an enforceable obligation.
Merdeka Closed the Door
When Malaysia gained independence in 1957, Kedah signed onto the Federation Agreement without reserving claims over Penang. The RM10,000 annual payment (increased to RM10 million in 2018) is a federal goodwill gesture, not an admission of a lease.
Kedah signed independence agreements without reserving claims, relinquishing rights.
Constitutional lawyer Mohamed Haniff Khatri Abdulla calls Kedah’s demands “daft,” arguing that Merdeka effectively ceded any historical rights.
Courts are unlikely to entertain equity-based claims when the Constitution and independence agreements are clear. Penang Chief Minister Chow Kon Yeow’s challenge—“See you in court”—reflects confidence that no legal documents support Kedah’s case, as none have surfaced despite years of rhetoric.
Courts Don’t Rewrite History
Sanusi’s push, backed by a 2025 research report and Sultan Sallehuddin’s call for transparency, may resonate emotionally but falters legally. Malaysian courts prioritize statute over historical grievances, as seen in cases dismissing colonial-era claims. Even if Kedah argues for “revaluation” under Article 167(7) (pre-Merdeka payments), the discretionary nature of the honorarium undermines their case.
Federal MPs like Ramkarpal Singh and backbencher Datuk Tarmizi Mohamad have reiterated in Parliament (November 2025) that the Constitution nullifies such disputes. Litigation risks dismissal on lis pendens (settled matter) or lack of standing, as Kedah cannot sue another state over federal matters.
Political Noise, Not Legal Weight
Sanusi’s aggressive rhetoric, including calling Penang leaders “arrogant,” suggests a political motive—bolstering his base ahead of elections. However, experts like Clement Liang of Penang Heritage Trust warn that this “unproductive polemic” distracts from development. The lack of concrete legal filings as of November 2025, despite years of threats, hints at a weak case. If Kedah proceeds, courts will likely rule swiftly in Penang’s favor, reinforcing constitutional unity over divisive history.
Why Penang’s Case Prevails
- Supremacy of the Constitution: Malaysian law (Article 4) treats the Federal Constitution as the highest authority. It was drafted post-Merdeka to unify states as equals, extinguishing colonial-era disputes unless explicitly preserved (which wasn’t done here). Reopening this would require constitutional amendment—a high bar needing 2/3 parliamentary majority and Conference of Rulers’ consent.
- Weak Historical Evidence: The “lease” is a myth per multiple sources; it was an informal deal amid Kedah’s vulnerability to Siam/Burma. Payments post-1821 were pensions to appease the exiled Sultan, not royalties. Thai records even claim Penang as Siamese loss, not Kedah’s.
- Precedent and Policy: Similar disputes (e.g., Sabah/Sulu claims) fail when challenging constitutional boundaries. The federal honorarium is discretionary goodwill, not enforceable debt—Kedah’s demand to “revalue” it ignores this.
- Potential Outcomes: If sued, courts would likely dismiss on lis pendens (settled matter) or supremacy grounds. Kedah’s recent research (April 2025 report) may bolster narrative but not override law.
