Attorney-General of Belize v Belize Telecom Ltd [2009] UKPC 10
Whether term regarding director’s vacating office could be implied into company articles
Facts
The Belize government established a company to take over the country’s telecommunications services. The articles of association provided the holder of the ‘special’ share who also owned 37.5% of the share capital, could appoint directors. Belize Telecom (BT) purchased the ‘special’ share, the requisite share capital and appointed directors. BT then went into financial difficulties and ceased to hold the 37.5% share. The articles made no provision for the removal of these appointed directors, and the attorney-general sought a declaration that a term should be implied into the articles that such appointed directors should vacate office.
Issues
BT argued that since the articles were silent as to the removal of the appointed directors, they were irremovable, unless they chose to resign. BT contended the court had no power to introduce new terms into the articles of association. The attorney general argued it would be absurd if there was no means of removing such appointed directors and, where a director is appointed by virtue of a specific shareholding, it should be an implied term that when there is no longer such a shareholding in existence, that director should resign.
Decision/Outcome
The term was successfully implied into the contract. When considering whether terms are implied, the court cannot imply terms simply to make a contract more reasonable or more efficient. The court should consider the construction of the agreement as a whole, and discern what the contract as a whole means. If the agreement is silent as to a particular provision, it can be implied only if the court finds the parties must have intended it to be incorporated.
Updated 19 March 2026
This summary remains accurate as a description of the Privy Council’s decision in Attorney-General of Belize v Belize Telecom Ltd [2009] UKPC 10 and Lord Hoffmann’s approach to implied terms at the time it was decided.
However, readers should be aware that the legal test for implying terms into contracts has since been significantly refined by the Supreme Court. In Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, the Supreme Court clarified that the implication of terms is a distinct exercise from contractual construction, and that a term will only be implied if it is necessary to give the contract business efficacy or if it satisfies the ‘obvious inference’ test — not merely because it would be reasonable. The Supreme Court distanced itself from some of Lord Hoffmann’s broader statements in Belize Telecom to the effect that implication is simply part of the process of construction. This distinction is important and is now the leading authority on implied terms in English and Welsh contract law. Students relying on Belize Telecom should read it alongside Marks and Spencer v BNP Paribas and should note that the article’s summary of the test, while not wholly wrong, does not reflect the current position in full.
