¶ … Attorney-General of Belize v Belize Telecom Ltd. [2009] UKPC 10, [2009] 2 All ER 1127 Privy

Council

This is an icon case regarding the proper interpretation and implication of the terms in a firms articles of association. The government of Belize privatized its telecommunication sector in 1989 after years of monopoly since 1974. This move triggered the transfer of assets and shares from Belize Telecommunications Authority's to a private company called Belize Telecommunications. In the deal, the government was to retain a golden share of which the constitution allowed the appointment 2 out of the 8 directors. In addition the government as a golden shareholder referred to as class "C" with over 37.5% of the total share capital was also allowed to appoint 2 more directors. Therefore, the government was allowed to appoint 4 of the eight directors.

After the completion of the privatization process, competition was...

Here, the government turned its share into debts and as collateral until the full repayment of the money, Belize Telecommunications pledged the same shares except the special share. Year later the company defaulted on the re-payments, which forced the government to enforced the pledge. This resulted to a stalemate as no party held the special share and the 37.5%. Therefore, it was not clear which director held the special share as the company's constitution lacked provisions about the situation.
A new government was elected in 2008 and pledged to fight corruption and introduce honesty in government activities. It sought to change the board, a move that was opposed by Belize Telecom arguing that its two directors could not be changed. The governments through the Attorney General counter argued that the articles were clear…