Time to say goodbye: Privy Council decision on contractual notice and termination

10/03/26

On 2 March 2026, the Privy Council handed down judgment in Anheuser-Busch International Ltd v Commonwealth Brewery Ltd [2026] UKPC 8. The Judgment, delivered by Lord Hodge, provides authoritative guidance on the principles applicable to what constitutes a reasonable notice period of termination in the absence of an express contractual term stipulating the requisite notice period.

Background

In 1975, Burns House Ltd (“BHL”) and Anheuser-Busch International Inc (“ABI”) entered into an oral exclusive distribution agreement under which BHL distributed ABI’s beer products in the Bahamas. The agreement was never reduced to writing and continued for around 40 years until ABI terminated it in 2015 on three months’ notice. It was common ground that the agreement contained an implied term requiring reasonable notice of termination. The dispute concerned what period of notice was reasonable. BHL contended that reasonable notice was three and a half years rather than the three months given by ABI.

At first instance, Charles J in the Supreme Court of the Bahamas held that reasonable notice was 15 months. The Court of Appeal disagreed, holding that the range of reasonable notice was three to six months, and that the three and a half months notice given by ABI fell within that range. The Privy Council upheld the decision of the Court of Appeal.

The Judgment

The Board articulated the principles for when to imply a reasonable notice at [49].

The Board then laid down a list of seven non-exhaustive factors in respect of assessing what amounts to a reasonable period: (i) the formality of the contract [57]; (ii) the duration of the business relationship [58]; (iii) the importance of the relationship to the recipient’s business [59]; (iv) the extent to which the recipient has invested financial, management, personnel resources into the relationship [60]; (v) the extent to which the recipient incurred extraordinary capital or business expenditure [61]; (vi) any other details in difficulties in terminating the relationship [62]; (vii) the obligation of both parties to continue to perform their contractual obligations during the notice period [64].

Tony Singla KC and Ali Al-Karim acted for the Appellant, Commonwealth Brewery Ltd, instructed by Delaney Partners (Bahamas).