Camdex International Ltd v Bank of Zambia & Anor

A statutory exchange-control direction supported only by criminal sanctions and lacking provision for civil recovery does not ordinarily create a private-law cause of action in debt. Accordingly, foreign currency held for a central bank under such a regime cannot be attached by its judgment creditor through garnishee proceedings.

In alternative reasoning, the court indicated that an obligation to pay a stipulated sum in foreign currency is ordinarily a money obligation, not an exchange of commodities. Recognition of foreign exchange controls is distinct from enforcement of foreign public law. A garnishee order also requires funds already in the garnishee’s hands. If a recoverable debt had existed, policy and comity would not themselves have barred attachment.

Camdex acquired assigned claims against the Bank of Zambia and obtained an English judgment for their recovery. It sought to make absolute a garnishee order nisi attaching foreign currency held in London by Zambia Consolidated Copper Mines Ltd, which was required under a Bank of Zambia direction to pay 45% of its metal proceeds to the Bank.

Morison J refused to make the order absolute, holding that the direction created no debt, or at most a claim in damages, and identifying a possible risk of double liability. The appeal concerned whether the direction created a civil cause of action, whether any liability was a debt attachable under Order 49, whether English courts could enforce the Zambian exchange-control regime, and how the discretion should be exercised.

1. Disposition. The appeal was dismissed unanimously. Simon Brown LJ treated the absence of a civil cause of action as the fundamental ground. Phillips LJ reached the same result by concluding that the Direction imposed a public-law obligation enforceable only through the statutory sanctions. Otton LJ agreed with both judgments.
2. Garnishee jurisdiction. Simon Brown LJ explained that Order 49 gives debt due or accruing a wide meaning, but attachment requires funds already in the garnishee’s hands when the application is made. Prospective proceeds which have not yet been received cannot be attached. The point was stated as guidance for any later recovery proceedings.
3. Civil remedy. The existence of a statutory duty to pay money does not automatically create a civil action. Each statutory scheme must be considered on its own terms. The Bank of Zambia (Foreign Currency) Regulations 1994 were headed as offences relating to foreign currency, imposed criminal liability for contravention of regulation 3, and contained no civil recovery provision. The direction was not contractual. The statutory context and the Bank’s governmental control over ZCCM showed that no private-law action in debt was intended or available.
4. Foreign public law. Simon Brown LJ further held, alternatively, that enforcement of the direction would be enforcement of Zambian public law and would be barred in England. Recognition of exchange-control legislation, including under Bretton Woods principles, was different from enforcing it at the suit of a foreign public authority. Phillips LJ regarded the point as hypothetical and expressed less confidence, but treated the public-law character of the obligation as an additional reason why attachment should not lie.
5. Debt and discretion. Both reasoned judgments rejected the commodity theory of foreign currency. An obligation to pay a specified currency is ordinarily a money obligation and, if civilly enforceable, would be a debt rather than merely a claim for damages. Simon Brown LJ would not have refused attachment on policy, comity or double-liability grounds, since any risk was fanciful. Phillips LJ stated that, even if a debt existed, attachment would be objectionable because the Bank was not shown to be beneficially entitled, set-off issues arose, and Zambia was the appropriate forum.
6. The order below therefore stood. Leave to appeal to the House of Lords was refused.

1. Court of Appeal (Civil Division): In [1997] EWCA Civ 798, the appeal from Morison J was dismissed and leave to appeal to the House of Lords was refused.
2. High Court of Justice, Queen’s Bench Division: Morison J refused on 24 May 1996 to make absolute a garnishee order nisi obtained against Zambia Consolidated Copper Mines Ltd.