Legal Consent Under Scrutiny: ‘Super Cash Back Gold’ Settlement Agreements Challenged

Qs & As

‘While settlement agreements are legally binding once signed, they can be contested if there is clear evidence of fraud, duress, or other factors that invalidate consent’

By Lex

The case involves 92 ‘Super Cash Back Gold’ (SCBG) policyholders who sued the National Property Fund Limited (NPFL)  after being required to surrender their policies and accept reduced repayments under a revised payment scheme. Although the plaintiffs later signed settlement agreements and received payments, they allege that these agreements were imposed under pressure and without genuine consent. NPFL argued that the settlements barred any legal action, but the Court held that such agreements may be challenged if obtained through coercion. Consequently, the defendant’s preliminary objection was rejected and the case will proceed on its merits. Lex examines the issues arising from this case.

* In simple terms, what was the main legal issue the Court had to decide in this case?

The Plaintiffs were required by the National Property Fund Limited (NPFL) to surrender their Super Cash Back Gold (SCBG) policies, in consideration for which they were to be paid specific sums of money on specified dates. The Plaintiffs were duly paid for the periods ending 30 June 2015 and 30 June 2016. In January 2017, the Defendant issued the Plaintiffs with written documents entitled Repayment Certificates, which clearly set out the respective amounts payable and the scheduled payment dates from 30 June 2017 to 30 June 2020.

Subsequently, NPFL issued a communiqué requiring the Plaintiffs to register anew and to accept payments lower than those contractually due. According to the Plaintiffs, the issuance of this communiqué exerted pressure on them and placed them before a fait accompli, in that failure to register by 31 August 2017 would result in them receiving no further payments of the sums owed.

Put simply, the central issue is whether the agreement signed in these circumstances was lawful and binding as a matter of contractual obligation.

* What does the law mean by a “transaction,” and why are settlement agreements normally treated as final and binding?

A settlement agreement, accord transactionnel or transaction, is a contract by which parties resolve an existing dispute or prevent a future one through mutual concessions. As defined by the Civil Code, it requires the existence of an actual or potential conflict and reciprocal sacrifices by the parties. Once concluded — typically in writing — a transaction has binding legal force, equivalent to a final resolution, and is intended to avoid litigation and provide legal certainty.

* What is meant by “violence” in contract law, and how does it differ from physical force?

The use of violence or threats in the context of contractual obligations undermines the requirement of free and voluntary consent. An agreement obtained through force or intimidation is therefore legally defective: in cases of direct physical coercion, the contract is void, while in other cases of pressure or intimidation it is voidable and may be set aside at the request of the affected party.

A void contract has no legal effect from the outset and is treated as though it never existed, making it unenforceable by either party. By contrast, a voidable contract is initially valid but may be annulled at the option of the party whose consent was improperly obtained.

* In practice, what kind of pressure or conduct might amount to “violence” sufficient to invalidate a settlement agreement?

In legal terms, “violence” sufficient to invalidate a settlement agreement generally falls under the doctrine of duress — either physical duress or severe, unlawful coercion that overcomes a person’s free will. Such conduct renders a contract void or voidable because the consent given was not truly voluntary.

Duress provides a legal basis for a party to be released from a contract when they have been forced or coerced into agreeing. If it can be established that such coercion occurred, the contract cannot be considered a valid and enforceable agreement.

* Does this judgment mean that all settlement agreementscan now be challenged more easily?

The primary purpose of a settlement agreement is to resolve a dispute between parties outside of court, providing certainty, speed, and cost savings. Typically, this involves agreed terms — often including compensation — in exchange for waiving future legal claims, ensuring a “clean break.” Settlement agreements serve as formal, binding contracts that end conflict, avoid protracted litigation, and protect sensitive information, and are commonly used in cases of redundancies, grievances, or mutual separations.

Challenging a settlement agreement requires showing that the contract is fundamentally flawed, as courts generally uphold their finality. While settlement agreements are legally binding once signed, they can be contested if there is clear evidence of fraud, duress, or other factors that invalidate consent.

* What will the plaintiffs now need to prove for the settlement agreements to be declared null and void?

For a settlement agreement to be declared null and void, the party seeking to set it aside must generally show that the contract is fatally flawed because of serious misconduct, such as fraud, duress, or a fundamental defect in consent.

Courts strongly favor the finality of settlement agreements, so the burden of proof is high: the claimant must produce clear evidence that the agreement was entered into under circumstances that legally undermine free consent (e.g., coercion or misrepresentation).

* From a legal perspective, how risky is it for institutions to impose tight deadlines or “take-it-or-leave-it” payment conditions?

Imposing tight deadlines or “take‑it‑or‑leave‑it” (adhesion) payment conditions carries significant legal risk for institutions, as such practices are frequently scrutinized for fairness and unconscionability.

Courts will examine whether terms create a significant imbalance in rights, exploit a weaker party, or are oppressive, and may refuse to enforce or invalidate such provisions if they are deemed unfair or contrary to public policy.

* How does this decision protect individuals who may be in a weaker bargaining position?

The decision is a significant breakthrough in how contracts leading to agreements should be interpreted. As the judgment states: “In view of the law governing a ‘transaction,’ it is therefore well settled that, although, in principle, a ‘transaction’ has autorité de la chose jugée, it can still be challenged by a party to the ‘transaction’ on the basis that there has been violence in the process.”

* Could this ruling have wider implications for disputes involving banks, insurers, or public institutions, which at times try to force citizens into submission through the threatening prospect of protracted, costly litigation or aggressive recovery measures? Does the new ability of the Revenue Tribunal to award costs against the MRA signal a turning point for the protection of the ordinary citizen?

Settlement agreements with banks, insurers, or public institutions are generally legally binding contracts intended to provide finality by requiring parties to make a full and final settlement and waive future claims. Once validly entered into, they are enforceable and serve to avoid further litigation.

However, such agreements are not immune to challenge. If a settlement was entered into under duress, misrepresentation, fraud, or similar vitiating factors, it may be set aside or re‑opened. Courts will scrutinise whether the party’s consent was truly voluntary: where it was caused by coercion, fraud, or misrepresentation, the agreement may be voidable at the option of the aggrieved party and subject to rescission or annulment.

* If the plaintiffs ultimately succeed, what kinds of remedies or outcomes could the Court order?

If the plaintiffs ultimately succeed, the Court could order remedies such as full payment of the amounts their policies generated, together with interest, to place them in the position they would have been in had the settlement not been imposed under duress.

Mauritius Times ePaper Friday 23 January 2026