An analysis of force majeure in the context of Mauritian banking law

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Siv Potayya
Wortels Lexus, Port Louis, Mauritius
emailus@wortelslexus.com

The provisions under Article 1148 of the Mauritian Civil Code are derived from French law. It defines ‘la force majeure’ as an external factor that prevents the debtor from fulfilling an obligation – that which he was obliged to give or do, or was forbidden from doing. The Civil Code deals with the ‘obligations to give’ under the provisions of Articles 1136 et seq, and the ‘obligations to do or not to do’ under Articles 1142 et seq. Under Articles 1905 et seq the Civil Code deals with ‘the loan reimbursable with interest’, under which the banker or lender, who is called the creditor, and the customer or borrower, who is called the debtor, both fall.

Be that as it may, whether we fall within the ambit of the provisions of Articles 1136, 1142 or 1905 of the Civil Code, there is always, on the one hand, the creditor and on the other, the debtor.

Force majeure applies in cases where there is an obligation to give something: an example would be a case where the item that the creditor were to deliver to the debtor had been destroyed in a fire. For a case where there is an obligation to do something, an example would be a case in which a municipal council had agreed to grant a request and ultimately does not succeed.

Could we speak of force majeure in the case of non-repayment of bank loans? Generally speaking, if the contract includes a modularity clause – that is, one that grants the possibility of modifying monthly payments – it will be possible for the debtor to renegotiate the loan agreement. On the contrary, the terms of the contract would be enforced.  

Where the debtor cannot reimburse the creditor, the French Court of Cassation has ruled that the debtor of a contractual obligation of an unexecuted sum of money cannot be exempted from this obligation by invoking a cause of force majeure. The same principle would apply in the case of suretyship (personal guarantee) where the guarantor would not be able to invoke force majeure. The court goes further in setting down that the mere existence of a pandemic or a virus is not sufficient to qualify as a case of force majeure.

These modularity clauses are not common in the Mauritian bank loan contracts, and the banker is under no obligation to approve a client’s request. Fixed and floating security documents do not include it and they are executoire, that is, they can be enforced without a judgment of a court of law. A fixed or floating charge instrument always proves detrimental to the debtor or to the guarantor, thus causing the sale of his/her belongings at the Master’s Bar, unless there is solid ground for an incidental application to challenge its enforceability.

What about the provisions under Article 2150-1 of the Civil Code, which authorise the banker to debit any credit balance of a client and to credit any account with a debit balance without having to inform him beforehand? This also applies to a person who has guaranteed payment of a loan in the event of default by the principal debtor.

Should we be making changes to our laws? The Government is presently proposing before the Mauritius Parliament the Covid-19 (Miscellaneous Provisions) Bill (No I of 2020) with the objective of amending a number of enactments to cater for the impact of Covid-19, and for matters connected, consequential or related thereto. The proposal is to amend about 57 enactments.

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