In general terms, a suretyship is an agreement by which a person
(Guarantor) undertakes to perform an underlying obligation if the
principal debtor fails to do so. The principles and legal regime of
suretyship in Mauritius are inspired from French law and are to be
found under the Mauritian Civil Code.
Below are 5 things you should have in mind when thinking of
suretyships under Mauritian laws:
Nature of the
The suretyship is an accessory obligation and may only guarantee a
valid underlying obligation without which the suretyship cannot
exist. The suretyship is therefore an obligation to perform the
underlying obligation (in full or in part up to a contractually set
out limit) upon failure of the principal debtor.
Conditions of the
A suretyship may not be contracted for an amount in excess of that
owed by the principal debtor or under more onerous conditions.
However a suretyship which does not meet these conditions is not
void; it is only reducible to the measure of the underlying
Enforcement and recourse
against the initial debtor
If and when default of the initial debtor arises, the creditor may
exercise his right to be paid under the suretyship subject to the
rights of the Guarantor to claim back against the principal
Rights of the
Upon default under the underlying obligation, the beneficiary can
call on the Guarantor to perform its obligations under the
suretyship after having exhausted its remedies against the
principal debtor. The principle is known under Mauritian law as the
"bénéfice de discussion". The
"bénéfice de discussion" can be expressly
waived. Where there are several Guarantors jointly liable for the
same underlying obligation, the Guarantor may require the
beneficiary to divide its recourse amongst the various Guarantors,
this right known as ("bénéfice de
division"), can be expressly waived, as well.
A Guarantor who has performed the underlying obligation is entitled
to be subrogated to the beneficiary's right in respect of the
debt. The Guarantor can thus step into the shoes of the beneficiary
and enforce the beneficiary's rights for its own benefit.
Suretyships are subject to the Mauritian Civil Code but can, in
some specific cases, qualify as commercial agreements and be
subject to the certain provisions of the Mauritian Commercial Code.
The Privy Council's judgement in Société Alleck
& Cie1 perfectly illustrates the commercial
qualification of a suretyship with 2 conditions based on French
judicial precedent. The first criterion is known as
"commercialité par accessoire" which will apply
when the surety is granted by any person for the only purposes of
his business. Secondly, the agreement may be subject to the
Commercial Code if the grantor has a patrimonial interest over the
fulfilment of underlying commercial obligation guaranteed by the
Where the grantor is a "commerçant" (i.e. a trader
which under Mauritian law means any person practicing a commercial
activity on a regular basis), there is no presumption under
Mauritian law resulting in the surety automatically being qualified
as a commercial arrangement and being governed by the Commercial
Code. The specific criteria mentioned above must be fulfilled for
the arrangement to be governed under the Commercial Code.
If the criteria are met, the Mauritian courts will depart from the
general provisions of Mauritian Civil Code and apply the provisions
of the Commercial Code. These relate mainly to the proof of the
suretyship. The Commercial Code offers more flexibility to parties
to prove a commercial contract with for instance the principle of
freedom of proof which derogates to the strict requirements of the
Civil Code on both form and substance.
1. Société Alleck & Co. Ltd v The
Indian Ocean International Bank 2007 PRV 87 / 2008 MR
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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