As I understand, there were 2 main issues (1) sovereignty over the Chagos islands (2) the int'l human rights issue because of the forced exile of the natives.

The natives are not allowed to return to the archipelago because of the US military base in Diego Garcia,

Mauritius argued that it leased the land to the UK and the UK sub-leased it to the US. On the other hand, UK said the archipelago is a British territory and it has sovereignty over the islands.

can £4m compensate for the human rights violations on that scale ?