What is the legal ruling concerning reconciliation when either party knows they are lying or wrong?

Primary text

If the claimant knows his claim is false, whatever he takes is illicit gain (akl mal bil-batil) achieved through falsehood, oppression, and a void claim, making it unlawful. If the claimant is truthful and the defendant knows the right is established but denies it to reduce the claim or appease the claimant, this is considered an infringement upon the right and an illicit acquisition of wealth, rendering the reconciliation void and unlawful in the internal reality. The formal ruling remains validity based on appearances, as the external reality of a Muslim is presumed sound.