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Air Mauritius has refused my compensation claim! What next?

Our flight to Mauritius with Air Mauritius was delayed by almost 4 hours due to a technical problem (a warning light had to have the bulb replaced)
On our return home I sent in the standard letter requesting compensation as per the new guidelines. (as well as asking for a refund on a different flight with air mauritius a few weeks later paying for extra legroom which we didnt get)
Today Air Mauritius' response was that they are unable to meet my request for compensation due to the fact the distruption was caused by extraordinary technical problems.
Should I just quit or try pursue further? (If so how and what are my rights?)
They have offered to re-emburse my extra legroom fee ('as a gesture of goodwill') but have sent a release and indemnity form for me to sign in connection to the delayed flight which was on a different date.
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