Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas – Preview Page

1. Introduction 

Consent awards occupy a unique place within the framework of international arbitration. In a mechanism which is traditionally considered as adjudicatory,2 a consent award allows the parties to request that the arbitral tribunal record the terms of the settlement agreement in the form of an arbitration award3 allowing it to be recognized and enforced in the same way as a contested award under the New York Convention 1958.4 By this, the consent awards achieve both practical enforceability and procedural efficiency. On one hand, it enjoys legal certainty under the New York Convention and elevates itself from the mere contractual effects, on the other, promotes amicable settlement of disputes without undermining the legitimacy of the arbitral process.  

Despite their prevalence, however, questions persist regarding the limits of tribunal duties and discretion, especially in cases where the underlying settlement may raise concerns of illegality, coercion, or violation of public policy. The dispute could either arise out of an inherently illegal transaction, or the settlement itself could be a scheme to pursue a fraudulent or otherwise illegal goal,5 and is contrary to public policy.6 The inquiry into such allegations in the context of consent awards differs significantly from ordinary arbitral proceedings because the tribunal does not examine the merits of the dispute but merely records the parties’ settlement as an award. Unlike in adjudicatory proceedings, where allegations of illegality can be raised and examined, consent awards rely on party representations, raising concerns about the potential misuse of the arbitral process to launder or legitimize corrupt agreements.