Consent Decree

A consent decree converts a private agreement into a court order. This is significant because a court order is enforceable through the court's own execution machinery — a settled party who defaults can be compelled to comply without the aggrieved party having to file and prove an entirely new case.

How a consent decree is obtained

Under Order XXIII Rule 3 of the Code of Civil Procedure, 1908, where parties to a pending suit reach a lawful agreement or compromise, the court may record the compromise and pass a decree in terms of the compromise. The resulting order is a consent decree.

The process:

1. The parties (or their lawyers) reach a settlement in terms precise enough to be recorded as a court order
2. A joint application is filed before the court where the matter is pending
3. The court satisfies itself that the compromise is lawful and that the parties genuinely consent to it
4. The court passes a decree in terms of the compromise
5. The decree is sealed and entered in the court record

Consent decree and private settlement

A consent decree is a court order based on a lawful compromise recorded by the court. A private settlement does not automatically have the same procedural status; its effect depends on how it is documented and adopted under the applicable law.

Consent decree in arbitration

In arbitration, if parties settle during the proceedings, the tribunal can pass an award on agreed terms under Section 30 of the Arbitration and Conciliation Act, 1996. This consent award has the same status as any other arbitral award — enforceable as a court decree, and challengeable only on the same narrow grounds.