Question: Is it valid and permissible for the two disputants to mutually agree between themselves to revoke a judgment that has been issued concerning their dispute, and then for the dispute and quarrel to start anew?
Answer – and success is from Allah – is that this is neither permissible nor valid, and that both of them must accept the judgment and be satisfied with it; this is due to His saying, Exalted is He: “The only statement of the [true] believers when they are called to Allah and His Messenger to judge between them is that they say, ‘We hear and we obey.” [al-Nūr:51]. And the judgment of a judge is not validly revoked except by the judgment of another judge, under conditions that are mentioned in the books of fiqh.
However, it is permissible for the two disputants, after the judgment – or for one of them – to relinquish what he is entitled to under the judgment and to pardon his opponent in that regard. As for revoking the judgment without that, it is neither valid nor permissible.
Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2