I'm not against gifts of inter-Alliance medals, but participation (in the giving of, and receipt of) medals should be on an 'opt-in, case-by-case basis', because it costs Prestige, which carries real-world monetary value (or cost). Players must never be coerced into to parting with their Prestige.
Every reasonable attempt should be made to avoid extortion, involving anything of real-world value.
If it's evident that a settlement was made, involving Prestige, then it's possible that someone was pushed into a reluctant choice of paying 'consequential damages'. If those damages have tangible monetary value, then we're in very uncomfortable territory.
This game has no 'give Prestige to player X' functionality, precisely to avoid a legal minefield. Let's not test the boundaries of this principle.
You cannot use the "free prestige" argument here.
(which argues that people receive free prestige every day, therefore it costs nothing to give Prestige, as medals). If you 'paid out' your 'free' Prestige on a compensation agreement, then you don't receive the benefit of that Prestige, and to receive that benefit you'd need to replace it, at a monetary cost.