A covenant is a formal written agreement between two or more people or groups of people which is recognized IN law. In is used before the name of the field, Law. Other examples: I have a degree in English. My friend works in Nuclear Medicine. A covenant is a formal written agreement between two or more people or groups of people which is recognized BY law. This is the passive voice. The active voice would be: The law recognizes a convenant as a formal written agreement between two or more people or groups of people.

Thanks, Peter for the answer.

should be by, so: is recognized by law