While arbitrators are not required to provide a reasoned award, courts may ask arbitrators to clarify an "indefinite, incomplete, or ambiguous" award in a way sufficient to allow effective judicial review of the award, according to the Second Circuit Court of Appeals.

In Rich v. Spartis, Nos. 06-1723-CV (L), 06-1814-CV (XAP), 2008 WL 343330 (2d Cir. Feb. 8, 2008), Rich obtained financial investment services from Spartis. A dispute later arose between the parties, and the parties proceeded to arbitration in accordance with their NASD agreement.

During the arbitration proceedings, a class action suit was settled regarding investments in WorldCom securities. This settlement was enforced by a judgment enjoining any class members from pursuing related claims. Some of Rich's claims at arbitration arose from Rich's purchase of WorldCom securities, and the arbitrators expressed confusion as to whether the settlement of the class action barred some of Rich's claims.

Despite such confusion, the arbitrators issued an award in Rich's favor, but failed to designate whether all, some, or none of the award was for compensation related to WorldCom securities. Upon Rich's motion to confirm, the district court asked the arbitrators to clarify their award, but they refused. The district court then vacated the award, holding that the award was solely for the prohibited damages related to WorldCom securities and was clearly made in excess of the arbitrators' authority.

While the Court noted that arbitrators are not required to provide reasons for any particular award, the Court found that the "unique situation" presented here required clarification to determine whether the award should be confirmed or vacated. The Court emphasized that the order for clarification did not require that the arbitrators state the reasons for the decision, but only specify whether the WorldCom losses were represented in all, part, or none of the award. To the Court, it was proper to ask for clarification of such an "indefinite, incomplete, or ambiguous award… so that the court will know exactly what it is being asked to enforce."