LITTLE ROCK — The Arkansas Supreme Court said Thursday that only licensed lawyers can represent their companies in arbitration proceedings.

LITTLE ROCK — The Arkansas Supreme Court said Thursday that only licensed lawyers can represent their companies in arbitration proceedings.

The decision reversed a ruling by Sebastian County Circuit Judge Stephen Tabor. The case involved a dispute over construction costs between TriBuilt Construction Group LLC of Fort Smith, and NISHA LLC, of Conway, and Centennial Bank.

TriBuilt, the general contractor, was hired by NISHA to build the Country Inn & Suites in Conway. Centennial provided NISHA with a loan for the project.

After the project was completed TriBuilt filed a lawsuit against NISHA and Centennial, arguing that they were not paid the $666,462 balance owed.

The circuit judge ordered arbitration. TriBuilt notified NISHA and Centennial that its president, Alan Harrison, would represent the company in the hearings.

NISHA and Centennial filed a motion arguing that Harrison could not represent his company because a corporate entity cannot represent itself in litigation and litigation-related matters through agents who are not licensed attorneys.

NISHA and Centennial asked for a stay in the arbitration hearings, and circuit judge denied the request, saying the issue had never been ruled on by the state Supreme Court. The judge said he didn’t agree that nonlawyer representation in an arbitration proceeding constituted the practice of law.

NISHA and Centennial appealed the decision to the state Supreme Court.

In the unanimous decision, Justice Robert L. Brown said the high court has never decided an issue such as this.

Citing previous rulings, Brown said the court has said “that arbitration is designed to be a ‘less expensive and more expeditious means of setting litigation,’ and to ‘relieve docket congestion.”

He also said the court has previously said that “arbitration hearings are not analogous to trial proceedings.”

“Those statements, though, do not decide the issue,” Brown said, adding that that in this case the justices were “influenced by the fact that this court has been resolute in strictly enforcing the ruling that a corporation through its nonlawyer officers cannot engage in the practice of law.”

He added that the high court is “further influenced by the fact that the arbitration proceedings bear significant indicia of legal proceedings, under the Uniform Arbitration Act, which has been adopted by this state.”

Brown said that “if a hearing is held during arbitration, the parties have the right to be heard, present evidence material to the controversy, and cross-examine witnesses appearing at the hearing.”

“Bearing in mind the role of an advocate in arbitration proceedings, as just described, we are hard pressed to say that services of a legal nature are not being provided on behalf of the party in arbitration; in this case, TriBuilt,” Brown said, noting a previous ruling by the high court.

“Accordingly, we reverse the decision of the circuit court on this point and hold that a nonlawyer’s representation of corporation in arbitration proceedings constitutes the unauthorized practice of law,” Brown said.