Equitable Estoppel finds its genesis in the contractual principle of equity with regard to the parties of the contract, and the legal principle of estoppel. Equitable Estoppel refers to precluding a party that has knowingly accepted a contract with an arbitration clause or derived benefits from that contract, from avoiding its obligation to arbitrate. 

Equitable Estoppel has developed with two distinct principles forming its legs. The first allows non-signatories unwilling to arbitrate, but having willingly accepted direct benefits of a contract with an arbitration clause, to be compelled to arbitrate by one or more signatories. The second leg, on the other hand, allows non-signatories to compel unwilling signatories to arbitrate when the dispute at hand is either inseparable from the contract or if there exists a proximate enough relationship between the parties.

As under the first principle of Equitable Estoppel, a non-signatory deriving benefits from the contract, institutes civil action in relation to that very contract. The logical inference from this civil action is that the non-signatory, objectively, manifests the intention to be bound by the obligations arising out of the contract. Thus, the signatory can compel the unwilling non-signatory to arbitrate and preclude him from avoiding arbitration. In other words, if a non signatory brought a legal action based on the agreement, the signatory might use equitable estoppel to force the non signatory to submit to arbitration.

In the second principle, signatory and non-signatory parties are related, but not due to the presence of a direct & binding contract between them. Here, too, in the case that the signatory sues the non-signatory in relation to an issue so intertwined with the contract that it cannot be separated, the non-signatory shall have the capacity to compel the unwilling signatory to arbitrate.