Metalclad

Ventana Environmental Organizational Partnership, L.P. (VEOP), North American Environmental Fund, L.P. (NAEF), and Ventana Global Limited, a holding company allegedly controlling both entities (collectively Ventana) appeal from an order denying their petition to compel arbitration. Ventana contends the trial court erred in refusing to compel Metalclad Corporation to arbitrate under a written contract with Ventana’s subsidiary. Ventana is not a signatory to that document, but asserts the doctrine of equitable estoppel precludes Metalclad from raising Ventana’s nonsignatory status to oppose arbitration. We agree and therefore reverse, with directions to grant the petition to compel arbitration and stay this litigation.

I

Facts and Procedural Background

Metalclad is a publicly held corporation, with its principal place of business in Newport Beach, California. In 1994, Metalclad organized under Mexican law a wholly owned subsidiary named Ecosistemas Nacionales, S.A. de C.V. (Econsa). Econsa functioned as a holding company for the waste disposal and treatment operations Metalclad planned throughout Mexico. As part of its acquisition of a Mexican industrial waste treatment…