It is recognized in public international law that the very notion and rationale of full compensation implies that double recovery has to be avoided. Offset of benefits is also determined by considerations of equity which are inherently part of any damage calculation. In addition, offset of benefits is also recognized in international conventions and instruments on international commercial law. International tribunals have, however, for a long time recognized that the law does not require offsetting the benefit in all cases where a benefit is received. Already early jurisprudence points to causality as the decisive factor concerning the offset of benefits. Thus, any offsetting of benefits depends on causality in terms of an adequate and close connection between damage and benefit. Moreover, tribunals have rejected attempts to apply profits made by a non-regulated sector of the business to offset the damages awards. Thus, in case the benefits which occur and the damage experienced are located in two separate entities, an offset of benefits may not be considered. A comparative law perspective affirms that offset of benefits is a recognized principle of law of damages but that it is subject to certain prerequisites which are essentially based on considerations of causality and equity.
Journal of International Arbitration