Emergency Contact Exercising the right of withdrawal Home Latest updates Publications Exercising the right of withdrawal 17 Aug 2023 View PDF Sign up for alerts The right of withdrawal is one of the remedies available to shipowners who have time chartered their vessel, when their charterer fails to pay hire promptly and in full. The right can have significant consequences upon the shipowner unless it is carefully considered beforehand and exercised correctly. Therefore, this guide provides a summary of the way such right appears in practice, how it is exercised and what consequences arise from its application for both the shipowner and charterer. Payment of hire Under a time charter, the charterer has an obligation to pay the agreed hire in advance, or before the due date agreed under the charter. This obligation is an absolute one, meaning that any default suffices (even where the amount is only late or the remaining outstanding amount is minimal), regardless of whether non-payment is intentional or an oversight/error. Charterers’ obligation to pay hire punctually constitutes an innominate term (‘ Spar Shipping ’ [1] )  and not a condition (as it was previously held in “ The Astra ” [2] ). This means that breach of such duty will not automatically provide shipowners with the right to terminate the charter and claim damages. On the contrary, shipowners’ termination right following a breach of the hire provisions will depend on whether the consequences of this breach were so serious as to go to the root of the contract, depriving shipowners of substantially the whole benefit of the charterparty. The Court of Appeal have found that the latter would occur when there is a persistent pattern of late or under payment of hire by the charterer which could be treated as renunciation of the charter. The shipowner’s right of withdrawal and the anti-technicality clause Late, or partial payment of hire does not alone give rise to the shipowner’s right of withdrawal, unless