Immovable-associated equipment in the CTC MAC Protocol: interactions between international interest and local interests under Chilean law

Abstract

The Mining, Agriculture and Construction Protocol (MAC Protocol) of the Convention on International Interests in Mobile Equipment (Cape Town Convention or CTC), provides a major innovation in the CTC system by including the concept of ‘immovable-associated equipment’. Article VII of the MAC Protocol’s mandatory declaration regulates immovable-associated equipment and the interaction between the international law regime of the CTC and domestic law of potential State parties, such as Chile. This article addresses the interactions between the CTC’s international interest in MAC equipment and the local interest under Chilean law. Consequently, it explores which alternative provided by Article VII of the MAC Protocol’s declaration provides the best improvement for Chilean law in order to enhance creditor position and to promote asset-based financing in the case of immovable-associated equipment. For such purpose, the Chilean mortgage is considered as a relevant interest for the immovable-associated equipment and the CTC international interest is compared with the Chilean non-possessory pledge under a case-by-case analysis. The analysis focuses on the cases when MAC equipment is a movable good deemed as immovable by destination under Chilean law.