The EU and UK face their first post-Brexit legal showdown as the bloc challenges Britain's North Sea sandeel fishing ban – a minor environmental case with major political implications.

In a significant moment for post-Brexit relations, lawyers for the European Union have taken Britain to an arbitration tribunal over a ban on sandeel fishing in the North Sea.

The case marks the first legal dispute between the EU and the UK since Brexit and could influence the Labour government's efforts to rebuild ties with the bloc.

The EU's legal representative, Anthony Dawes, addressed a three-member panel at the Permanent Court of Arbitration in The Hague on Tuesday.

"We are here today because the UK's prohibition of all sandeel fishing in its North Sea waters nullifies rights conferred on the European Union," Dawes stated.

The hearing, set to last three days, will delve into whether Britain's fishing ban violates the Trade and Cooperation Agreement (TCA) signed by both sides.

The arbitration panel, composed of legal experts from France, New Zealand, and South Africa, is expected to deliver a final ruling by late April.

While the financial stakes are modest – Britain estimates a worst-case revenue loss of upto €54 million for non-UK fishing vessels – the political implications loom larger.

The tribunal has two options: uphold the ban or determine it breaches the TCA.

If the latter, the EU could take retaliatory measures if the ban is not lifted, putting British Prime Minister Keir Starmer’s Labour government in a challenging spot.

Britain has defended its sandeel ban, citing scientific research that highlights the species’ critical role in marine ecosystems.

Sandeels serve as a vital food source for larger fish, marine mammals, and seabirds like puffins.

While UK fishing fleets don’t target sandeels, Danish vessels catch them primarily for animal feed and oil production.

The EU, however, argues that the ban is discriminatory, excessive, and unsupported by the best available science.

According to the bloc, it unfairly restricts EU fishing vessels' access to UK waters guaranteed under the TCA.

As both sides make their case, the dispute underscores a delicate balance of post-Brexit relations.

As environmentalists and Brexiteers alike might oppose any concessions, the legal spat could make it harder for the UK to smooth relations with the EU.

Starmer is scheduled to meet EU leaders next Monday to discuss enhanced defence cooperation in response to Russia's aggression, as well as NATO's defence spending goals.

But beyond defence, Britain is also eyeing a veterinary agreement with the EU to streamline agricultural and food trade, signalling a desire for broader cooperation.