
An arbitration tribunal is considering a case brought by the EU against the UK under the UK-EU Trade and Cooperation Agreement (TCA), in force since January 2021.
This is the first time a dispute between the UK and the EU under the TCA has reached the arbitration stage.
The dispute was launched by the EU in April 2024 in relation to the decisions to close the sandeel fishery for all fishing vessels in the English waters of the North Sea and in all Scottish waters. The EU argues this breaches the TCA fisheries provisions.
This Insight sets out the background to the dispute and how the TCA arbitration process works.
What is the dispute about?
Sandeels are small, eel-like fish that can grow up to around 30 cm long and travel in shoals. The Royal Society for the Protection of Birds (RSPB) explains that sandeels are the main prey of many seabird species in the breeding season, and they are therefore important in sustaining their populations in the UK and wider North Atlantic. It argues that “the evidence is compelling” that declining sandeel populations reduce the breeding success of seabird species such as puffins, arctic terns and kittiwakes.
Following consultation, the UK and Scottish Governments announced the closure of fishing for sandeels in Scottish and English waters in March 2024. A key aim of the closures is to increase the availability of sandeels and thereby increase the resilience of marine species that rely on them. EU vessels, primarily from Denmark, had nearly 97% of the available quota allocation for sandeels in UK waters before the closure, and were therefore most affected. Sandeels are fished primarily for fish and animal feed rather than for human consumption.
The EU’s submission to the arbitration tribunal (PDF) explains its position on the fishery closure in detail. It says that the closure does not comply with the provisions of the TCA related to the joint management and sharing of fish stocks. It argues that the closure is not proportionate, is discriminatory against EU vessels, and is not based on the best available scientific advice. The UK submission (PDF) disagrees with these claims, referring to the scientific advice and conservation considerations behind closing the fisheries and its right to regulate to protect the environment under the TCA.
How does the dispute process work?
The dispute was launched by the EU under a procedure set out in the TCA.
Under these provisions, if one party (the UK or the EU) believes that the other party is in breach of the agreement, it can request consultations between the two parties in order to resolve the matter “in good faith” and with the aim of reaching “a mutually agreed solution”. These consultations should end within 30 days of the request, or earlier if deemed urgent, unless the two parties agree to continue them.
If the UK and EU do not reach a mutually agreed solution through consultations, the complaining party may request the establishment of an arbitration tribunal to rule on the matter. Members of the tribunal are selected from a list of potential panel members already agreed by the UK and EU as provided by the TCA.
The sandeel dispute is not the first time the dispute process has been used. The UK previously requested consultations under this procedure in 2022 after the EU delayed approving the UK’s participation in EU programmes (such as the Horizon Europe research framework), which was provided for by the TCA. However, the issue did not progress to the next stage of the dispute procedure and it was resolved when the UK and EU reached a new agreement on UK participation in 2023.
Arbitration in the sandeel dispute
The EU requested the establishment of an arbitration tribunal on 25 October 2024. The EU had previously requested consultations under the TCA dispute settlement mechanism on 16 April 2024. The arbitration panel was established on 19 November 2024.
The UK and EU have also agreed to use the services of the Permanent Court of Arbitration, the international dispute resolution body based in The Hague, to facilitate the process.
What happens following a ruling?
Where the tribunal finds that a party has breached a treaty obligation, the TCA states that it should take the necessary measures to comply with the ruling. It should set out how it will do this within 30 days.
If the party does not comply with the ruling, then the complaining party can request compensation or retaliate by suspending certain provisions of the agreement.
For certain sectors such as trade, aviation, road transport and fisheries (set out as headings within part two of the TCA), this can involve cross-retaliation. This means that if a party does not comply with a ruling under one heading, the other party can suspend provisions under another heading.
Any retaliation needs to be proportionate and the other party can appeal against it to the arbitration tribunal. There are a range of exceptions as to which provisions can be suspended, and the suspension should be lifted once compliance is achieved or a mutual solution is reached.
Expected timeline for the sandeels case
The arbitration tribunal hearing is expected to take place from 28 to 30 January 2025.
If either party wishes to make a supplementary submission, this needs to be submitted by 10 February.
The TCA also provides that the tribunal should issue an interim report within 100 days after it has been established. In this case that would be the end of February, although this can be delayed.
The two parties would then have 14 days in which they can request a review of aspects of the report.
If no review request is made, then the interim report becomes the final ruling of the tribunal.
Under the timelines set by the TCA, a final ruling would otherwise be expected within 130 days of the tribunal’s establishment. In this case that would be the end of March 2025, although this can be extended to up to 160 days.
Further reading
- House of Commons Library Insight, Governing the new UK-EU relationship and resolving disputes
- House of Commons Library briefing, The UK-EU Trade and Cooperation Agreement: governance and dispute settlement
- House of Commons Library briefing, UK-EU Trade and Cooperation Agreement: Fisheries
- Permanent Court of Arbitration, UK-Sandeel (The European Union v. the United Kingdom of Great Britain and Northern Ireland)
- RSPB, Policy Briefing: Sandeel fisheries in UK waters, June 2021
About the authors: Elena Ares is a Commons Library researcher specialising in fisheries and the marine environment. Stefano Fella is a Commons Library researcher specialising in the EU.
Photo by: Moorland Roamer via Adobe Stock