- The first Arbitration Ruling brought in accordance with the EU-UK Trade and Cooperation Agreement concerns the UK’s prohibition on EU vessels fishing for sandeel in UK waters.
- The ruling underscores the need for careful adherence to proportionality and procedural obligations in post-Brexit regulatory decisions.
- Its outcome may set a precedent for how future environmental measures impacting shared resources must be balanced with trade commitments.
On 28 April 2025, the Permanent Court of Arbitration (PCA) issued its first ruling in dispute raised under the framework of the Trade and Cooperation Agreement between the European Union (EU), the European Atomic Energy Community and the United Kingdom (UK) of Great Britain and Northern Ireland concluded on 30 December 2020.
The grounds for the dispute addressed the UK’s prohibition on EU vessels fishing for sandeel in the North Sea UK waters; the arguments presented in UK-Sandeel (The European Union v The United Kingdom of Great Britain and Northern Ireland) and the outcome hold value in light of recent post-Brexit negotiations.
Overview and context
The EU-UK Trade and Cooperation Agreement (TCA) is cited by the UK government to be the most substantial zero-tariff, zero-quota free trade agreement ever achieved on a global basis. The TCA extends beyond the parameters of other trade agreements through establishing a framework on issues such as judicial cooperation and law enforcement, fisheries and energy. The TCA has formally established a list of twenty arbitrators who are willing to serve as members of an arbitration tribunal.
The UK government made a decision in March 2024 for the UK to close the North Sea waters to sandeel fishing. Sandeel are a prey species thought to contribute to the better functioning of marine mammals, predator fish and seabirds; once caught, sandeel are processed into oil and fish meal. Therefore, the reason for this decision is cited by the UK government to be based on supporting the vulnerable seabird population and the wider marine environment. Fishery is seasonal and only permitted in the North Sea waters between 1 April and 31 July. Sandeel is a shared stock, meaning that the EU and the UK share an agreed quota per year.
On 16 April 2024, the EU requested a consultation with the UK on the basis of Part 6 of the TCA, regarding the UK’s prohibition of fishing for sandeel in the English North Sea waters and all Scottish waters, and cited that the full and permanent closure was not compatible with the UK’s obligations under the TCA. A resolution was not concluded, and on 25 October 2024, in accordance with Article 739 of the TCA, the EU requested that the PCA serve as registry.
Pursuant to Article 740 of the TCA, an arbitration tribunal was established on 18 November 2024. In response, on 9 January 2025, the UK filed a response that the prohibition on EU vessels fishing for sandeel did not breach the UK’s obligations in the TCA. The EU position was that there was insufficient evidence to support the UK’s claim that the total prohibition would achieve the environmental impact, namely, a 7% increase in the biomass of seabirds over a 10-year period. Moreover, they presented that the UK did not consider the socio-economic impact on the EU fishing industry.
The EU suggested that the UK did not fulfil its obligations in the TCA during the adjustment period to 26 June 2026 and should have applied a more proportionate measure. The UK position highlighted that certain seabird populations, such as the kittiwake and Atlantic puffin, were vulnerable or endangered and sensitive to changes in the sandeel population. The UK stated that the qualified rights of EU vessels derived from the TCA were “necessarily” to be given less weight when balanced against the UK’s exercised the right of the UK to exercise its sovereign powers.
Ruling
The Final Ruling issued by the arbitration panel delineated that the UK’s prohibition on EU vessels fishing for sandeel in the English waters of the North Sea was not proportional and inconsistent with its obligations under the TCA. The Ruling dismissed the claim that the prohibition of fishing for sandeel in the waters of the United Kingdom was not based on the best available scientific evidence; and dismissed the claim addressing the prohibition on fishing for sandeel in Scottish waters of North Sea; and the claim that there was a failure to have regard to the principle of applying a non-discriminatory measure. The UK must inform the EU of how it intends to bring itself into compliance with the TCA by 28 May 2025.
Summary
The ruling that the UK’s prohibition on EU vessels fishing for sandeel in the UK North Sea waters was inconsistent with its obligations to apply a proportional approach during the adjustment period was welcomed by the European Commission. Not all of the EU’s claims were upheld, and in a response to the arbitration tribunal’s finding, the UK government published that, “The ruling does not mean the UK is legally obliged to reverse the closure of English waters.” The UK government has indicated that it will undertake a process to bring the UK into full compliance.
The UK’s response has highlighted that the Tribunal found a procedural error in the decision to close English waters: but has indicated that the UK does not necessarily have to reverse the closure of English waters during the compliance process.
The efficiency of the procedure and the time frame of the proceedings is notable, with the request to convene an arbitration tribunal made on 25 October 2024, and the ruling issued on 28 April 2025.
The full report and press release are available to read from: https://pca-cpa.org/en/cases/334/.
