The humble sandeel is set to take centre stage in the first courtroom trade battle between the UK and EU since Brexit.

The UK has banned European vessels from catching the silvery fish species in its North Sea waters to protect marine wildlife that depend on it for food.

But the EU is challenging the move, arguing it discriminates against Danish vessels that fish sandeel commercially, breaching the post-Brexit trade deal.

The dispute is now heading for a three-day trade tribunal hearing, after formal talks to resolve the wrangle failed.

Without a last-minute compromise, it will mark the first time the two sides have gone to arbitration under the 2021 trade agreement agreed by Boris Johnson.

The case is due to be heard from Tuesday next week at the Permanent Court of Arbitration, a dispute resolution body based in the Hague, by a panel of three mutually-agreed international trade judges.

They could uphold the UK’s position – or order the UK to change or drop its ban, in which case Brussels could ultimately retaliate with tariffs on British exports if ministers refused to comply.

Under the trade deal, a final ruling must be delivered by the end of April, although it could be issued earlier. There is no right to appeal.

It comes as the UK prepares for tricky negotiations with the EU over new catch limits from June next year, when current arrangements under the trade deal run out.

Sir Keir Starmer is also hoping to persuade EU leaders to strike new deals in areas such as security and food trade, as part of a wider “reset” in relations with the UK.

Sandeel, a group of small eel-like fish species, is a jointly managed fish stock under the trade deal. It is not caught for culinary reasons and is unlikely to be found on restaurant menus in European capitals.

But it is a favourite food of other fish species like cod and haddock, as well as threatened seabirds such as puffins and kittiwakes.

The UK has effectively stopped its own vessels from fishing the species since 2021 through its licensing regime, on the grounds it is required to prevent overfishing and protect the North Sea ecosystem.

Rishi Sunak’s Conservative government then banned all vessels from catching the species in English waters of the sea in March last year, with a similar ban in Scottish waters brought in by ministers in the SNP-led Scottish government.

It won the UK plaudits from conservation groups, which had long campaigned for an outright ban, and Sir Keir’s Labour government has kept the ban in place since taking power in July.

But it has outraged Danish fishermen, who sell sandeel to animal feed and fish oil producers and under the post-Brexit trade deal hold the right to fish the overwhelming majority of the EU’s share of the species in UK waters.

The dispute centres on whether the UK’s right to restrict trawlers for conservation reasons unnecessarily restricts agreed EU fishing rights.

In its submissions to the court, the EU has argued the geographical scope of the ban is not justified by the scientific modelling on stock levels, or the “economic and social impacts” on Danish fishing communities.

In a response published by the court, the UK has defended the scientific advice behind the ban, adding that the EU has failed to point out “any superior model” available at the time.

It added that the UK was within its rights to bring in the ban, highlighting that the trade agreement itself commits both sides to taking account of the impact of fishing on marine diversity.

The UK decision to continue the ban has been backed by an unlikely coalition stretching across three political parties, conservation groups and committed Brexiteers.

The renewable energy industry has also taken an interest, arguing the ban helps achieve the necessary level of seabird “resilience” to allow more wind farms to be built whilst still hitting conservation targets.

The UK has previously estimated sandeel caught in its waters is worth around £45m a year, a tiny industry in the context of the wider trade relationship.

But the dispute will be watched closely for how the judges balance the UK’s right to take conservation measures with economic rights.