A Kilmore Quay fishing vessel and a Naval service ship were engaged in a confrontation about off the Co Wexford port this afternoon.
The Navy said the vessel was detained for fishing for scallops without a licence.
The owners of the fishing boat said they had been catching scallops as a by-catch of other fishing and understood they had been allowed to do that and had never been challenged about it before.
The owners said they have two boxes of scallops on board and they say this is 'another new tactic against fishermen'.
Two Naval officers from the LÉ Emer boarded the fishing vessel, the Emer Jane, earlier this afternoon and ordered it to proceed to Dunmore East in Co Waterford.
The skipper of the vessel reportedly refused and said he would go to his home port of Kilmore Quay and the Navy could arrest him there if they wanted to.
The owners of the fishing vessel claimed that the LÉ Emer threatened to open fire on them.
But a spokesman for the Navy said it 'strongly denied even the suggestion that the Navy threatened to open fire'.
The fishing vessel is continuing to sail towards Kilmore Quay, but is not being followed by the Navy, which has also taken its two officers off the boat.
A Navy spokesman said they had gathered information on the alleged offence and would be forwarding this to the gardaí and the fisheries authorities to have the incident followed up.