Police were called to a fight in Lerwick’s Commercial Street in the early hours of Tuesday.
The incident, involving four men, happened around 12.30am and was reported to police by a member of the public.
Officers went to the scene and two men were arrested. One has been charged with a hate crime and is in custody, with a report going to the procurator fiscal.
The second man was charged with assault and is also the subject of a report to the procurator fiscal.