Zlatko Mileski, 33, was the first of 10 people arrested in Queanbeyan as part of the operation, which targeted the supply of the drug ice. It was a cross-border operation between ACT and NSW police.

Mileski has been remanded in Goulburn jail since September.

On Tuesday he applied for bail in Queanbeyan Local Court, where he appeared via audio visual link. He is facing 10 charges of supplying methamphetamine and two of possessing drugs.

Mileski's solicitor Michael Bartlett criticised the police handling of the undercover operation. He applied for Mileski's release on the grounds of a disintegrating police case against him.

He said there were legal issues with the information provided to the court and the case against Mileski "appeared to be fatally flawed".

Mr Bartlett said the drug supply charges related to the ACT. However, an undercover police officer had picked up Mileski and driven him from his home in Queanbeyan to Canberra and back to facilitate multiple drug deals.

"The drugs passed over the border because police brought them here," Mr Bartlett told the court.

"Police imported the drugs into NSW."

Police documents tendered in court show the police are relying on a "geographical nexus" to bring the charges against Mileski.

The Crimes Act 1900 NSW states the connection exists if the offence is committed wholly or partly in the state or the offence is committed wholly outside the state but the offence has an effect in the state.

Mr Bartlett said the supply charges related to the ACT, but Mileski was driven back and forth over the border each time by the undercover operative.

"It smacks of unlawful extradition," he said.

"The only connection with NSW is that he lives here," Mr Bartlett said of the charges.

He said there were "real issues" with how the interstate operations were undertaken. He questioned why Mileski wasn't arrested in the ACT, given that a co-offender was facing charges in the territory.

Mr Bartlett said that, if his defence worked, Mileski could face charges in the ACT, but that was not a problem for the NSW court to decide.

Magistrate Michael Antrum said the matters would "undoubtedly require careful review".

However, the magistrate said there was still strength in the charges as they stood. He refused bail with Mileski to face court again in February.