In this paper, we propose a sea current relative navigation method using an interacting multiple model (IMM) filter with adaptive fading technique that can compensate an inaccurate sea current dynamics model. Due to the marine environment, the underwater vehicles largely depend on inertial navigation. Unfortunately, since its performance deteriorates with time, it is usually aided by another sensor. An electromagnetic-log (EM-log) and a Doppler velocity log (DVL), which are mainly used in marine navigation, provide relative velocity measurements to the sea currents, and hence require an accurate sea current dynamics model to fully utilise them. However, it is difficult to reflect the actual sea current changes with just a single fixed model, resulting in degraded overall navigation performance. Therefore, this paper proposes an IMM filter that can use multiple sea current dynamics models and has sub-filters designed with adaptive fading extended Kalman filter (AFEKF) to compensate for the mismodelling of sea current dynamics. The method is verified by simulation and shows a performance improvement comparable to the optimal filter.