Preheat broiler and set oven rack about 6 in from top of oven.
On baking tray, place red peppers and broil, turning occasionally, until blackened and blistered on all sides, about 5 to 8 minutes total. Remove from oven and set aside until cool enough to handle. Peel off skin, slice pepper open, remove seeds and roughly chop. Place in small bowl and set aside. Peppers may be prepared up to 2 days ahead and refrigerated in airtight container.
In large skillet or large saucepan, heat oil and fennel seeds together over medium heat. Once fennel seeds are fragrant, about 1 minute, add onion and garlic and cook, stirring often, until onion is translucent, about 4 minutes. Add canned tomatoes along with their juices, tomato paste, salt, oregano, coconut sugar (if using), and crushed red pepper flakes. Cook, stirring often, allowing tomatoes to soften and break down a bit, about 5 minutes. Stir in water and reserved chopped red peppers. While stirring, let mixture come to a simmer. At this point, you can adjust the consistency of your sauce. If you like your sauce to have some texture and be a bit chunky, leave as is. Alternatively, puree sauce in blender for a smooth consistency and return back to skillet, bringing to a simmer over medium heat.
Place halibut fillets in sauce, cover skillet with a lid, and reduce heat to medium-low. Cook fish until it is opaque and beginning to flake easily, about 12 to 15 minutes. Check often to make sure sauce is not reducing too much. If it does, simply add a bit more water.
To serve, divide tomato red pepper sauce and fish among shallow bowls. Garnish with chopped dill or parsley, if desired, and enjoy!
