The Delhi High Court on Monday directed tech giant SAP India to immediately restore software and enterprise support services to Indo-Russian oil refining company Nayara Energy [Nayar Energy Limited v SAP India Private Limited & Anr]. .Justice Vikas Mahajan said that SAP’s abrupt suspension of services following the European Union’s (EU) sanctions on Nayara in July 2025 was, prima facie, in breach of the contractual agreement between the two companies. The Court ruled that at the interlocutory stage, SAP “cannot take advantage of these unproven EU sanctions to argue that the performance of contract has become impossible”. “There is no doubt that the contractual relationship between the parties is strictly governed by the domestic laws of the Republic of India. The agreements gives a conscious and unambiguous primacy to the Indian laws in the event of any conflict with foreign rules or regulations,” the Court stated. .Justice Mahajan said that maintaining Nayara’s critical software infrastructure is important given the “volatile geopolitical situation and the current oil crisis stemming from the USA/Israel war with Iran”. It said that even though SAP’s parent company is German, it is a global firm, and its support services operate on a worldwide basis. “It is highly improbable that a multinational technology conglomerate of SAP’s magnitude, having a vast network of offices, servers, and a customer base across the globe, is technologically or operationally incapacitated from routing its online support services through any of its non-EU regional hubs,” the Court said. The Court also noted that Nayara caters to nearly 8% of India’s energy needs and, therefore, an uninterrupted flow of technical support services to firm is “absolutely essential”. “Further, the direction sought to restore the support services is against defendant no. 1 (SAP India), and there cannot be a real or imminent prospect of prosecution when an Indian corporate entity is performing its contractual obligations under the direction of the Court,” the Bench underscored. .The High Court passed the order while allowing the interim relief application filed by Nayara. The dispute arose after Nayara Energy was included in the EU sanctions list on July 18, 2025. Six days later, SAP disabled Nayara’s access to its support portal, citing an “export issue” and subsequently informing the company that its business with the sanctioned entity was prohibited. Nayara approached the High Court claiming that the suspension violated its contractual rights. It relied on the agreements governing its SAP software and support services, which were governed by Indian law. SAP, on the other hand, argued that the support services were provided through its German parent, SAP SE, and that compliance with EU sanctions and German export-control laws made continued performance legally impossible..However, the Court rejected SAP’s defence.It noted that the agreements described the territory of the licences and support services as “worldwide” and did not stipulate that support had to be exclusively delivered from Germany. The Court held that SAP could not restrict its performance obligations to Germany and then claim that performance was impossible because of EU sanctions. The Court also rejected the argument that the suit had become infructuous because the last annual work order expired on December 31, 2025. It held that the work order was not the contract itself, but an internal purchase document issued pursuant to the binding contractual framework between the parties. Therefore, the Bench directed SAP to restore status quo ante as it existed before July 24, 2025 by immediately resuming all enterprise and software support services to Nayara. .Senior Advocates Rajiv Nayar and Dayan Krishnan along with advocates Adarsh Ramanujan, Arihant Jain, Ayushi Saxena, Shreyas Maheshwari, Manjira Dasgupta, Krishnakant and Pragya D appeared for Nayara. They were instructed by a team from Sidebar comprising managing partner Purusharth Singh, equity partner Anukrit Gupta and associate Dev Singh Sawhney..Advocates Susmit Pushkar, Anchit Oswal, Gaurav Sharma and Roshni Srivastava represented SAP India. Advocates Madhav Suri and Akanksha Singh represented another defendant. .[Read Judgment]
