Nayara Energy withdraws plea against Microsoft after services restored

Nayara Energy Limited has withdrawn its petition before the Delhi High Court against Microsoft Corporation (India) Pvt Ltd after the tech major restored services that had been abruptly discontinued, leading to the resolution of the dispute between the parties. (Nayara Energy Vs Microsoft India)

The matter was heard by Justice Purushaindra Kumar Kaurav, who had earlier on July 28 issued notice to Microsoft after Nayara alleged that the unilateral suspension of services under the Microsoft Business and Services Agreement (MBSA) had caused severe operational disruption. Appearing for Nayara, Senior Advocates Rajiv Nayar and Dayan Krishnan argued that the suspension violated the contractual terms and warranted urgent interim relief under Section 9 of the Arbitration and Conciliation Act, 1996.

When the matter was taken up on July 30, the Court was informed that Microsoft had since restored the services.

In view of this development, Nayara, represented by Senior Advocates Rajiv Nayar and Dayan Krishnan stated that they were not pressing for interim orders. However, they urged the Court to consider issuing notice in the main arbitration application.

Justice Kaurav recorded that, since the services had already been restored, it would not be appropriate to keep the Section 9 petition pending. The Court, accordingly, permitted the matter to be withdrawn, while clarifying that the petitioner would be at liberty to approach the Court again if any grievance arose in the future

The dispute arose after Microsoft Corporation (India) Pvt Ltd abruptly suspended its services to Nayara Energy Limited, a private Indian oil refiner partly owned by Russia’s Rosneft. The suspension, which affected critical tools such as email and cloud access, followed European Union sanctions imposed on Nayara’s Vadinar refinery on July 18, 2025, as part of broader measures targeting Russian-linked entities. Microsoft reportedly acted to comply with these EU sanctions, though Nayara contended that the disruption had no legal basis under Indian law or the contractual terms of the Microsoft Business and Services Agreement (MBSA).

Caught off guard, Nayara claimed that it was denied access to its own data despite holding fully paid licenses, and that Microsoft’s unilateral action caused significant operational hardship. In response, Nayara urgently moved the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, seeking interim relief and restoration of services.

Microsoft was represented by Senior Advocates Sandeep Sethi and Amit Sibal, instructed by a team from Cyril Amarchand Mangaldas comprising of Anuradha Mukherjee, Partner (Head - Disputes, North India); Amita Gupta Katragadda, Partner (Deputy Head - Disputes); Soumya Dasgupta, Principal Associate; Shivam Tiwari, Senior Associate and Aviral Singhal, Associate.