Delhi High Court’s Directive to SAP India
In a significant legal development, the Delhi High Court has mandated SAP India to promptly restore its software and enterprise support services to Nayara Energy, an Indo-Russian oil refining enterprise. This ruling comes in response to the suspension of services by SAP following the European Union’s (EU) sanctions on Nayara in July 2025. The case, titled Nayara Energy Limited v SAP India Private Limited & Anr, highlights the legal intersection of international sanctions and domestic contractual obligations.
Judicial Findings on Contractual Obligations
Presiding over the matter, Justice Vikas Mahajan underscored that SAP’s discontinuation of services appeared to contravene the contractual agreement between the two companies. At the interlocutory stage, the Court observed that SAP could not leverage these unverified EU sanctions to argue that fulfilling the contractual obligations was unfeasible. Emphasizing the primacy of Indian law, the Court stated, “The contractual relationship between the parties is strictly governed by the domestic laws of the Republic of India.”
Geopolitical Considerations
Justice Mahajan also pointed out the critical importance of Nayara’s software infrastructure amid the “volatile geopolitical situation and the current oil crisis stemming from the USA/Israel conflict with Iran.” Despite SAP’s German origins, the Court noted the multinational nature of its operations, which span globally. “It is highly improbable that a multinational technology conglomerate like SAP is technologically or operationally incapacitated from routing its online support services through any of its non-EU regional hubs,” the judgment elaborated.
Implications for India’s Energy Sector
Nayara Energy, which contributes significantly to India’s energy requirements, was emphasized as needing uninterrupted technical support. The Court deemed this support “absolutely essential,” dismissing concerns over potential legal repercussions for SAP India. The Bench highlighted that no real or imminent threat of prosecution existed when an Indian corporate entity was fulfilling its contractual obligations under the Court’s directive.
Legal Proceedings and Arguments
The interim relief application filed by Nayara was granted by the Court, following SAP’s suspension of services post-Nayara’s inclusion in the EU sanctions list on July 18, 2025. SAP had argued that its parent company, SAP SE in Germany, was obligated to comply with EU sanctions and German export laws, making service continuation legally untenable. However, the Court found SAP’s defense insufficient, emphasizing the “worldwide” scope of support services outlined in the agreements, which did not necessitate exclusive delivery from Germany.
Resolution and Legal Representation
The Court rejected the notion that the dispute was rendered moot due to the expiration of Nayara’s last annual work order on December 31, 2025. It clarified that the work order was merely an internal purchase document under the overarching contractual framework. Consequently, the Bench ordered SAP to revert to the pre-July 24, 2025 status quo by resuming all support services to Nayara immediately.
Representing Nayara were Senior Advocates Rajiv Nayar and Dayan Krishnan, alongside a team from Sidebar, led by managing partner Purusharth Singh. SAP India was represented by Advocates Susmit Pushkar, Anchit Oswal, and others.
