SAP India abruptly suspended support services to Nayara Energy, citing European Union sanctions triggered by the company’s 49% Russian ownership.
Delhi High Court Restores Services After SAP India Cuts Access
The Delhi High Court ordered SAP India to restore software support services to Nayara Energy following an interim application filed in Nayara Energy Limited v SAP India Private Limited & Anr (2026). SAP India, a subsidiary of Germany-based SAP SE, had blocked access to its systems after the European Union issued sanctions prohibiting business activities that result in financial gain for Russia.
Nayara Energy argued that the unilateral withdrawal violated their contract. Under the general terms and conditions agreed upon by both parties, Indian law governs the contract with an explicit overriding provision for any conflicts. Because the Indian government has not imposed sanctions on Nayara or Russia, the company maintained that SAP India breached its legal obligations.
EU Sanctions and Global Export Controls Collide with Indian Law
The dispute stems from EU regulations adopted in response to the war in Ukraine, which prohibit transactions with entities providing financial benefits to Russia. SAP India’s global export control team informed Nayara on July 24, 2025, that its license was inactive due to an export issue stemming from the EU sanctions list.
SAP India argued that economic resources under EU regulations include tangible and intangible assets used to obtain funds or services. The company contended that it was bound by these rules because its parent company, SAP SE, is headquartered in Germany and plays a direct role in delivering the required software mechanisms. SAP India pointed to a force majeure clause and a provision exempting the company from delivery delays caused by export laws.
The court rejected SAP India’s jurisdictional defense. It held that Indian law governs the contracts and noted that foreign laws, such as EU regulations and German law, cannot be taken up for judicial notice unless proven to the court’s satisfaction. The court observed that the licensing agreements defined the territory for support services as worldwide, invalidating SAP India’s claims of exclusive localization in Germany.
Next Legal Steps in the Ongoing Dispute
The Delhi High Court’s interim decision requires SAP India to maintain support services while litigation proceeds. The court emphasized that its initial observations apply strictly to the interim application and will not prejudice the final outcome of the case. The matter is scheduled for its next hearing on November 18, 2026.
Frequently Asked Questions About the SAP and Nayara Dispute
When did SAP India stop providing services to Nayara Energy?
SAP India informed Nayara Energy that its software license was inactive on July 24, 2025, citing export restrictions linked to EU sanctions.
What is the ownership structure of Nayara Energy?
Nayara Energy is 49% owned by Russian interests, which brought the energy firm under the scope of European Union sanctions targeting entities providing financial gain to Russia.
Which legal jurisdiction governs the software contract?
The Delhi High Court concluded that Indian law governs the contract between SAP India and Nayara Energy, overriding foreign regulatory claims.
When is the next court hearing scheduled?
The ongoing case will resume in the Delhi High Court on November 18, 2026.