The Delhi High Court has directed SAP India to resume software and enterprise support services for Nayara Energy, holding at the interim stage that the company could not rely on European Union sanctions to suspend contractual obligations governed by Indian law.
Justice Vikas Mahajan passed the order while allowing Nayara Energy’s application for interim relief in its dispute with SAP.
The dispute traces back to July 2025, when Nayara was placed on the EU sanctions list. Shortly afterwards, SAP disabled the company’s access to its support portal, citing an “export issue”, and later informed Nayara that providing services to the sanctioned entity was prohibited.
Nayara challenged the suspension, arguing that its agreements with SAP were governed by Indian law and required the continuation of software and technical support.
SAP contended that the relevant services were being provided through its German parent, SAP SE, and that EU sanctions and German export-control requirements prevented it from continuing with the arrangement.
The High Court was not persuaded by that defence at the interim stage.
The Court noted that the agreements between the parties expressly provided for Indian law to govern their contractual relationship. The licence and support arrangements also covered a “worldwide” territory and did not require SAP’s services to be delivered exclusively from Germany.
Against that backdrop, the Court held that SAP could not confine its contractual performance to Germany and then contend that EU restrictions had made performance impossible.
The Court observed that SAP, as a multinational technology company with operations and infrastructure across different regions, could potentially route its support services through a non-EU hub.
The Bench also attached significance to Nayara’s role in India’s energy sector. It noted that the company meets nearly 8% of the country’s energy requirements and said continuity of its software infrastructure assumed particular importance amid the prevailing geopolitical and energy situation.
Another objection raised by SAP concerned the expiry of the last annual work order on December 31, 2025. The Court rejected the contention that this brought the dispute to an end.
It held that the work order was an internal purchasing document issued under the broader contractual framework and did not itself constitute the entire agreement between the parties.
The Court further observed that the interim direction was against SAP India, an Indian corporate entity, and therefore found no immediate basis at this stage to conclude that compliance with the Court’s order would expose it to prosecution.
SAP has consequently been directed to restore the position that existed before July 24, 2025 and immediately resume the software and enterprise support services provided to Nayara.
The order leaves the underlying contractual and regulatory questions open for further adjudication, but makes clear that, at the interim stage, foreign sanctions could not simply be invoked to sidestep obligations under an agreement expressly governed by Indian law.
