Delhi High Court Directs SAP India To Restore Support Services To Nayara Energy Amid EU Sanctions
The Delhi High Court has directed SAP India Private Limited to restore the position that existed before July 24, 2025, and immediately resume enterprise and software support services for Nayara Energy under their agreements.
Justice Vikas Mahajan passed the order on Nayara's plea for an interim mandatory injunction after SAP blocked its access to the SAP Support Portal on July 24. SAP's Global Export Control Team later told Nayara that it was covered by EU sanctions and that business with the company was prohibited.
Nayara argued that the suspension breached its contractual arrangements with SAP India, which were governed by Indian law. SAP contended that the EU sanctions prevented its German parent, SAP SE, from providing the support services.
The contractual relationship began with a SAP software licence agreement dated August 17, 2004 between SAP India and Essar Steel India.
The rights were later transferred to Essar Oil under an Assignment Agreement dated June 22, 2017. Essar Oil was subsequently renamed Nayara Energy. Three Order Forms executed in 2017 and 2020 governed additional software licences and support services.
The Order Forms incorporated SAP's General Terms and Conditions (GTC), while Order Forms 2 and 3 also incorporated the SAP Enterprise Support Schedule. The Order Forms covered the software licences and support, the GTC provided the broader contractual terms, and the Support Schedule governed SAP's enterprise support services.
The court found that the GTC expressly provided for Indian law to govern the agreements. It also provided that Indian law would prevail in the event of a conflict with foreign law, rules or regulations. The separate Delivered Support Agreement between SAP India and Nayara likewise provided for Indian law.
SAP argued that the support services operated through its global network, including SAP SE in Germany, and that the agreements contemplated a worldwide territory. Given SAP's worldwide support network, the court found that the services could potentially be provided from a non-sanctioned jurisdiction. It observed that providing the services from such a jurisdiction might be commercially more onerous, but would not make performance practically or legally impossible.
The court also rejected the argument that the Order Forms gave SAP an unrestricted right to suspend or terminate the support services.
Referring to the Order Forms, Justice Mahajan observed:
“Furthermore, there is absolutely no clause granting defendant no. 1 an unfettered or unilateral right to suspend or terminate the support services 'at will'. Consequently, the Order Forms are legally not determinable in nature.”
The court separately considered Clause 13.5 of the Delivered Support Agreement. That provision permitted termination in specified circumstances involving an embargo or comparable trade sanction expected to remain in place for six months or longer. The court held that this limited, cause-based termination provision did not make the agreement determinable in nature.
It also held that Clause 13.5 could not be used to suspend or terminate support under the separate SAP Enterprise Support Schedule, which did not contain a corresponding trade-sanctions ground for termination. The court found that the Delivered Support Agreement was a separate arrangement and could not be extended to the wider support services governed by the Order Forms, GTC and Support Schedule.
SAP argued that the EU sanctions made performance impossible or unlawful under Sections 32 and 56 of the Indian Contract Act. The court held that, at this stage, SAP could not rely on the foreign sanctions without establishing their applicability, scope and binding effect on the Indian contracts.
It also noted that the force majeure clauses provided for an extension of time, not termination. The court found that Nayara had a very strong prima facie case, with denial of support risking system failures, security breaches, and critical software bugs, besides delays, costs and disruption from alternative support.
Justice Mahajan also referred to a December 12, 2025 PNGRB regulation concerning “Cyber Attack preparedness”, observing that it requires refineries to maintain robust technical infrastructure to prevent operations from being stalled by cyber threats.
“Maintaining this critical software infrastructure without disruption assumes relevance particularly in light of the volatile geopolitical situation and the current oil crisis stemming from the USA/Israel war with Iran, as argued by the plaintiff.”
The court further noted that Nayara caters to approximately 8% of India's energy needs, a fact it recorded as uncontroverted.
Finding that irreparable harm and the balance of convenience also favoured restoration, the court directed SAP India to immediately resume the support services.
The court clarified that the findings were purely prima facie and would not affect the final adjudication of the suit. The matter is listed before the Roster Bench on September 30, 2026.
For Plaintiff: Senior Advocates Rajiv Nayar, Sr. Advocate, Dayan Krishnan with Adarsh Ramanujan, Anukrit Gupta, Arihant Jain, Ayushi Saxena, Shreyas Maheshwari, Manjira Dasgupta, Dev Singh,Krishnakant, Pragya D., Advocates
For Defendant: Susmit Pushkar, Anchit Oswal, Gaurav Sharma and Roshni Srivastava, Advocates for D1. Madhv Suri and Akanksha Singh, Advocates for D2