दिल्ली उच्च न्यायालय ने SAP को नायारा एनर्जी को सेवाएँ जारी रखने का आदेश दिया, EU के प्रतिबंधों के बावजूद

Delhi High Court has intervened after SAP India – the Indian subsidiary of the Germany-based SAP SE – suspended support services to Nayara Energy, citing European Union (EU) sanctions over its 49% Russian ownership..

The decision came while the court was hearing an interim application in Nayara Energy Limited v SAP India Private Limited & Anr (2026).

SAP India had entered into a software licence agreement with Nayara on 17 August 2004. Several order forms were later generated, which included general terms and conditions. On 24 July 2025, SAP India informed Nayara that the licence had been rendered inactive due to an “export issue”.

The global export control team at SAP India told Nayara that access to services was blocked after the EU declared that business with Nayara was prohibited.

The EU released a list of sanctioned businesses, prohibiting business activities with entities, companies or individuals resulting in financial gain to Russia. This was in alignment with the EU’s condemnation of the war in Ukraine.

SAP India, with its parent company headquartered in Germany, claimed to be bound by the EU sanctions list.

Nayara argued that the sudden and unilateral withdrawal of services, without any notice, by SAP India violates their contract. Under the general terms and conditions, Indian law governs the contract, with an express overriding provision where the contract will be governed by Indian law in case of conflict.

Since the Indian government has not imposed any sanctions on Nayara or Russia, SAP India’s withdrawal breached its contractual obligations.

Nayara further argued that the EU resolution sanctioning Nayara does not have jurisdiction over SAP India, as SAP India is incorporated under Indian law.

Nayara relied on precedents from UK courts that say that foreign law or sanctions cannot excuse performance under English law. It was also submitted that the place of performance and governing law of a contract are determinative, rather than the location of related parties.

SAP India argued that, as per EU regulations, “economic resources” include assets of every kind, including “tangible or intangible, movable or immovable, which are not funds but may be used to obtain funds, goods or services”. SAP India submitted that its support services to Nayara were covered under this definition.

SAP India submitted that it was not seeking the application of the EU’s sanctions extraterritorially, as the services to Nayara are provided by the parent company.

Since the parent company, SAP SE, is headquartered in Germany, the place of performance is not localised in India. SAP India argues that, as part of the business is conducted within the EU, this brings the contract under the ambit of EU regulations.

SAP India also submitted that it is unable to provide the services without SAP SE as the required delivery mechanisms rest with the parent company.

Attention was also drawn to a provision in general terms and conditions where SAP would not be held responsible for delays in, or prevention of, delivery of services due to export laws. A force majeure clause was also cited, whereby non-performance due to reasons beyond its control does not constitute a breach.

The court deliberated over the question of governing law of the contracts and concluded that Indian law has been chosen by the parties, overriding foreign laws.

The court, relying on Hari Shankar Jain v Sonia Gandhi (2001) and Rasmala Trade Finance Fund v Raman Gupta (2019), said it could not take judicial notice of EU sanctions and German law as they were foreign laws. The court also said it would only be able to act on the foreign law if it was proven to the satisfaction of the court.

The court rejected SAP India’s submission of inability to provide services, claiming that they were managed by SAP SE.

The court observed that the contracts between the parties made no mention of the same and rather the general terms and conditions defined the territory of licensing and support services to be “worldwide”. In the absence of any exclusive localisation, SAP India cannot claim exclusivity to a single location and claim impossibility.

The court observed that “the unilateral and abrupt suspension of the support services by defendant No. 1 is ex facie illegal and in breach of” their contract.

The court then allowed Nayara’s application for restoration of services while noting that the observations made in this instance were only for the application and they shouldl not have any bearing on the final outcome of the case. The case is ongoing and will next be heard on 18 November 2026.

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