Introduction
In a decision dated 21 September 2026, the High Court of Delhi at New Delhi in case number CS(COMM) 1006/2025 (Nayara Energy Limited v. SAP India Private Limited & Anr.) rendered a judgment on whether SAP India could suspend enterprise and software support services after Nayara Energy was added to the European Union sanctions list.
Justice Vikas Mahajan allowed Nayara Energy’s interim application and directed SAP India to restore the position that existed before 24 July 2025 by immediately resuming all enterprise and software support services under the relevant agreements. The court stressed that its findings were prima facie and would not affect the final adjudication of the suit.
Factual Background
Nayara Energy Limited, formerly Essar Oil Limited, operates a large oil refinery and a network of retail fuel outlets in India. SAP India Private Limited supplies enterprise software and technology services.
The parties’ relationship originated in a Software End-User Value License Agreement dated 17 August 2004 between SAP India and Essar Steel India Limited. The licenses were non-exclusive and perpetual.
With SAP India’s consent, Essar Steel transferred the relevant rights, benefits and obligations to Essar Oil under an assignment agreement dated 22 June 2017, effective from 1 January 2017. Essar Oil was subsequently renamed Nayara Energy.
The parties then executed three software license and support order forms dated 22 June 2017, 16 November 2017 and 7 June 2020. Those order forms incorporated SAP’s General Terms and Conditions. The later forms also referred to the SAP Enterprise Support Schedule.
The support package included access to SAP’s support portal and Online Service System, software patches, generation of hardware and software-change registration keys, troubleshooting and assistance from SAP technical personnel. A separate SAP Delivered Support Agreement dated 29 March 2019 concerned four third-party modules supplied through SAP’s partner, Avaali Solutions Private Limited.
Annual work orders were used to implement the support arrangements commercially. The final work order referred to in the judgment covered 1 January to 31 December 2025, and Nayara said it had paid the support charges in advance.
On 24 July 2025, Nayara could no longer access the SAP Marketplace. At 13:24, an SAP agent said there appeared to be an “export issue” and that the licenses were inactive or expired. At 16:13, SAP’s Global Export Control Team said Nayara was subject to sanctions and that SAP could not approve the request because business with the company was prohibited. By the evening, access to the support portal had been blocked.
Why SAP Interrupted the Services
The immediate reason was Nayara’s inclusion, on 18 July 2025, at serial number 639 of Annex I to Council Regulation (EU) No 269/2014, as amended by Council Implementing Regulation (EU) 2025/1476.
The listing stated that Nayara’s Vadinar refinery was 49 per cent owned by the Russian state oil company Rosneft, that Nayara was a major refiner of Russian crude oil, and that the oil sector supplied substantial revenue to the Russian government.
SAP India said it is a subsidiary of SAP SE in Germany and that the support services were delivered through SAP group entities and centrally managed by the German parent. In SAP’s account, those services constituted intangible economic resources that could not be made available to a listed entity.
SAP relied on Article 17 of Regulation 269/2014, which addresses the regulation’s territorial reach, and Article 15a, which requires EU operators to undertake their best efforts to ensure that non-EU subsidiaries do not undermine the sanctions. SAP also referred to possible criminal and financial penalties under German law.
On 2 September 2025, SAP India told Nayara that, as part of an EU-headquartered group, SAP had to comply with economic sanctions and export-control laws in Germany, the EU and the United States. It stated that SAP was therefore compelled to suspend all transactions with Nayara, including goods, software, technology and services, until further notice.
Before the court, SAP also relied on contractual export-control provisions, force-majeure clauses and sections 32 and 56 of the Indian Contract Act, 1872. It argued that the sanctions either triggered an agreed contractual contingency or made continued performance unlawful or impossible.
The Contractual Wording
Clause 12.5 of the General Terms and Conditions selected Indian law and expressly addressed conflicts with foreign rules:
“This Agreement and any claims arising out of or relating to this Agreement and its subject matter shall be governed by and construed under the laws of the Republic of India, without reference to its conflicts of law principles. In the event of any conflicts between foreign law, rules, and regulations, and Indian law, rules, and regulations, Indian law, rules, and regulations shall prevail and govern.”
Clause 12.4 stated that the software, documentation and SAP materials were subject to export-control laws of several countries. It also acknowledged that export or import authorisations could delay or prevent delivery and could affect SAP’s ability to provide maintenance and support. The defined term “SAP Support,” however, did not appear among the items that the clause expressly made subject to foreign export-control laws.
The separate Delivered Support Agreement contained broader wording. Clause 13.5 expressly made “SAP Delivered Support” subject to export laws, including trade sanctions, and provided:
“SAP may terminate this Agreement with thirty days’ prior written notice if SAP or any relevant member of the SAP Group may not deliver or grant access to Software, SAP Delivered Support, Documentation and SAP Materials to End User due to an embargo or other comparable trade sanction, which is expected to be in place for six months or longer.”
Legal Considerations
Indian law governed the contracts
The court treated the parties’ express choice of law as decisive. The order forms incorporated the General Terms and Conditions, and the Enterprise Support Schedule formed part of the same framework. Clause 12.5 therefore applied to the support obligations.
The Delivered Support Agreement separately selected Indian law and New Delhi jurisdiction. The court held that, however the documents were grouped, their proper law was the substantive domestic law of India.
EU law had to be proved as foreign law
The court held that Regulation 269/2014 and the German Foreign Trade and Payments Act were foreign law for an Indian court. Under sections 52 and 39 of the Bharatiya Sakshya Adhiniyam, 2023, foreign law was not a matter of judicial notice and had to be pleaded and proved as a fact, ordinarily through admissible expert evidence.
The expert opinions placed on record were not supported by sworn affidavits, information establishing the experts’ qualifications, authoritative commentary, official guidance or European judicial decisions. The experts had also not been examined and cross-examined.
The court therefore declined to treat those opinions as admissible proof of the scope and effect of the EU and German rules. It left those matters for trial and held that SAP could not rely on unproven foreign law at the interim stage to avoid obligations governed by Indian law.
The court did not finally determine that the EU sanctions were inapplicable. It held that their applicability, jurisdictional reach and contractual effect could be decided only after the foreign law had been properly proved at trial.
The export clauses did not justify the wider suspension
The court drew a distinction between the contractual documents. Clause 12.4 of the General Terms and Conditions referred expressly to software, documentation and SAP materials, but omitted the separately defined support services. The expression “export control laws” was also not defined in the order forms or the General Terms and Conditions.
At the interim stage, the court was not prepared to read that expression as automatically encompassing the EU trade sanctions for the purpose of suspending all support.
Clause 13.5 of the Delivered Support Agreement did address SAP Delivered Support and trade sanctions. The court nevertheless found that this agreement was a separate, limited arrangement for four third-party modules supplied through Avaali.
It differed from the principal order-form framework in subject matter, territory and financial scale. The annual fee under it was approximately INR 2.33 million, while the support fee under the three order forms was approximately INR 75.27 million for 2025 on SAP’s own figures. Clause 13.5 could therefore not be used to suspend the enterprise support supplied under the order forms and Enterprise Support Schedule.
The contracts were not discharged or inherently determinable
The court rejected SAP’s reliance on sections 32 and 56 of the Indian Contract Act at this stage. The EU sanctions had not yet been proved, and routing support through a non-sanctioned part of SAP’s worldwide network might be commercially more onerous without being legally or practically impossible.
The force-majeure clauses extended the time for performance while the obstructing condition persisted. They did not provide for outright termination.
The court also found no statutory bar to specific enforcement. SAP did not have an unrestricted right to terminate the order forms or General Terms and Conditions at will. The Enterprise Support Schedule permitted termination only at defined points and did not authorise an immediate mid-term cessation on sanctions grounds.
SAP had not alleged non-payment or another contractual breach by Nayara. The annual work orders were treated as internal purchase documents implementing the binding contracts, rather than as the source of the support obligation itself.
The Interim Order
The court found that Nayara had established the heightened prima facie case required for a mandatory interim injunction. It considered the interruption capable of exposing the refinery’s software environment to unresolved failures, security breaches and critical bugs. Migration to another support structure would involve delay, cost and operational disruption.
The court also referred to cybersecurity requirements for refineries and the uncontroverted assertion that Nayara supplied approximately eight per cent of India’s energy needs.
Against that potential harm, the court considered restoration less burdensome for SAP India. It stated that an Indian company acting under an Indian court order did not face a real or imminent prospect of prosecution merely by performing its contractual obligations.
The application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure was allowed. SAP India was directed to restore the status quo ante as it existed before 24 July 2025 and immediately resume all enterprise and software support services under the respective agreements. The court expressly confined its observations to the interim application.
