Nayara Takes SAP India to Court Over Blocked Software Services

The Delhi High Court on Tuesday declined to grant interim relief to Nayara Energy, which sought the restoration of critical SAP software services suspended in compliance with European Union (EU) sanctions.

Justice Amit Bansal observed that the matter was “not straightforward” and said interim relief would be considered only after hearing SAP’s response. The case will next be heard on October 29.

SAP India suspended services to Nayara citing legal constraints under EU sanctions on Russia. The move is linked to Nayara’s shareholding structure, as 49.13% of the company is owned by Rosneft, the Russian state-controlled oil major.

The restrictions, Nayara argued, have crippled its operations, particularly compliance with India’s GST 2.0 regime and invoicing systems. Failure to meet GST obligations could expose the company to legal and financial penalties.

Nayara contends that the suspension is unjustified, pointing out that it operates largely within India and serves the Indian market, despite its partial Russian ownership. The company further argued that extending EU sanctions into India amounts to an extraterritorial application of law that undermines its operational rights.

The suspension, according to Nayara, not only disrupts regulatory compliance but also threatens to derail its supply chains, financial reporting, and customer commitments.

Nayara Energy operates one of India’s largest refineries, with a capacity of 20 million tonnes per annum, making it a key supplier of petroleum products nationwide. Any prolonged disruption of its digital and compliance systems could result in significant operational and financial losses.

While SAP has defended its position citing mandatory compliance with EU sanctions, the court will consider its formal response before deciding on interim relief. The case highlights the complex intersection of global sanctions, corporate compliance, and India’s domestic regulatory requirements.

The matter is slated for further hearing on October 29, 2025.