CASE OVERVIEW
On 21st September 2026, the Delhi High Court through justice vikas mahajan passed an interim judgment in the light of Nayara energy limited versus SAP India private limited and anr. The problem was regarding EU sanctions and their implications on Indian contracts. Nayara energy pleaded the court to direct SAP India to restore its enterprise and software support services, which was stopped after Nayara was placed on sanctions. The court allowed Nayara’s interim application and directed SAP to continue their services that existed before 24 July 2025. The court cleared that these observations are only in the beginning stage and final decision of the suit is yet to be decided.
FACTS
Under EU regulation 269/2014In July 2025 the EU council added Nayara energy to sanction list citing its connection to Russian oil sector. SAP’s global export control team informed Nayara about withdrawal of services due to sanctions. SAP argued that as part of SAP group with a European parent, it had to comply with EU regulation. Nayara approached Delhi High Court and argued that Indian contractual bonds must be governed according to Indian law. SAP India couldn’t use foreign sanction to stop the contractual services which openly disregards Indian contractual framework.
THE COURT’S REASONING
In the first examination the court pointed out that agreements were governed by Indian law. Crucially, the general terms and conditions contain the clause stating how Indian law would prevail in case of any conflict with foreign regulation. This validated jurisdiction of courts in Delhi. The court considered whether the contracts could be specifically enforced. SAP argued that the relief sort would amount to mandatory injunction which the court rejected. It noted that support services had been provided for years and restoring them wouldn’t require court to supervise operational details. The whole problem started with EU sanctions which was part of foreign law. Court couldn’t just take judicial notice of foreign regulations and their application in the Indian contracts, their applicability and legal effect would need to be pleaded properly and proved during trial. The court also weighed the risk of SAP being exposed to prosecution upon service continuation. It concluded, on material before that and stated there was no real chance of such prospect merely because SAP India complied with India’s court direction.
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The court finally decided to apply interim mandatory injunction as refusing temporary protection can affect Nayara’s contractual rights and could make final suit practically ineffective by the time it was decided.
DECISION
The Delhi High Court allowed Nayara energy’s interim application. SAP India was directed to continue its services that existed before 24th July 2025 and restore the status quo. The court assured that this was interim direction and its observation will not be affecting the final decision of Main commercial suit. The matter was directed to be listed before the roster bench on 30 September 2026.
CONCLUSION
The judgment is interesting because it particularly deals between the intersection of foreign sanctions and contracts governed under Indian law. It showcases that just because of the existence of foreign regulatory body there is no automatic settlement of rights arising from Indian contract. At the interim stage the court focused on contractual terms, the governing law, nature of services and requirement for granting interim mandatory relief. The final outcome of commercial dispute remains open this case remains relevant to tech and commercial contracts involving MNC and corporate groups because it raises practical questions about the international sanctions with commercial obligation.
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