--- title: "Delhi High Court: Interim Mandatory Injunction Granted to Restore SAP Support Services Despite Invocation of EU Sanctions" date: 2026-10-28 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/nayara-energy-sap-interim-injunction-eu-sanctions/ --- # Delhi High Court: Interim Mandatory Injunction Granted to Restore SAP Support Services Despite Invocation of EU Sanctions Posted On - 28 October, 2026 • By - King Stubb & Kasiva ## **Summary:** The Delhi High Court allowed an application for an interim mandatory injunction filed by Nayara Energy Limited against SAP India Private Limited, directing SAP India to immediately restore the status quo ante as it existed prior to July 24, 2025, by resuming all enterprise and software support services under the relevant agreements. The Court held, at a prima facie stage, that the contractual arrangements were governed by Indian law and that SAP India had not established a sufficient basis to suspend its contractual performance by relying on EU sanctions imposed on Nayara Energy. The Court also rejected the contention that the agreements had become impossible to perform under Sections 32 or 56 of the Indian Contract Act, 1872, or that the relief was barred by the provisions of the Specific Relief Act, 1963. Considering the potential consequences of continued denial of support services to the plaintiff’s critical operational infrastructure, the Court found that the requirements for granting an interim mandatory injunction were satisfied. The Court clarified that its observations were confined to the interim application and would not affect the final adjudication of the suit on merits. ## **Facts:** - Nayara Energy Limited, formerly known as Essar Oil Limited, had acquired rights under a Software End-User Value License Agreement originally executed in 2004 between SAP India Private Limited and Essar Steel India Limited. The rights were subsequently assigned to Essar Oil Limited under an Assignment Agreement dated June 22, 2017, with effect from January 1, 2017. - To operationalise the assigned licences and procure additional software products and support services, the parties executed three Software License and Support Agreements, designated as Order Forms, dated June 22, 2017, November 16, 2017, and June 7, 2020. These agreements were governed by the General Terms and Conditions (“GTC”) and, where applicable, the SAP Enterprise Support Schedule. A separate SAP Delivered Support Agreement dated March 29, 2019, provided for certain supplementary support services through SAP’s partner, Avaali Solutions Private Limited. - The parties’ contractual arrangement was implemented through annual Work Orders. The last accepted Work Order covered the period from January 1, 2025, to December 31, 2025, and the plaintiff asserted that the requisite payment had been made in advance. - On July 18, 2025, Nayara Energy was included in the EU sanctions list under Council Regulation (EU) No. 269/2014, as amended. On July 24, 2025, SAP India suspended the plaintiff’s access to the SAP Support Portal, citing an alleged export-control issue and the applicability of the EU sanctions. - The plaintiff subsequently requested restoration of the support services. By an email dated September 2, 2025, SAP India maintained that, as an EU-headquartered group’s Indian subsidiary, it was required to suspend transactions with the plaintiff to ensure compliance with the applicable sanctions and export-control laws. - Aggrieved by the unilateral suspension, Nayara Energy instituted the present commercial suit and filed an application under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908, seeking restoration of access to the SAP Marketplace and Online Service System, provision of necessary software and hardware keys, reinstatement of technical support and protection against further interference with its contractual rights. - The plaintiff contended that the agreements were governed by Indian law, that the suspension violated the subsisting contractual obligations and that the loss of support services threatened the continuity, security and regulatory compliance of its refinery operations. SAP India opposed the application, relying upon the EU sanctions, contractual provisions concerning export-control laws and force majeure, the alleged impossibility of performance, the determinable nature of the agreements and the pendency of proceedings before the European Court of Justice. ## **Issues:** - Whether the agreements between the parties were governed by Indian law and whether SAP India could rely upon EU sanctions to suspend its contractual obligations to an Indian entity. - Whether the sanctions and the alleged involvement of SAP SE, Germany, rendered performance impossible or discharged SAP India’s contractual obligations under Sections 32 and 56 of the Indian Contract Act, 1872. - Whether the agreements were determinable or otherwise incapable of specific enforcement under the Specific Relief Act, 1963, thereby precluding the grant of an interim mandatory injunction. - Whether the plaintiff had satisfied the stringent requirements for an interim mandatory injunction directing restoration of the support services. ## **Judgement:** - **Indian Law Held to Govern the Contractual Relationship:** Clause 12.5 of the GTC expressly stipulated that Indian law would govern the agreements and prevail in case of conflict with foreign law. The Court held that this framework applied to the Order Forms and the SAP Enterprise Support Schedule. The separate Delivered Support Agreement also expressly provided for Indian law. - **Reliance on EU Sanctions Not Sufficient to Justify Suspension:** The Court found, prima facie, that SAP India had not established a sufficient contractual or legal basis to unilaterally suspend the support services by relying on EU sanctions. The Court’s findings concerned SAP India’s contractual obligations and did not invalidate the sanctions themselves. - **Sections 32 and 56 of the Indian Contract Act, 1872:** The Court examined the force majeure, export-control and impossibility defences raised by SAP India. It found that the defendant had not sufficiently demonstrated that these provisions justified suspending all enterprise support services, particularly when increased difficulty or inconvenience does not, by itself, establish impossibility of performance. - **Contractual Arrangements Examined Separately:** The Court considered whether the Order Forms, GTC, Support Schedule and Delivered Support Agreement constituted a single composite arrangement. It noted that SAP India had not clearly identified the specific agreement or clause authorising the suspension, particularly in relation to the distinct support obligations under the respective agreements. - **Specific Relief Act Objections Not Accepted as a Bar to Interim Relief:** Despite SAP India’s contention that the agreements were determinable and involved continuous duties incapable of specific enforcement under Sections 14 and 41(e) of the Specific Relief Act, 1963, the Court did not consider these objections sufficient to preclude interim relief in the circumstances. - **Foreign Proceedings Not a Bar to the Indian Suit:** The Court distinguished the proceedings before the European Court of Justice, which challenged Nayara Energy’s designation as a sanctioned entity, from the present suit seeking contractual and injunctive relief. It also relied on Explanation 7 to Section 10 CPC, holding that the foreign proceedings did not preclude adjudication of the Indian suit. - **Requirements for Interim Mandatory Injunction Satisfied:** Applying the stringent test for interim mandatory injunctions, including the principles in Deoraj v. State of Maharashtra, the Court found that withholding relief risked perpetuating injustice and rendering the final relief ineffective. - **Irreparable Harm and Balance of Convenience Favoured the Plaintiff:** The Court considered the importance of SAP support services to Nayara Energy’s refinery operations, regulatory compliance and cybersecurity. It found, prima facie, that potential prosecution of SAP SE in Germany was not a tenable ground to deny relief against SAP India, particularly when the latter could perform its contractual obligations pursuant to a court order. - **Support Services Directed to Be Restored:** The Court allowed the application and directed SAP India to restore the status quo ante as it existed before July 24, 2025, by immediately resuming all enterprise and software support services under the relevant agreements. It clarified that its observations were prima facie and would not affect the final adjudication of the suit on merits. ## **Analysis:** This judgment addresses the intersection of contractual performance, foreign sanctions and the jurisdiction of Indian courts to protect contractual rights under agreements governed by Indian law. The Court’s reasoning underscores the significance of the parties’ express governing-law clause and the need to establish a clear contractual or legal basis before suspending performance on the ground of foreign regulatory restrictions. It also demonstrates that reliance upon force majeure, contingent-contract provisions or frustration does not, by itself, establish that contractual obligations stand discharged; the relevant contractual language and the actual effect of the alleged impediment must be examined. The judgment is particularly significant for its application of the stringent standard governing interim mandatory injunctions. Where the denial of contractual services threatens serious operational consequences and risks rendering the ultimate relief ineffective, a court may direct restoration at the interlocutory stage, provided the requisite prima facie case, irreparable injury and balance of convenience are established. However, the ruling must be read in its procedural context: the Court’s conclusions were expressly prima facie, and the order does not constitute a final adjudication of the parties’ contractual rights or a general determination that foreign sanctions can never affect the performance of contracts governed by Indian law. *Last Updated on 28 October, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)