EU Sanctions and Indian Law: What the SAP/Nayara Case Means for Your German Company

When International Legal Systems Intersect with Your Day-to-Day Business Operations

What do you do if your German headquarters must restrict a business relationship due to sanctions regulations, but this may cause your Indian subsidiary to violate a local contract?

This very question is at the heart of a current case before the Delhi High Court. On September 21, 2026, the court issued a preliminary order directing SAP India to fully resume the software and support services for Nayara Energy that had previously been suspended. SAP had suspended the services in July 2025, citing EU sanctions and Nayara Energy’s ties to the Russian company Rosneft. The Economic Times

This case is relevant for German companies doing business in India because it highlights a scenario that until now often seemed purely theoretical: European sanctions, Indian court rulings, and ongoing business obligations can conflict with one another.

What at first glance appears to be a conflict between a global software company and an Indian energy firm may also affect other industries—such as cloud services, equipment maintenance, replacement parts, technical updates, financial processes, or supply chains.

SAP and Nayara Energy: The Delhi High Court Orders the Resumption of Support Services

On September 21, 2026, the Delhi High Court issued a preliminary order directing SAP India to fully resume the previously suspended software and support services for Nayara Energy. Among other things, this affected SAP ECC support, access to the SAP Support Portal, technical authorizations, and other support services.

Nayara Energy argued that the contracts between SAP India and Nayara Energy had been entered into under Indian law. SAP India must therefore fulfill its contractual obligations—regardless of the requirements that apply to SAP’s German parent company in Europe.

The Delhi High Court accepted this line of reasoning in a preliminary review. The court initially found that Nayara Energy had a strong case and determined that the suspension of services might violate the existing contracts. It also pointed out the significant operational risks that could result from the withdrawal of critical software support.

SAP India was therefore instructed to restore the situation to what it was before the services were suspended. This does not yet constitute a final decision on the matter. The final legal assessment of the underlying issues regarding sanctions and contract law is still pending.

Why This Case Is Relevant for German Companies Doing Business in India

If your Indian subsidiary relies on services from Germany or Europe, a legal issue is not the only concern in the event of a dispute. It also affects your business’s ability to operate:

• Can your subsidiary continue production?
• Will key IT systems and cloud services remain available?
• Will you continue to receive security updates and technical support?
• Can you continue your financial, tax, and reporting processes?
• Who makes the decision when the German headquarters and the Indian subsidiary are subject to different regulations?
• What are the consequences of a short-term service interruption for customers, employees, and government agencies?

This is precisely where the practical significance of the SAP/Nayara case lies. While a company may make a decision motivated by sanctions law, it may not be able to readily implement that decision operationally and contractually in India.

When EU Sanctions and Indian Contract Law Collide

This case is more than just a dispute over software support. It highlights a problem that is becoming increasingly significant for German companies doing business in India: International sanctions and export controls can directly interfere with ongoing contractual relationships and operational processes.

This can affect not only the delivery of goods or financial transactions, but also:

• Software licenses and cloud services,
• maintenance and support services,
• technical updates and security patches,
• access to platforms and portals,
• Spare parts and technical documentation,
• as well as support from German or European experts.

Different legal systems can lead to conflicting outcomes in such cases. European law may require a company to restrict or terminate a business relationship. At the same time, a local subsidiary may still be obligated to provide services under Indian law and the terms of its contracts.

An Indian court may then order the resumption of a service, while the German parent company must take into account potential sanctions, liability risks, and the personal responsibilities of its officers.

What Risks Sanctions Pose to IT, Support, and Business Operations in India

A short-term suspension of software access or support services can cause more than just commercial disadvantages. It can also disrupt production, logistics, financial accounting, tax processes, reporting, cybersecurity, or regulatory obligations.

This is particularly true when a German or European headquarters is closely linked to an Indian subsidiary and critical systems, data, or processes are operated across borders.

For your company, it is therefore crucial to understand its own dependencies:

• What services are provided by the German headquarters or European partners?
• Which systems and processes are essential for operations in India?
• Which company is the contracting party?
• Which law governs the respective agreement?
• What role do German, European, U.S., and Indian regulations play?
• Is there an alternative technical or organizational solution if services are interrupted on short notice?
• Have responsibilities and escalation procedures between headquarters and the subsidiary been clarified?

For medium-sized companies, such an assessment is particularly challenging. They often do not have in-house teams specializing in international sanctions law, Indian contract law, IT risk management, and business continuity. At the same time, they cannot rely on a compliance audit, once established, to cover all future conflict situations.

How Dr. Wamser + Batra Supports Companies with India Compliance and Risk Management

If you operate in India, a conflict between international sanctions law, Indian law, and day-to-day business operations can quickly become a strategic and operational challenge.

At Dr. Wamser + Batra, we help companies identify such cross-border risks at an early stage, clarify responsibilities between the German headquarters and the Indian subsidiary, and develop robust operational strategies.

These include, among other things:

• the analysis of business and supply chains,
• the assessment of local structures and dependencies,
• the identification of critical operational and IT processes,
• the development of emergency and escalation procedures,
• clarifying roles between headquarters, subsidiaries, and service providers,
• as well as support in implementing appropriate governance and compliance processes.

When a case-by-case legal or regulatory review is required, we collaborate with specialized legal and tax advisors. Our role is to translate legal requirements into the operational reality of doing business in India, so that an abstract compliance issue can be turned into an actionable decision.

After all, the crucial question is not only: What is legally permissible? But also: How can your business in India remain operational when different legal systems conflict with one another?

Note: The Delhi High Court’s ruling is a preliminary decision and does not constitute a final assessment of the underlying sanctions law issues.