Foreign sanctions must be proved like any other fact: Delhi HC orders SAP to restore Nayara's support
An Indian court cannot take judicial notice of an EU regulation, the Delhi High Court holds, and a software vendor cannot rely on one it has not proved to walk away from an Indian contract.
On 24 July 2025 a refinery that supplies roughly eight per cent of India’s energy needs lost access to the support portal for the software that runs it. Six days earlier, the European Union had added its operator to a sanctions list. On 21 September 2026, after eleven hearings and a judgment running to 120 pages, the Delhi High Court ordered the switch thrown back on. In Nayara Energy Limited v. SAP India Private Limited & Anr., Justice Vikas Mahajan directed SAP India to restore the status quo ante as it existed prior to 24 July 2025 and to resume all enterprise and software support services immediately.
The reasoning matters well beyond the parties. An Indian court, the judgment holds, cannot take judicial notice of a European Union regulation. A defendant who wants to rely on foreign sanctions must prove them as a question of fact, through admissible expert evidence, like any other foreign law — and until it does, it cannot use them to suspend performance of a contract governed by Indian law.
A licence that outlived three owners
The contractual relationship is older than the dispute and older than the company’s present name. SAP India Private Limited, a subsidiary of SAP SE of Germany, granted non-exclusive perpetual licences to Essar Steel and its authorised affiliates for the use of specified SAP software products. Those licence rights were transferred by Essar Steel to Essar Oil Limited under an Assignment Agreement dated 22 June 2017. In 2018 Essar Oil Limited was renamed Nayara Energy Limited.
To operationalise the assigned licences and to buy additional products and support, Nayara and SAP India executed three Order Forms — software licence and support agreements — expressly governed by SAP’s General Terms and Conditions, the Schedules referenced by them, and the SAP Enterprise Support Schedule. A separate Delivered Support Agreement covered certain third-party modules. The commercial implementation ran for years through Annual Work Orders issued by Nayara, the last accepted Work Order being valid until 31 December 2025.
The Court was careful to separate two things that the argument tended to merge. What was in issue was the support services, not the licences. The licences, the judgment records, remain irrevocably vested in the plaintiff. The suspension attacked the maintenance, patching and service layer on which those licences depend — which is why an order about a support portal became an order about whether a refinery can keep running safely.
Serial number 639
On 18 July 2025 the Council of the European Union listed Nayara Energy at serial no. 639 under Article 2, Annexure I of EU Council Regulation No. 269/2014, the instrument concerning restrictive measures against actions undermining Ukraine’s territorial integrity, sovereignty and independence. The listing gave its own reasons: that Nayara is an entity established in India operating an important refinery in Vadinar, that the refinery is 49 per cent owned by the Russian State oil company Rosneft and is a major refiner of Russian crude, and that the energy sector provides substantial revenue to the Russian Government.
Six days later SAP India, citing that Regulation, unilaterally suspended the support services and denied Nayara access to the SAP Support Portal. Nayara sued, and applied under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for an interim mandatory injunction directing restoration of full access to the SAP Marketplace and the Online Service System as it existed prior to 24 July 2025, and the supply of hardware keys and software change registration keys.
Nayara’s case, argued by Mr Rajiv Nayar and Mr Dayan Krishnan, was that the suspension was ex facie wrongful. India has imposed no sanctions on Nayara and has not prohibited the rendering of these services; the judgment records the Ministry of External Affairs position that India does not subscribe to unilateral sanctions. The contracts are governed by Indian law, and a governing-law clause cannot be read as importing a foreign sanctions regime into an Indian contract by the back door.
SAP India’s answer, advanced by Mr Susmit Pushkar, rested on the Regulation itself. Relying on Article 17 on jurisdictional scope and Article 15a on the parent company’s “best efforts” obligation, it contended that continued performance in India would expose its German parent, SAP SE, to strict criminal liability in the European Union under German law. The contracts, it said, contained express contingencies about export prohibitions, so performance had either become void under Section 32 of the Indian Contract Act, 1872 or impossible under Section 56.
A regulation the Court was not entitled to read
Justice Mahajan grouped the rival contentions under six heads: the proper law of the contract; the applicability of EU sanctions and foreign law; Sections 32 and 56 of the Contract Act; the specific enforceability of the agreements; the alleged suppression of proceedings before the European Court of Justice; and the triple test for a mandatory injunction at the interim stage.
The second head decided the application. SAP India had placed EU Council Regulation No. 269/2014 on record and relied on it as the sole justification for the suspension. That made the foundational question, as the judgment puts it, whether the Court can even take judicial notice of this foreign law.
The answer came from the evidentiary framework. Section 52(1) of the Bharatiya Sakshya Adhiniyam, 2023 — the successor to Section 57(1) of the Indian Evidence Act, 1872 — requires a court to take judicial notice of all laws in force in the territory of India, including laws having extra-territorial operation, and of international treaties, agreements or conventions entered into by India. The provision, the Court observed, conspicuously does not include foreign law. An EU Council Regulation, enacted by a body of a foreign jurisdiction, is beyond cavil a foreign law and falls entirely outside Section 52(1).
That leaves one route, and the judgment names it: Section 39 of the BSA, the successor to Section 45 of the Evidence Act, under which the opinion of a person specially skilled in that foreign law is a relevant fact. Foreign law, in other words, enters an Indian courtroom as evidence, not as law.
Opinions that proved nothing
Both sides had filed expert opinions, and the Court examined them against that standard rather than accepting them as a formality. Each consisted solely of the expert’s personal interpretation of the text of Regulation No. 269/2014. None was backed by a sworn affidavit. No qualifications, credentials or specialised experience of any expert were on record. No authoritative commentary, no official guidance from EU institutions and no decision of the European courts on the applicability of the sanctions was cited in support.
The opinion SAP India relied on therefore amounted, in the Court’s words, to nothing more than an ipse dixit — a mere assertion that the Regulation operates as claimed. There was a further and independent defect: an expert’s opinion cannot be read into evidence automatically without the expert being examined and cross-examined as a witness. The material failed to meet even the threshold of legal admissibility, and left the Court no better placed than before.
What remained was the bare text of the EU Regulation and of the German Foreign Trade and Payments Act. Applying the settled position that an Indian court does not take judicial notice of foreign law, Justice Mahajan held that the onus of proving the EU Regulation and German law lay on SAP India, that they had to be proved as a question of fact, and that this Court will not enter into the arena of research or interpretation of foreign law. Evidence is yet to be adduced; only on its adduction can the Court decide whether the sanctions apply to SAP India at all or whether their invocation is legally tenable. At the interim stage the defendant cannot simply place reliance on EU Regulations to avoid its obligations under Indian law.
“Worldwide” cannot mean Germany
The frustration defences fell with the same finding, and then for an additional reason of their own.
On the SAP Enterprise Support Schedule, SAP India’s written statement asserted that the Schedule required compliance with the export control laws of various countries, including Germany. A bare perusal of the Schedule, the Court found, revealed no such thing: it does not independently contemplate or mandate compliance with the export control laws of foreign countries, and it contains no provision at all permitting termination or suspension of support services on the triggering of alleged export control laws.
Even leaving that aside, the fundamental hurdle remained. Because the Court could not take judicial notice of the sanctions, SAP India could not take advantage of unproven EU sanctions to argue that performance had become impossible and so escape its obligations under either Section 32 or Section 56 of the Contract Act.
The second answer went to the factual premise of impossibility. SAP India argued that support services are centrally managed and exclusively delivered through SAP SE in Germany, so that rendering them would necessarily violate the sanctions. The Court did not accept it. No agreement contains any stipulation that support shall be delivered from or routed through Germany by SAP SE. On the contrary, Clause 2 of the three Order Forms and Clause 1.14 of the General Terms and Conditions define the territory of the licences and the corresponding support services as “worldwide”.
Having contended that the territory is worldwide, the judgment reasons, the defendant cannot then take the diametrically opposite stand that “worldwide” connotes only SAP SE in Germany. In the absence of any express contractual mandate localising delivery in the European Union, a party cannot artificially restrict its own performance obligations to a single location in order to manufacture impossibility.
The pleadings themselves closed the point. SAP India had admitted that the support services are monitored across multiple time zones by resources based in Germany, the United States and India. The term “SAP Group” in the Delivered Support Agreement means the SAP parent and any of its associated companies, and is not confined to SAP SE in Germany. Technical support could therefore be provided or routed from any country where the group operates, outside the territorial reach of the sanctions. On the admissions and the express contractual provisions, the claim of exclusive dependence on Germany was contradictory and could not be accepted.
Eight per cent of India’s energy
A mandatory injunction at the interim stage is not granted on a prima facie case alone. The Court applied the higher threshold that such relief attracts: a case of a standard higher than a mere prima facie case, a serious or irreparable injury not compensable in money, and a balance of convenience in the applicant’s favour. On the first, the judgment records that the plaintiff established a strong prima facie case of a standard much higher than what is normally required.
On irreparable harm, the Court looked at what support services actually do. Nayara had not merely purchased a service; it relies on that service to sustain the core commercial software it licenses. Without ongoing support, the entire software ecosystem becomes vulnerable to unresolvable system failures, security breaches and critical software bugs. Migration to an alternative support framework would entail significant delay, substantial cost and operational disruption.
Two further matters weighed. A Petroleum and Natural Gas Regulatory Board regulation dated 12 December 2025 on cyber attack preparedness requires all refineries to maintain robust technical infrastructure so that operations are not stalled by imminent cyber threats — a requirement that assumes particular relevance, the Court noted, against a volatile geopolitical situation. And it was pleaded and not controverted that Nayara caters to approximately eight per cent of India’s energy needs. For critical infrastructure of that scale, uninterrupted technical support is absolutely essential.
The balance of convenience ran the same way. Restoring the services poses no inconvenience to SAP India, an Indian corporate entity, particularly when it had itself said it would have continued to provide them but for the trade sanctions. The threatened criminal prosecution of the German parent was, prima facie, not a tenable defence for the reasons already given; and since the direction runs against SAP India, there can be no real or imminent prospect of prosecution when an Indian company performs its contractual obligations under the direction of a court. Withholding relief, the Court concluded, would do violence to the sense of justice and render the suit infructuous by the time it reached final adjudication.
What the judgment settles, and what it does not
The findings are expressly prima facie, made for the purpose of the interim application, and the judgment clarifies that they have no bearing on the final adjudication of the suit. SAP India remains free to prove the Regulation and German law at trial in the manner the judgment describes, and the question whether the sanctions reach an Indian subsidiary at all is still open.
What is settled for the present is the allocation of the burden, and it is a practical point of some consequence for any Indian counterparty of a multinational group. A vendor that suspends performance by pointing to a foreign sanctions regime is making a claim of fact. It must plead that law, prove it through a properly qualified expert who files an affidavit and submits to cross-examination, and support the interpretation with authoritative material. An interpretation offered in a letter, however confidently expressed, is an assertion. Until it is proved, the contract is read as what it says it is: an agreement governed by Indian law, with a worldwide territory, and with obligations that continue.
Order
The application was allowed. SAP India was directed to restore the status quo ante as it existed prior to 24 July 2025 by immediately resuming all enterprise and software support services to Nayara Energy under the respective agreements. The observations were clarified to be purely prima facie for the purpose of the application under Order XXXIX Rules 1 and 2 CPC, with no bearing on the final adjudication of the suit on merits. The application was disposed of in those terms, and the suit and the remaining applications were listed on 30 September 2026 before the Roster Bench.