Russia-backed Indian oil company loses bid to force SAP support as sanctions bite

Delhi High Court denies urgent relief after vendor halts services citing EU rules

An Indian court has refused urgent relief to an SAP customer after the vendor withheld support due to EU sanctions introduced in the summer.

The EU sanctioned Russia-backed Indian refiner Nayara Energy in July for trading Russian oil – already restricted following Russia's invasion of Ukraine.

Nayara Energy filed its lawsuit against SAP India after the company withdrew software support following the new sanctions.

According to local court reports, the Delhi High Court denied urgent relief compelling the vendor to continue services.

The energy company argued that since its contract was with SAP India, it was not subject to sanctions.

It told the court that because of the introduction of a new tax regime in India from September 22, it needed SAP to update its systems to comply.

"I cannot invoice because my entire accounting is through SAP. I can't make a manual change... With the change in the [tax] regime, I have to download the India-specific module, which has been blocked," argued Nayara representative Dayan Krishnan.

However, SAP advocate Susmit Pushkar said that support and updates relied on work from SAP in Germany.

An SAP spokesperson told local media: "SAP is committed to the highest standards of ethics and compliance, including adherence to regulations regarding export control and sanctions laws across jurisdictions. Our policy is to carry out all company activities in accordance with the letter and spirit of applicable laws in more than 180 countries in which we operate. We deeply value our customers; and will continue to engage with our customers, government authorities, and regulators in a responsible and law-abiding manner."

The Register has contacted SAP and Nayara for further comment. The case is set to continue into October.

In April 2022, SAP took a €130 million ($141 million) hit on revenue after withdrawing cloud services and on-prem software support from Russian customers. It earlier paused sales in response to the introduction of sanctions. ®