Indo-Russian Oil Refiner Nayara Seeks to Restore SAP Software Services, Delhi HC Refuses Interim Relief

The Delhi High Court has refused to grant interim relief to Indo-Russian oil refining firm Nayara Energy on Tuesday. The refiner has been looking forward for SAP India to restore its software services, which remains critical for them to issue invoices.

Addressing the issue, Justice Amit Bansal said that he will consider granting an interim relief sought by Nayara only after hearing the stand from SAP. While issuing notice on the interim relief application filed by Nayara, the court said, “It is not a straightforward issue. I will need to have them put their reply.” The case is further due to be heard on October 29.

According to Nayara, the suspension of the software services by SAP was unnecessary. Speaking on behalf of Nayara Energy,Senior counsel Rajiv Nayar and Dayan Krishnan told the court that oil refining firm's agreement was with SAP India, and thus it cannot be subject to EU sanctions.

Additionally, Krishnan submitted that with the implementation of the GST 2.0 regime from Monday, the oil refiner was unable to issue any invoices because changes need to be made to the software which can only be done with the SAP’s help. He further stated, “I cannot invoice because my entire accounting is through SAP. I can’t make a manual change… With the change in the GST regime, I have to download the Indian specific module, which has been blocked.”

Further, Nayar also claimed that the refiner was generating 8.5% of the petroleum revenue for India, and its work was critical to the energy security of the country, as per a report in Economic Times.

However, the Indian arm of the software services company told the court that its parent company was based in Germany and that the Indian firm cannot provide its services on its own and need support from its parent.

Senior counsel Amit Sibal is representing the tech giant at the court and said that its officials would end up in a German jail for violating the EU sanctions if it were to restore the services to Nayara. He further mentioned that the company was yet to release any GST 2.0-related software patch to any other company. “I don’t have it. The services have been suspended from Germany because the contractual framework is such that the supply and support is not done purely from India by me,” Sibal said.

Back in July, Nayara had withdrawn a similar case filed against Microsoft from the High Court after the US tech giant had restored critical services to Russia's Rosneft-backed refinery and fuel marketing company. This was because Microsoft had suspended its services, including Outlook email accounts and Microsoft Teams, to Nayara after the European Union sanctioned Nayara. This led the oil refinery, formerly known as Essar Oil, to move to the High Court.

Nayara operates a major refinery in Gujarat and controls over 6,000 retail fuel outlets across India. They had accused Microsoft of “restricting Nayara Energy's access to its own data, proprietary tools, and products, despite these being acquired under fully paid-up licences.”

The European Union had imposed a new set of sanctions targeting Russian interests on July 18. The sanctions applied to companies including Nayara Energy, a major buyer of Russian oil, for the first time and were part of its continuing efforts to exert economic pressure on Russia over its war in Ukraine.