{"id":33526,"date":"2026-10-02T11:25:06","date_gmt":"2026-10-02T11:25:06","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=33526"},"modified":"2026-10-02T12:12:05","modified_gmt":"2026-10-02T12:12:05","slug":"foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/","title":{"rendered":"Foreign Sanctions vs. Indian Law: Can EU or US Sanctions Override an Indian Contract?"},"content":{"rendered":"\n<h1 id=\"h-foreign-sanctions-vs-indian-law-can-eu-or-us-sanctions-override-an-indian-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Foreign_Sanctions_vs_Indian_Law_Can_EU_or_US_Sanctions_Override_an_Indian_Contract\"><\/span>Foreign Sanctions vs. Indian Law: Can EU or US Sanctions Override an Indian Contract?<span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What the Nayara Energy\u2013SAP Interim Judgment Really Decides About Foreign Sanctions, Indian Contracts, Force Majeure, and Cross-Border Litigation<\/strong><\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Foreign_Sanctions_vs_Indian_Law_Can_EU_or_US_Sanctions_Override_an_Indian_Contract\" >Foreign Sanctions vs. Indian Law: Can EU or US Sanctions Override an Indian Contract?<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Introduction_When_Foreign_Sanctions_Collide_With_an_Indian_Contract\" >Introduction: When Foreign Sanctions Collide With an Indian Contract<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#1_The_Nayara_Energy%E2%80%93SAP_Case\" >1. The Nayara Energy\u2013SAP Case<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#2_What_the_Delhi_High_Court_Actually_Decided\" >2. What the Delhi High Court Actually Decided<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#3_The_EU_Sanctions_Listing_What_Exactly_Happened\" >3. The EU Sanctions Listing: What Exactly Happened?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#4_The_EU_Regulation_and_the_Indian_Contract_Are_Two_Different_Legal_Questions\" >4. The EU Regulation and the Indian Contract Are Two Different Legal Questions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#5_The_Contractual_Governing_Law_Was_Crucial\" >5. The Contractual Governing Law Was Crucial<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#6_Foreign_Law_Must_Be_Properly_Proved\" >6. Foreign Law Must Be Properly Proved<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#7_SAP_India_and_SAP_SE_Are_Not_Automatically_the_Same_Legal_Person\" >7. SAP India and SAP SE Are Not Automatically the Same Legal Person<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#8_%E2%80%9CWorldwide%E2%80%9D_Does_Not_Mean_Every_Contract_Had_the_Same_Territorial_Scope\" >8. \u201cWorldwide\u201d Does Not Mean Every Contract Had the Same Territorial Scope<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#9_Section_32_Start_With_the_Contract\" >9. Section 32: Start With the Contract<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#10_Section_56_Is_Performance_Really_Impossible_or_Unlawful\" >10. Section 56: Is Performance Really Impossible or Unlawful?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#11_The_NAFED_Contrast_Indian_Prohibition_Versus_Foreign_Prohibition\" >11. The NAFED Contrast: Indian Prohibition Versus Foreign Prohibition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#12_Commercial_Onerousness_Is_Not_Automatically_Legal_Impossibility\" >12. Commercial Onerousness Is Not Automatically Legal Impossibility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#13_Force_Majeure_Does_Not_Automatically_Mean_Termination\" >13. Force Majeure Does Not Automatically Mean Termination<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#14_The_Work_Order_and_the_Underlying_Contract_Are_Not_the_Same_Thing\" >14. The Work Order and the Underlying Contract Are Not the Same Thing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#15_EU_Regulation_2692014_Must_Not_Be_Confused_With_Regulation_8332014\" >15. EU Regulation 269\/2014 Must Not Be Confused With Regulation 833\/2014<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#16_What_Does_Article_2_of_Regulation_2692014_Actually_Mean_for_a_Service_Contract\" >16. What Does Article 2 of Regulation 269\/2014 Actually Mean for a Service Contract?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#17_US_Sanctions_Present_a_Different_Legal_Architecture\" >17. US Sanctions Present a Different Legal Architecture<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#18_Foreign_Sanctions_Regulatory_Risk_and_Corporate_Policy_Are_Different_Things\" >18. Foreign Sanctions, Regulatory Risk and Corporate Policy Are Different Things<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#19_Cloud_SaaS_and_Enterprise_Software_Create_a_New_Category_of_Contractual_Risk\" >19. Cloud, SaaS and Enterprise Software Create a New Category of Contractual Risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#20_The_Microsoft_Episode_Important_Operationally_Not_a_Sanctions_Holding\" >20. The Microsoft Episode: Important Operationally, Not a Sanctions Holding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#21_The_Ten-Step_%E2%80%9CForeign_Sanctions_vs_Indian_Law%E2%80%9D_Test\" >21. The Ten-Step \u201cForeign Sanctions vs Indian Law\u201d Test<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_1_%E2%80%94_Is_There_an_Actual_Sanctions_Measure\" >Step 1 \u2014 Is There an Actual Sanctions Measure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_2_%E2%80%94_Does_It_Apply_to_This_Actor\" >Step 2 \u2014 Does It Apply to This Actor?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_3_%E2%80%94_Does_It_Cover_This_Transaction\" >Step 3 \u2014 Does It Cover This Transaction?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_4_%E2%80%94_Does_It_Actually_Prohibit_Performance\" >Step 4 \u2014 Does It Actually Prohibit Performance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_5_%E2%80%94_Who_Made_the_Contractual_Promise\" >Step 5 \u2014 Who Made the Contractual Promise?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_6_%E2%80%94_Does_the_Contract_Incorporate_the_Foreign_Restriction\" >Step 6 \u2014 Does the Contract Incorporate the Foreign Restriction?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_7_%E2%80%94_What_Remedy_Does_the_Contract_Provide\" >Step 7 \u2014 What Remedy Does the Contract Provide?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_8_%E2%80%94_Is_Alternative_Lawful_Performance_Possible\" >Step 8 \u2014 Is Alternative Lawful Performance Possible?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_9_%E2%80%94_Has_the_Foreign_Law_Been_Properly_Proved\" >Step 9 \u2014 Has the Foreign Law Been Properly Proved?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Step_10_%E2%80%94_What_Does_Indian_Law_Provide\" >Step 10 \u2014 What Does Indian Law Provide?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#22_What_Makes_the_Indian_Companys_Case_Stronger\" >22. What Makes the Indian Company&#8217;s Case Stronger?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#23_What_Makes_the_Foreign_Companys_Defence_Stronger\" >23. What Makes the Foreign Company&#8217;s Defence Stronger?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#24_What_Should_Indian_Companies_Put_Into_Their_Contracts\" >24. What Should Indian Companies Put Into Their Contracts?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Sanctions\" >Sanctions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Parent-Company_Dependence\" >Parent-Company Dependence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Alternative_Performance\" >Alternative Performance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Suspension\" >Suspension<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Notice\" >Notice<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Licensing\" >Licensing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Data_Access\" >Data Access<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Transition_Assistance\" >Transition Assistance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Business_Continuity\" >Business Continuity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Emergency_Relief\" >Emergency Relief<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#25_What_Should_a_Foreign_Technology_Vendor_Do\" >25. What Should a Foreign Technology Vendor Do?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#26_A_Modern_Sanctions_Clause_Should_Distinguish_Suspension_From_Termination\" >26. A Modern Sanctions Clause Should Distinguish Suspension From Termination<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#27_Can_an_Indian_Court_Order_Performance_That_May_Expose_a_Foreign_Parent_to_Liability\" >27. Can an Indian Court Order Performance That May Expose a Foreign Parent to Liability?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#28_What_the_Nayara%E2%80%93SAP_Interim_Judgment_Does_Not_Decide\" >28. What the Nayara\u2013SAP Interim Judgment Does Not Decide<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#29_Questions_Indian_Courts_May_Eventually_Have_to_Answer\" >29. Questions Indian Courts May Eventually Have to Answer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-52\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#30_A_Critical_Distinction_Indian_Law_Does_Not_Make_a_Business_Immune_From_Foreign_Sanctions\" >30. A Critical Distinction: Indian Law Does Not Make a Business Immune From Foreign Sanctions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-53\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#31_The_Broader_Corporate_Lesson_Foreign_Regulatory_Dependency\" >31. The Broader Corporate Lesson: Foreign Regulatory Dependency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-54\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#32_The_Lawyers_View\" >32. The Lawyer&#8217;s View<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-55\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Conclusion_Draft_the_Clause_Before_the_Portal_Goes_Dark\" >Conclusion: Draft the Clause Before the Portal Goes Dark<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-56\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#The_Six-Step_Sanctions_Analysis\" >The Six-Step Sanctions Analysis<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-57\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#The_Practical_Lesson_for_Indian_Companies\" >The Practical Lesson for Indian Companies<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-58\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-59\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Can_EU_sanctions_automatically_cancel_an_Indian-law_contract\" >Can EU sanctions automatically cancel an Indian-law contract?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-60\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Can_a_foreign_company_stop_providing_services_to_an_Indian_company_because_of_sanctions\" >Can a foreign company stop providing services to an Indian company because of sanctions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-61\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#What_did_the_Delhi_High_Court_decide_in_Nayara_Energy_v_SAP_India\" >What did the Delhi High Court decide in Nayara Energy v. SAP India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-62\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Is_the_Nayara%E2%80%93SAP_interim_judgment_a_final_decision\" >Is the Nayara\u2013SAP interim judgment a final decision?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-63\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Does_Section_56_of_the_Indian_Contract_Act_apply_to_foreign_sanctions\" >Does Section 56 of the Indian Contract Act apply to foreign sanctions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-64\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Can_an_Indian_subsidiary_rely_upon_sanctions_affecting_its_foreign_parent\" >Can an Indian subsidiary rely upon sanctions affecting its foreign parent?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-65\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Does_a_foreign_parent_and_its_Indian_subsidiary_constitute_the_same_legal_entity\" >Does a foreign parent and its Indian subsidiary constitute the same legal entity?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-66\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#What_should_an_Indian_company_do_if_a_foreign_software_provider_suddenly_suspends_services\" >What should an Indian company do if a foreign software provider suddenly suspends services?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-67\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Selected_Legal_Authorities_and_Primary_Sources\" >Selected Legal Authorities and Primary Sources<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-68\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Indian_Authorities\" >Indian Authorities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-69\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#European_Union\" >European Union<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-70\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Comparative_Authority\" >Comparative Authority<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-71\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Need_Legal_Assistance_With_a_Cross-Border_Sanctions_or_Contract_Dispute\" >Need Legal Assistance With a Cross-Border Sanctions or Contract Dispute?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-72\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Adv_Tarun_Choudhury\" >Adv. Tarun Choudhury<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-73\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Legal_Disclaimer\" >Legal Disclaimer<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-74\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-sanctions-vs-indian-law-indian-contracts-nayara-sap\/#Important_Links\" >Important Links<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p class=\"wp-block-paragraph\">By Adv. Tarun Choudhury &#8211; \ud83d\udcf1 WhatsApp: 91-9881244487<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Advocate | 25+ Years of Legal Experience<\/strong><\/p>\n\n\n\n<h2 id=\"h-introduction-when-foreign-sanctions-collide-with-an-indian-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction_When_Foreign_Sanctions_Collide_With_an_Indian_Contract\"><\/span>Introduction: When Foreign Sanctions Collide With an Indian Contract<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Imagine an Indian company that has entered into a long-term agreement with a multinational technology company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Indian company has paid its license fees. Its employees use the software every day. Its accounting, procurement, inventory, tax, supply chain, and operational systems may all depend upon the technology.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Then, without an Indian court declaring the contract terminated, the company receives an email:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cDue to sanctions applicable to your company, we are suspending your services.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The consequences can be immediate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The issue is no longer merely whether the customer has breached a contract. It becomes a question involving foreign sanctions law, Indian contract law, corporate personality, conflict of laws, force majeure, frustration, foreign-law evidence, and urgent interim relief.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The recent litigation between Nayara Energy Limited and SAP India Private Limited before the Delhi High Court brings this problem into sharp focus.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The central question is<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Can a foreign sanctions regime permit a foreign company, or its Indian subsidiary, to stop performing an Indian-law contract with an Indian company?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is no universal yes-or-no answer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The interim record in the Nayara\u2013SAP litigation supports a working rule of practice, not a final rule of law:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A foreign sanctions listing does not, by itself, establish that an Indian contractual obligation has been discharged. The party relying upon foreign sanctions must establish the precise legal prohibition, its application to the relevant entity and transaction, and the contractual and Indian-law consequences that are said to follow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, an Indian governing-law clause does not erase genuine regulatory obligations imposed upon a foreign company by the jurisdiction in which that company is legally subject to regulation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding that distinction is essential.<\/p>\n\n\n\n<h2 id=\"h-1-the-nayara-energy-sap-case\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_The_Nayara_Energy%E2%80%93SAP_Case\"><\/span>1. The Nayara Energy\u2013SAP Case<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The principal case is<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nayara Energy Limited v. SAP India Private Limited &amp; Anr., CS(COMM) 1006\/2025, I.A. 23754\/2025, judgment dated 21 September 2026 (Vikas Mahajan J.).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nayara Energy Limited, formerly Essar Oil Limited, operates the Vadinar refinery in Gujarat.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SAP India had contractual arrangements with Nayara concerning SAP software licenses and support services. Defendant No. 2 was Avaali Solutions Private Limited, SAP&#8217;s partner under the relevant Delivered Support Agreement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The contractual relationship developed over many years and included:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an earlier SAP Software End-User Value License Agreement;<\/li>\n\n\n\n<li>assignment of license rights;<\/li>\n\n\n\n<li>several order forms;<\/li>\n\n\n\n<li>a SAP Delivered Support Agreement;<\/li>\n\n\n\n<li>and subsequent support arrangements.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">On 18 July 2025, Nayara Energy was added as item 639 of Annex I to Council Regulation (EU) No. 269\/2014 by Council Implementing Regulation (EU) 2025\/1476.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The EU listing referred to the Vadinar refinery, Rosneft&#8217;s 49% ownership, Nayara&#8217;s processing of Russian crude, and the significance of the oil sector to Russian government revenue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On 24 July 2025, six days after the listing, SAP services were suspended.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nayara challenged the suspension before the Delhi High Court.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On 21 September 2026, Justice Vikas Mahajan delivered the detailed interim judgment on the interlocutory application.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Court directed Defendant No. 1, SAP India, to restore the status quo ante as it existed prior to 24 July 2025 by immediately resuming enterprise and software support under the respective agreements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Court also made clear that its observations were prima facie and would not bind the trial.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The suit was listed for 30 September 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That procedural qualification is extremely important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is not a final declaration that EU sanctions are invalid in India.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also Read: <a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/foreign-company-vs-indian-company-where-should-you-sue\/\" target=\"_blank\" rel=\"noopener\">Foreign Company vs Indian Company: Where Should You Sue? | India Litigation Guide<\/a><\/p>\n\n\n\n<h2 id=\"h-2-what-the-delhi-high-court-actually-decided\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_What_the_Delhi_High_Court_Actually_Decided\"><\/span>2. What the Delhi High Court Actually Decided<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">It would be inaccurate to reduce the case to the headline:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cDelhi High Court says foreign sanctions cannot override Indian law.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The judgment is more nuanced.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Court considered, among other things:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>governing-law clauses;<\/li>\n\n\n\n<li>jurisdiction;<\/li>\n\n\n\n<li>the contractual force majeure provisions;<\/li>\n\n\n\n<li>Sections 32 and 56 of the Indian Contract Act, 1872;<\/li>\n\n\n\n<li>proof of foreign law;<\/li>\n\n\n\n<li>EU sanctions;<\/li>\n\n\n\n<li>German foreign-trade law relied upon by SAP;<\/li>\n\n\n\n<li>the distinction between SAP India and SAP SE;<\/li>\n\n\n\n<li>the territorial provisions of the contracts;<\/li>\n\n\n\n<li>the possibility of alternative performance;<\/li>\n\n\n\n<li>and the requirements for interim mandatory relief.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">SAP relied upon Regulation (EU) No. 269\/2014 and German foreign trade law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The court treated both as foreign law requiring proof and held that the material placed before it was not adequate at the interlocutory stage to establish the asserted foreign-law consequences.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Court was therefore not prepared to accept the foreign-law defence as sufficient, on that record, to establish contingent voidness under Section 32 or subsequent impossibility\/illegality under Section 56.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This does not mean that such a defense can never succeed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It means that the defense has to be properly established.<\/p>\n\n\n\n<h2 id=\"h-3-the-eu-sanctions-listing-what-exactly-happened\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_The_EU_Sanctions_Listing_What_Exactly_Happened\"><\/span>3. The EU Sanctions Listing: What Exactly Happened?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Nayara Energy was added to Annex I of Council Regulation (EU) No. 269\/2014 through Council Implementing Regulation (EU) 2025\/1476 dated 18 July 2025.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The official listing identified Nayara as item 639 and referred to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>its Vadinar refinery;<\/li>\n\n\n\n<li>Rosneft&#8217;s 49% ownership;<\/li>\n\n\n\n<li>its processing of Russian crude;<\/li>\n\n\n\n<li>and the role of the relevant economic sector in providing revenue to the Russian Federation.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The legal consequences of Annex I designation include the asset-freezing and \u201cmaking available\u201d restrictions contained in Article 2 of Regulation 269\/2014.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But an important distinction must immediately be made.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Listing is not the same as proving that every commercial service is prohibited.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The lawyer must ask:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What precisely does Article 2 prohibit?<\/li>\n\n\n\n<li>Does the relevant service constitute the provision of prohibited funds or economic resources?<\/li>\n\n\n\n<li>Which entity is performing the service?<\/li>\n\n\n\n<li>Is that entity within the personal or territorial scope of the regulation?<\/li>\n\n\n\n<li>Does the transaction occur within EU territory or otherwise fall within the regulation&#8217;s scope?<\/li>\n\n\n\n<li>Is an EU parent involved?<\/li>\n\n\n\n<li>Is there a license, derogation, or exemption?<\/li>\n\n\n\n<li>Is there another lawful means of performance?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The listing is therefore only the beginning of the analysis.<\/p>\n\n\n\n<h2 id=\"h-4-the-eu-regulation-and-the-indian-contract-are-two-different-legal-questions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_The_EU_Regulation_and_the_Indian_Contract_Are_Two_Different_Legal_Questions\"><\/span>4. The EU Regulation and the Indian Contract Are Two Different Legal Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This distinction lies at the heart of the case.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The first question is<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Legal Question<\/th><th>Question<\/th><\/tr><\/thead><tbody><tr><td>What does EU law prohibit?<\/td><td>What does EU law prohibit?<\/td><\/tr><tr><td>What contractual consequence follows under Indian law?<\/td><td>What contractual consequence follows under Indian law?<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Those questions cannot simply be merged.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose EU law imposes an obligation upon a German company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That does not automatically answer whether an Indian subsidiary is prohibited under Indian law from performing an Indian contract.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Conversely, an Indian governing-law clause does not mean a German company can disregard a mandatory German or EU prohibition applicable to it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The lawyer must therefore map the two legal systems separately and then determine their interaction.<\/p>\n\n\n\n<h2 id=\"h-5-the-contractual-governing-law-was-crucial\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_The_Contractual_Governing_Law_Was_Crucial\"><\/span>5. The Contractual Governing Law Was Crucial<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The contracts in the Nayara litigation contained significant governing-law provisions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The relevant general terms provided for Indian law and contained an express mechanism addressing conflict with foreign rules, together with Delhi jurisdiction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That drafting was important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The contractual arrangement effectively told the Indian court how the parties had allocated the governing law of their contractual relationship.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But there is a crucial limitation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A governing-law clause does not repeal foreign regulatory law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If German law prohibits a German company from undertaking a particular act, an Indian contract cannot simply make that German prohibition disappear.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The question is instead whether:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The German rule actually applies<\/li>\n\n\n\n<li>The relevant entity is subject to it<\/li>\n\n\n\n<li>The act is prohibited<\/li>\n\n\n\n<li>The Indian subsidiary itself must perform that act<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">and the contractual consequences are recognized under the governing law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is a much more sophisticated conflict-of-laws analysis than simply asking which country has \u201cbetter\u201d law.<\/p>\n\n\n\n<h2 id=\"h-6-foreign-law-must-be-properly-proved\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Foreign_Law_Must_Be_Properly_Proved\"><\/span>6. Foreign Law Must Be Properly Proved<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most important aspects of the judgment concerns proof of foreign law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A foreign company cannot ordinarily establish a defense in an Indian court merely by asserting:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cOur foreign lawyers say that sanctions prohibit us.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The court may need evidence concerning:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the foreign statute or regulation;<\/li>\n\n\n\n<li>its interpretation;<\/li>\n\n\n\n<li>its territorial scope;<\/li>\n\n\n\n<li>its personal scope;<\/li>\n\n\n\n<li>applicable regulatory guidance;<\/li>\n\n\n\n<li>exemptions;<\/li>\n\n\n\n<li>licensing provisions;<\/li>\n\n\n\n<li>relevant foreign decisions;<\/li>\n\n\n\n<li>and expert interpretation.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The Supreme Court&#8217;s decision in Hari Shanker Jain v. Sonia Gandhi (2001) 8 SCC 233 is relevant to the proposition that foreign law is a question of fact requiring proof rather than something an Indian court simply assumes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That principle now needs to be read alongside Section 39 of the Bharatiya Sakshya Adhiniyam, 2023, concerning opinions on foreign law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This has an important litigation consequence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If foreign law is going to be the foundation of the defense, foreign law must be treated as evidence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An expert should ideally be properly qualified, the underlying legal materials should be placed before the court, the opinion should be properly proved, and, where necessary, the expert should be available for cross-examination.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Nayara\u2013SAP interim record illustrates why this matters.<\/p>\n\n\n\n<h2 id=\"h-7-sap-india-and-sap-se-are-not-automatically-the-same-legal-person\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_SAP_India_and_SAP_SE_Are_Not_Automatically_the_Same_Legal_Person\"><\/span>7. SAP India and SAP SE Are Not Automatically the Same Legal Person<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is another central issue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SAP India is an Indian company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SAP SE is the German parent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A multinational group may operate commercially as one integrated enterprise, but separate legal personality remains fundamental.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SAP SE&#8217;s regulatory exposure does not automatically establish SAP India&#8217;s contractual inability to perform.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The court may have to ask:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Who signed the contract?<\/li>\n\n\n\n<li>Who received the money?<\/li>\n\n\n\n<li>Who promised to provide support?<\/li>\n\n\n\n<li>Who owns the relevant intellectual property?<\/li>\n\n\n\n<li>Who controls the licence?<\/li>\n\n\n\n<li>Where is technical support actually performed?<\/li>\n\n\n\n<li>Is the parent contractually indispensable?<\/li>\n\n\n\n<li>Can the Indian subsidiary use another affiliate?<\/li>\n\n\n\n<li>Can the service be provided from another location?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This does not mean the parent company&#8217;s sanctions exposure is irrelevant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It means that the legal connection must be demonstrated.<\/p>\n\n\n\n<h2 id=\"h-8-worldwide-does-not-mean-every-contract-had-the-same-territorial-scope\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_%E2%80%9CWorldwide%E2%80%9D_Does_Not_Mean_Every_Contract_Had_the_Same_Territorial_Scope\"><\/span>8. \u201cWorldwide\u201d Does Not Mean Every Contract Had the Same Territorial Scope<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The contractual architecture needs to be read carefully.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Certain Order Forms described the territory as worldwide, subject to applicable export-control laws.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the SAP Delivered Support Agreement concerned support in India and contained its own contractual mechanisms, including a broader sanctions\/export-control provision.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Delhi High Court treated the Delivered Support Agreement as a separate contractual arrangement rather than as a master provision automatically controlling every aspect of the entire relationship.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is an important drafting lesson.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A court will not necessarily treat several related agreements as one undifferentiated contract simply because they concern the same software ecosystem.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Every:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Order Form;<\/li>\n\n\n\n<li>General Terms;<\/li>\n\n\n\n<li>Support Agreement;<\/li>\n\n\n\n<li>Licence;<\/li>\n\n\n\n<li>Work Order;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">must be examined separately and then read together according to their contractual hierarchy.<\/p>\n\n\n\n<h2 id=\"h-9-section-32-start-with-the-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_Section_32_Start_With_the_Contract\"><\/span>9. Section 32: Start With the Contract<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Section 32 of the Indian Contract Act deals with contingent contracts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It becomes particularly important where the parties themselves have anticipated a future event.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">International commercial contracts commonly contain provisions relating to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>sanctions;<\/li>\n\n\n\n<li>export controls;<\/li>\n\n\n\n<li>government restrictions;<\/li>\n\n\n\n<li>embargoes;<\/li>\n\n\n\n<li>licences;<\/li>\n\n\n\n<li>force majeure;<\/li>\n\n\n\n<li>changes in law.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If the parties have agreed what happens when sanctions arise, the court must first interpret that contractual allocation of risk.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Supreme Court&#8217;s judgment in Energy Watchdog v. CERC, (2017) 14 SCC 80, remains a central authority.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where the contract contains an applicable force-majeure mechanism, the court must begin with the contractual mechanism rather than immediately invoking the general doctrine of frustration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is why sanctions clauses deserve careful drafting.<\/p>\n\n\n\n<h2 id=\"h-10-section-56-is-performance-really-impossible-or-unlawful\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_Section_56_Is_Performance_Really_Impossible_or_Unlawful\"><\/span>10. Section 56: Is Performance Really Impossible or Unlawful?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Section 56 deals with agreements that become impossible or unlawful after formation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But Indian law does not treat every difficulty as frustration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Supreme Court has repeatedly distinguished:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>difficulty from impossibility;<\/li>\n\n\n\n<li>expense from impossibility;<\/li>\n\n\n\n<li>commercial hardship from frustration;<\/li>\n\n\n\n<li>and<\/li>\n\n\n\n<li>reduced profitability from legal impossibility.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In Satyabrata Ghose v. Mugneeram Bangur &amp; Co., AIR 1954 SC 44, the Supreme Court explained that \u201cimpossibility\u201d is not confined to literal physical impossibility, but the supervening event must fundamentally affect the contractual obligation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Alopi Parshad &amp; Sons Ltd. v. Union of India, AIR 1960 SC 588, the Court emphasised that unexpected expense or increased costs do not ordinarily discharge a party from its contractual obligation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Energy Watchdog, the Supreme Court again emphasised the distinction between commercial hardship and frustration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, the statement:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt has become more expensive to perform\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">does not ordinarily answer the Section 56 question.<\/p>\n\n\n\n<h2 id=\"h-11-the-nafed-contrast-indian-prohibition-versus-foreign-prohibition\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11_The_NAFED_Contrast_Indian_Prohibition_Versus_Foreign_Prohibition\"><\/span>11. The NAFED Contrast: Indian Prohibition Versus Foreign Prohibition<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An especially useful comparison is National Agricultural Cooperative Marketing Federation of India Ltd. v. Alimenta S.A., (2020) 19 SCC 83.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There, an Indian governmental restriction affecting exports was central to the contractual impossibility analysis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is materially different from a case in which a foreign regulation is asserted but:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>its application is disputed;<\/li>\n\n\n\n<li>its territorial reach is uncertain;<\/li>\n\n\n\n<li>its legal effect is contested;<\/li>\n\n\n\n<li>and the foreign law has not been properly proved.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The distinction is important:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A proved Indian legal prohibition and an unproved foreign regulatory prohibition are not the same Section 56 case.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That does not mean a foreign prohibition can never constitute frustration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It means its legal status and application must first be established.<\/p>\n\n\n\n<h2 id=\"h-12-commercial-onerousness-is-not-automatically-legal-impossibility\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12_Commercial_Onerousness_Is_Not_Automatically_Legal_Impossibility\"><\/span>12. Commercial Onerousness Is Not Automatically Legal Impossibility<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This issue is particularly important in multinational technology contracts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose the foreign parent says:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cOur German infrastructure can no longer support the Indian customer.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The next question is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cCan the Indian subsidiary lawfully provide the service through another arrangement?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps it could use:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an Indian server;<\/li>\n\n\n\n<li>another affiliate;<\/li>\n\n\n\n<li>a different service centre;<\/li>\n\n\n\n<li>a third-party provider;<\/li>\n\n\n\n<li>another authentication system;<\/li>\n\n\n\n<li>or another lawful technical architecture.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If a lawful alternative exists, the argument of absolute impossibility becomes more difficult.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is consistent with the Supreme Court&#8217;s approach in Energy Watchdog.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Delhi High Court&#8217;s reasoning in Nayara reflects this distinction between commercial onerousness and legal impossibility.<\/p>\n\n\n\n<h2 id=\"h-13-force-majeure-does-not-automatically-mean-termination\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13_Force_Majeure_Does_Not_Automatically_Mean_Termination\"><\/span>13. Force Majeure Does Not Automatically Mean Termination<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is one of the most common contractual misunderstandings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A force-majeure clause may provide:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>additional time;<\/li>\n\n\n\n<li>temporary suspension;<\/li>\n\n\n\n<li>excuse from delay;<\/li>\n\n\n\n<li>mitigation;<\/li>\n\n\n\n<li>renegotiation.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It does not necessarily provide:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>permanent discharge;<\/li>\n\n\n\n<li>unilateral termination;<\/li>\n\n\n\n<li>cancellation of all services.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In the Nayara\u2013SAP dispute, the relevant force-majeure provisions were treated as mechanisms for extending time rather than as automatic provisions for terminating or discharging the contractual relationship.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is an important drafting lesson.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If a supplier wants sanctions to create a termination right, the contract should say so clearly.<\/p>\n\n\n\n<h2 id=\"h-14-the-work-order-and-the-underlying-contract-are-not-the-same-thing\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14_The_Work_Order_and_the_Underlying_Contract_Are_Not_the_Same_Thing\"><\/span>14. The Work Order and the Underlying Contract Are Not the Same Thing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Another useful point emerging from the case concerns the distinction between an individual work order and the underlying contractual framework.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The relevant support work order ran to 31 December 2025 and advance payment had been made.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The expiry of that particular work order did not automatically make the interim application infructuous because the work order was not necessarily the entire contractual relationship.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is a reminder that lawyers should identify the hierarchy of documents:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Master Agreement \u2192 General Terms \u2192 Licence \u2192 Order Form \u2192 Support Agreement \u2192 Work Order<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">and determine precisely which document creates which obligation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A dispute over one work order should not automatically be treated as a dispute over the existence of the entire contractual relationship.<\/p>\n\n\n\n<h2 id=\"h-15-eu-regulation-269-2014-must-not-be-confused-with-regulation-833-2014\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"15_EU_Regulation_2692014_Must_Not_Be_Confused_With_Regulation_8332014\"><\/span>15. EU Regulation 269\/2014 Must Not Be Confused With Regulation 833\/2014<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Sophisticated sanctions analysis requires another distinction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Nayara listing under Regulation 269\/2014 involves the restrictive-measures framework applicable to designated persons.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That should not simply be collapsed into the separate sectoral Russia sanctions architecture under Regulation 833\/2014.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, Article 8a of Regulation 833\/2014 contains provisions concerning EU operators&#8217; best efforts in relation to certain non-EU entities they own or control.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is a different regulatory mechanism from the Annex I asset-freeze framework under Regulation 269\/2014.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, an article should never simply say:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cEU sanctions prohibit the transaction.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The precise regulation and precise provision must be identified.<\/p>\n\n\n\n<h2 id=\"h-16-what-does-article-2-of-regulation-269-2014-actually-mean-for-a-service-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"16_What_Does_Article_2_of_Regulation_2692014_Actually_Mean_for_a_Service_Contract\"><\/span>16. What Does Article 2 of Regulation 269\/2014 Actually Mean for a Service Contract?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Article 2 concerns freezing funds and economic resources belonging to, owned, held or controlled by listed persons and restrictions on making funds or economic resources available to them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The question then becomes:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Does providing a particular software or support service amount to making prohibited economic resources available?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That cannot be answered merely by looking at the customer&#8217;s name on the sanctions list.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The court may have to determine:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the nature of the service;<\/li>\n\n\n\n<li>its economic character;<\/li>\n\n\n\n<li>who provides it;<\/li>\n\n\n\n<li>who receives it;<\/li>\n\n\n\n<li>whether the service falls within the regulation;<\/li>\n\n\n\n<li>whether it is direct or indirect;<\/li>\n\n\n\n<li>and whether the person performing the service is within the regulation&#8217;s scope.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">That is why sanctions litigation requires specialists in both foreign sanctions law and contract law.<\/p>\n\n\n\n<h2 id=\"h-17-us-sanctions-present-a-different-legal-architecture\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"17_US_Sanctions_Present_a_Different_Legal_Architecture\"><\/span>17. US Sanctions Present a Different Legal Architecture<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Nayara\u2013SAP litigation concerns EU sanctions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">US sanctions should therefore be analysed separately.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For a US person, questions may include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>whether the Indian company is an SDN;<\/li>\n\n\n\n<li>whether the 50 Percent Rule applies;<\/li>\n\n\n\n<li>whether the transaction is prohibited;<\/li>\n\n\n\n<li>whether OFAC has issued a licence;<\/li>\n\n\n\n<li>whether US-origin goods or technology are involved;<\/li>\n\n\n\n<li>whether a US financial nexus exists;<\/li>\n\n\n\n<li>whether facilitation is involved.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For non-US companies, additional questions may concern:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>secondary sanctions;<\/li>\n\n\n\n<li>US-origin technology;<\/li>\n\n\n\n<li>export-control restrictions;<\/li>\n\n\n\n<li>dealings involving US persons;<\/li>\n\n\n\n<li>financial-system exposure.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The crucial distinction is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A regulatory risk is not automatically the same thing as a direct legal prohibition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nor is an internal compliance policy necessarily identical to a contractual termination right.<\/p>\n\n\n\n<h2 id=\"h-18-foreign-sanctions-regulatory-risk-and-corporate-policy-are-different-things\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"18_Foreign_Sanctions_Regulatory_Risk_and_Corporate_Policy_Are_Different_Things\"><\/span>18. Foreign Sanctions, Regulatory Risk and Corporate Policy Are Different Things<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Consider five different statements:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Statement<\/th><th>Text<\/th><\/tr><\/thead><tbody><tr><th>Statement 1<\/th><td>\u201cThe law prohibits this transaction.\u201d<\/td><\/tr><tr><th>Statement 2<\/th><td>\u201cA licence may be required.\u201d<\/td><\/tr><tr><th>Statement 3<\/th><td>\u201cPerforming this transaction creates regulatory risk.\u201d<\/td><\/tr><tr><th>Statement 4<\/th><td>\u201cOur bank may refuse to process the payment.\u201d<\/td><\/tr><tr><th>Statement 5<\/th><td>\u201cOur group compliance policy prohibits the transaction.\u201d<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">These may have very different legal consequences.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A court must identify which of these situations actually exists.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A foreign company&#8217;s internal policy may be commercially understandable, but the contractual question remains:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Did the contract give the company a right to suspend or terminate on that basis?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That distinction can become decisive.<\/p>\n\n\n\n<h2 id=\"h-19-cloud-saas-and-enterprise-software-create-a-new-category-of-contractual-risk\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"19_Cloud_SaaS_and_Enterprise_Software_Create_a_New_Category_of_Contractual_Risk\"><\/span>19. Cloud, SaaS and Enterprise Software Create a New Category of Contractual Risk<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The importance of Nayara\u2013SAP extends far beyond the petroleum industry.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Modern Indian companies increasingly depend upon foreign-controlled:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ERP systems;<\/li>\n\n\n\n<li>cloud infrastructure;<\/li>\n\n\n\n<li>cybersecurity platforms;<\/li>\n\n\n\n<li>email;<\/li>\n\n\n\n<li>databases;<\/li>\n\n\n\n<li>payroll systems;<\/li>\n\n\n\n<li>accounting software;<\/li>\n\n\n\n<li>AI services;<\/li>\n\n\n\n<li>industrial software;<\/li>\n\n\n\n<li>supply-chain systems;<\/li>\n\n\n\n<li>software updates;<\/li>\n\n\n\n<li>authentication systems.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A service suspension can happen within minutes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The physical business may remain in India, but the digital infrastructure supporting it may be controlled by companies subject to foreign regulatory regimes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This creates what may be called digital sanctions dependency.<\/p>\n\n\n\n<h2 id=\"h-20-the-microsoft-episode-important-operationally-not-a-sanctions-holding\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"20_The_Microsoft_Episode_Important_Operationally_Not_a_Sanctions_Holding\"><\/span>20. The Microsoft Episode: Important Operationally, Not a Sanctions Holding<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Nayara dispute also had a separate episode involving Microsoft services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nayara approached the Delhi High Court after Microsoft services were interrupted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Services were subsequently restored and the proceedings were disposed of.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But it would be incorrect to describe that as a judicial determination that US sanctions could not be applied to Nayara.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There was no equivalent merits judgment deciding that proposition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The episode is nevertheless commercially important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It demonstrates how quickly a sanctions-related dispute involving a foreign technology provider can become an operational crisis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For an enterprise dependent upon:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>email;<\/li>\n\n\n\n<li>cloud;<\/li>\n\n\n\n<li>identity management;<\/li>\n\n\n\n<li>authentication;<\/li>\n\n\n\n<li>software updates;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">even a short interruption can have consequences far beyond the nominal value of the technology contract.<\/p>\n\n\n\n<h2 id=\"h-21-the-ten-step-foreign-sanctions-vs-indian-law-test\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"21_The_Ten-Step_%E2%80%9CForeign_Sanctions_vs_Indian_Law%E2%80%9D_Test\"><\/span>21. The Ten-Step \u201cForeign Sanctions vs Indian Law\u201d Test<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">For future disputes, I would recommend the following framework.<\/p>\n\n\n\n<h3 id=\"h-step-1-is-there-an-actual-sanctions-measure\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_1_%E2%80%94_Is_There_an_Actual_Sanctions_Measure\"><\/span>Step 1 \u2014 Is There an Actual Sanctions Measure?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Identify the exact:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>regulation;<\/li>\n\n\n\n<li>decision;<\/li>\n\n\n\n<li>designation;<\/li>\n\n\n\n<li>listing;<\/li>\n\n\n\n<li>amendment;<\/li>\n\n\n\n<li>licence.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-2-does-it-apply-to-this-actor\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_2_%E2%80%94_Does_It_Apply_to_This_Actor\"><\/span>Step 2 \u2014 Does It Apply to This Actor?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Determine whether the relevant party is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an EU person;<\/li>\n\n\n\n<li>a US person;<\/li>\n\n\n\n<li>an Indian company;<\/li>\n\n\n\n<li>a subsidiary;<\/li>\n\n\n\n<li>an affiliate;<\/li>\n\n\n\n<li>or acting through another entity.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-3-does-it-cover-this-transaction\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_3_%E2%80%94_Does_It_Cover_This_Transaction\"><\/span>Step 3 \u2014 Does It Cover This Transaction?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Determine whether the prohibition concerns:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>funds;<\/li>\n\n\n\n<li>economic resources;<\/li>\n\n\n\n<li>goods;<\/li>\n\n\n\n<li>services;<\/li>\n\n\n\n<li>technology;<\/li>\n\n\n\n<li>exports;<\/li>\n\n\n\n<li>financing;<\/li>\n\n\n\n<li>investment.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-4-does-it-actually-prohibit-performance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_4_%E2%80%94_Does_It_Actually_Prohibit_Performance\"><\/span>Step 4 \u2014 Does It Actually Prohibit Performance?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Distinguish a legal prohibition from:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a licensing requirement;<\/li>\n\n\n\n<li>regulatory uncertainty;<\/li>\n\n\n\n<li>commercial risk;<\/li>\n\n\n\n<li>internal compliance policy.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-5-who-made-the-contractual-promise\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_5_%E2%80%94_Who_Made_the_Contractual_Promise\"><\/span>Step 5 \u2014 Who Made the Contractual Promise?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Was the obligation undertaken by:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the foreign parent;<\/li>\n\n\n\n<li>the Indian subsidiary;<\/li>\n\n\n\n<li>a distributor;<\/li>\n\n\n\n<li>a partner?<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-6-does-the-contract-incorporate-the-foreign-restriction\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_6_%E2%80%94_Does_the_Contract_Incorporate_the_Foreign_Restriction\"><\/span>Step 6 \u2014 Does the Contract Incorporate the Foreign Restriction?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Examine:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>sanctions clauses;<\/li>\n\n\n\n<li>export-control provisions;<\/li>\n\n\n\n<li>force majeure;<\/li>\n\n\n\n<li>applicable-law provisions;<\/li>\n\n\n\n<li>parent-company obligations.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-7-what-remedy-does-the-contract-provide\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_7_%E2%80%94_What_Remedy_Does_the_Contract_Provide\"><\/span>Step 7 \u2014 What Remedy Does the Contract Provide?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Does the clause allow:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>delay;<\/li>\n\n\n\n<li>suspension;<\/li>\n\n\n\n<li>alternative performance;<\/li>\n\n\n\n<li>termination?<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-step-8-is-alternative-lawful-performance-possible\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_8_%E2%80%94_Is_Alternative_Lawful_Performance_Possible\"><\/span>Step 8 \u2014 Is Alternative Lawful Performance Possible?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Can another entity, server, jurisdiction or architecture perform the obligation?<\/p>\n\n\n\n<h3 id=\"h-step-9-has-the-foreign-law-been-properly-proved\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_9_%E2%80%94_Has_the_Foreign_Law_Been_Properly_Proved\"><\/span>Step 9 \u2014 Has the Foreign Law Been Properly Proved?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This can be decisive before an Indian court.<\/p>\n\n\n\n<h3 id=\"h-step-10-what-does-indian-law-provide\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_10_%E2%80%94_What_Does_Indian_Law_Provide\"><\/span>Step 10 \u2014 What Does Indian Law Provide?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Only then examine:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Section 32;<\/li>\n\n\n\n<li>Section 37;<\/li>\n\n\n\n<li>Section 56;<\/li>\n\n\n\n<li>Section 73;<\/li>\n\n\n\n<li>specific relief;<\/li>\n\n\n\n<li>injunction;<\/li>\n\n\n\n<li>arbitration.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This is the Foreign Sanctions vs Indian Law test that businesses can actually use.<\/p>\n\n\n\n<h2 id=\"h-22-what-makes-the-indian-company-s-case-stronger\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"22_What_Makes_the_Indian_Companys_Case_Stronger\"><\/span>22. What Makes the Indian Company&#8217;s Case Stronger?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An Indian company may have a stronger contractual case where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Indian law governs;<\/li>\n\n\n\n<li>Indian courts have jurisdiction;<\/li>\n\n\n\n<li>the Indian subsidiary is the contracting party;<\/li>\n\n\n\n<li>the foreign parent is not the contracting party;<\/li>\n\n\n\n<li>the foreign sanctions rule does not clearly bind the Indian subsidiary;<\/li>\n\n\n\n<li>the foreign law has not been properly proved;<\/li>\n\n\n\n<li>the contract does not expressly permit suspension;<\/li>\n\n\n\n<li>force majeure only extends time;<\/li>\n\n\n\n<li>alternative performance is possible;<\/li>\n\n\n\n<li>immediate suspension causes serious operational harm.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These are not automatic grounds for success.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They are factors that require careful legal analysis.<\/p>\n\n\n\n<h2 id=\"h-23-what-makes-the-foreign-company-s-defence-stronger\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"23_What_Makes_the_Foreign_Companys_Defence_Stronger\"><\/span>23. What Makes the Foreign Company&#8217;s Defence Stronger?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Conversely, a foreign company may have a stronger defence where it can establish:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a genuine sanctions prohibition;<\/li>\n\n\n\n<li>application to the relevant entity;<\/li>\n\n\n\n<li>application to the particular transaction;<\/li>\n\n\n\n<li>a contractual clause allocating the sanctions risk;<\/li>\n\n\n\n<li>absence of a lawful alternative;<\/li>\n\n\n\n<li>proper evidence of foreign law;<\/li>\n\n\n\n<li>and a contractual right to suspend or terminate.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">That is materially different from simply asserting:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">\u201cOur global compliance department has decided not to serve this customer.\u201d<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">The legal foundation matters.<\/p>\n\n\n\n<h2 id=\"h-24-what-should-indian-companies-put-into-their-contracts\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"24_What_Should_Indian_Companies_Put_Into_Their_Contracts\"><\/span>24. What Should Indian Companies Put Into Their Contracts?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Indian companies purchasing critical foreign technology should consider negotiating specific provisions concerning:<\/p>\n\n\n\n<h3 id=\"h-sanctions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sanctions\"><\/span>Sanctions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Define precisely which sanctions regimes are relevant.<\/p>\n\n\n\n<h3 id=\"h-parent-company-dependence\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Parent-Company_Dependence\"><\/span>Parent-Company Dependence<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">State whether the foreign parent is essential to performance.<\/p>\n\n\n\n<h3 id=\"h-alternative-performance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Alternative_Performance\"><\/span>Alternative Performance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Require reasonable efforts to provide lawful alternatives.<\/p>\n\n\n\n<h3 id=\"h-suspension\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Suspension\"><\/span>Suspension<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Specify when suspension is permitted and how much of the service may be suspended.<\/p>\n\n\n\n<h3 id=\"h-notice\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Notice\"><\/span>Notice<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Require prompt identification of the legal basis.<\/p>\n\n\n\n<h3 id=\"h-licensing\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Licensing\"><\/span>Licensing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Require reasonable efforts to obtain available licences or exemptions.<\/p>\n\n\n\n<h3 id=\"h-data-access\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Data_Access\"><\/span>Data Access<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Ensure continuing access to customer data wherever legally possible.<\/p>\n\n\n\n<h3 id=\"h-transition-assistance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Transition_Assistance\"><\/span>Transition Assistance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Provide for migration to another provider.<\/p>\n\n\n\n<h3 id=\"h-business-continuity\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Business_Continuity\"><\/span>Business Continuity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Require reasonable continuity mechanisms for critical systems.<\/p>\n\n\n\n<h3 id=\"h-emergency-relief\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Emergency_Relief\"><\/span>Emergency Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Preserve the right to seek urgent judicial or arbitral relief.<\/p>\n\n\n\n<h2 id=\"h-25-what-should-a-foreign-technology-vendor-do\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"25_What_Should_a_Foreign_Technology_Vendor_Do\"><\/span>25. What Should a Foreign Technology Vendor Do?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A foreign company intending to rely on sanctions should similarly ensure that its contracts address:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>applicable sanctions;<\/li>\n\n\n\n<li>parent-company obligations;<\/li>\n\n\n\n<li>export-control restrictions;<\/li>\n\n\n\n<li>regulatory licences;<\/li>\n\n\n\n<li>suspension rights;<\/li>\n\n\n\n<li>termination rights;<\/li>\n\n\n\n<li>notice;<\/li>\n\n\n\n<li>mitigation;<\/li>\n\n\n\n<li>alternative performance;<\/li>\n\n\n\n<li>data access;<\/li>\n\n\n\n<li>refunds;<\/li>\n\n\n\n<li>transition.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The contractual language should reflect the actual regulatory risk.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A generic \u201ccompliance with applicable law\u201d clause may not be enough.<\/p>\n\n\n\n<h2 id=\"h-26-a-modern-sanctions-clause-should-distinguish-suspension-from-termination\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"26_A_Modern_Sanctions_Clause_Should_Distinguish_Suspension_From_Termination\"><\/span>26. A Modern Sanctions Clause Should Distinguish Suspension From Termination<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A sophisticated contractual mechanism might conceptually provide:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Where a mandatory sanctions or export-control law actually applicable to the performing party prohibits a specific contractual obligation, the affected party may suspend that obligation only to the minimum extent and for the minimum period required by that law, subject to prompt notice and identification of the relevant restriction to the extent legally permissible. The affected party shall use reasonable efforts to obtain any available licence or exemption and shall use reasonable efforts to provide an alternative lawful means of performance. Suspension shall not automatically constitute termination unless the prohibition is reasonably expected to continue beyond the agreed period.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">This is a drafting concept rather than a universal model clause.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The final clause should be tailored to the:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>governing law;<\/li>\n\n\n\n<li>sanctions regime;<\/li>\n\n\n\n<li>corporate structure;<\/li>\n\n\n\n<li>technology;<\/li>\n\n\n\n<li>industry;<\/li>\n\n\n\n<li>jurisdiction;<\/li>\n\n\n\n<li>and commercial relationship.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"h-27-can-an-indian-court-order-performance-that-may-expose-a-foreign-parent-to-liability\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"27_Can_an_Indian_Court_Order_Performance_That_May_Expose_a_Foreign_Parent_to_Liability\"><\/span>27. Can an Indian Court Order Performance That May Expose a Foreign Parent to Liability?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is likely to become one of the most difficult questions in future cross-border litigation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consider:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Contractual Structure<\/th><\/tr><\/thead><tbody><tr><td>Indian customer \u2192 Indian subsidiary \u2192 foreign parent<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The Indian court may determine that the Indian subsidiary remains contractually bound.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The foreign parent may simultaneously argue that its participation would violate foreign law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The court may then have to consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>who is actually being ordered;<\/li>\n\n\n\n<li>what performance is required;<\/li>\n\n\n\n<li>whether the parent must participate;<\/li>\n\n\n\n<li>whether the parent is actually prohibited;<\/li>\n\n\n\n<li>whether alternative performance exists;<\/li>\n\n\n\n<li>whether the foreign law has been properly proved;<\/li>\n\n\n\n<li>and whether the relief can be structured without compelling conduct that is unlawful for the foreign entity.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The Nayara interim judgment does not finally resolve this broader conflict.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It illustrates why future cases could become considerably more complex.<\/p>\n\n\n\n<h2 id=\"h-28-what-the-nayara-sap-interim-judgment-does-not-decide\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"28_What_the_Nayara%E2%80%93SAP_Interim_Judgment_Does_Not_Decide\"><\/span>28. What the Nayara\u2013SAP Interim Judgment Does Not Decide<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The judgment does not establish that:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>EU sanctions are invalid in India;<\/li>\n\n\n\n<li>US sanctions are irrelevant;<\/li>\n\n\n\n<li>foreign companies can never suspend services;<\/li>\n\n\n\n<li>foreign sanctions can never frustrate an Indian contract;<\/li>\n\n\n\n<li>multinational parents have no foreign regulatory obligations;<\/li>\n\n\n\n<li>Indian subsidiaries are immune from foreign regulatory consequences;<\/li>\n\n\n\n<li>or Indian courts can always compel performance.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Instead, the Court dealt with the particular contractual and evidentiary record before it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That distinction is essential.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A future case involving:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a different sanctions regulation;<\/li>\n\n\n\n<li>a different foreign jurisdiction;<\/li>\n\n\n\n<li>a US person;<\/li>\n\n\n\n<li>an SDN designation;<\/li>\n\n\n\n<li>a different contract;<\/li>\n\n\n\n<li>an express sanctions termination clause;<\/li>\n\n\n\n<li>or a genuinely impossible parent-dependent performance structure<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">could produce a very different legal analysis.<\/p>\n\n\n\n<h2 id=\"h-29-questions-indian-courts-may-eventually-have-to-answer\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"29_Questions_Indian_Courts_May_Eventually_Have_to_Answer\"><\/span>29. Questions Indian Courts May Eventually Have to Answer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The development of sanctions-related commercial litigation may eventually require authoritative answers to questions such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Can a properly proved foreign sanctions prohibition constitute frustration under Section 56?<\/li>\n\n\n\n<li>How should foreign sanctions law be proved under the Bharatiya Sakshya Adhiniyam, 2023?<\/li>\n\n\n\n<li>When does an EU or US sanctions regime bind an Indian subsidiary?<\/li>\n\n\n\n<li>Can a foreign parent&#8217;s regulatory exposure justify the Indian subsidiary&#8217;s non-performance?<\/li>\n\n\n\n<li>Can parties contractually allocate the risk of foreign sanctions?<\/li>\n\n\n\n<li>What happens where Indian contract law requires performance but foreign law prohibits the parent from participating?<\/li>\n\n\n\n<li>When does alternative performance defeat a frustration defence?<\/li>\n\n\n\n<li>How should courts determine the \u201cplace\u201d of performance for cloud and SaaS contracts?<\/li>\n\n\n\n<li>Can an Indian court grant an injunction where the foreign parent claims that participation would expose it to foreign sanctions?<\/li>\n\n\n\n<li>What role should public policy play where Indian contractual rights collide with foreign regulatory prohibitions?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These questions remain substantially underdeveloped in Indian sanctions jurisprudence.<\/p>\n\n\n\n<h2 id=\"h-30-a-critical-distinction-indian-law-does-not-make-a-business-immune-from-foreign-sanctions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"30_A_Critical_Distinction_Indian_Law_Does_Not_Make_a_Business_Immune_From_Foreign_Sanctions\"><\/span>30. A Critical Distinction: Indian Law Does Not Make a Business Immune From Foreign Sanctions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is a danger in over-reading the Nayara decision.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An Indian company should not conclude:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">\u201cBecause my contract is governed by Indian law, foreign sanctions cannot affect me.\u201d<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">That is not correct.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A company may still experience:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>banking restrictions;<\/li>\n\n\n\n<li>technology restrictions;<\/li>\n\n\n\n<li>export-control consequences;<\/li>\n\n\n\n<li>foreign supplier refusal;<\/li>\n\n\n\n<li>payment difficulties;<\/li>\n\n\n\n<li>regulatory restrictions on counterparties;<\/li>\n\n\n\n<li>disruption of global supply chains.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly, a foreign company should not conclude:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">\u201cBecause our parent is subject to foreign sanctions, our Indian subsidiary automatically has a right to terminate.\u201d<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">That is equally unsafe.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The correct approach is contractual and jurisdictional analysis.<\/p>\n\n\n\n<h2 id=\"h-31-the-broader-corporate-lesson-foreign-regulatory-dependency\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"31_The_Broader_Corporate_Lesson_Foreign_Regulatory_Dependency\"><\/span>31. The Broader Corporate Lesson: Foreign Regulatory Dependency<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Nayara\u2013SAP points towards a broader phenomenon.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An Indian business can be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>incorporated in India;<\/li>\n\n\n\n<li>managed in India;<\/li>\n\n\n\n<li>employing Indian workers;<\/li>\n\n\n\n<li>paying Indian taxes;<\/li>\n\n\n\n<li>and still depend upon:<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>European software;<\/li>\n\n\n\n<li>American cloud services;<\/li>\n\n\n\n<li>foreign intellectual property;<\/li>\n\n\n\n<li>overseas authentication;<\/li>\n\n\n\n<li>international payment networks;<\/li>\n\n\n\n<li>foreign technical support.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This means that foreign regulatory dependency is becoming a corporate risk category in its own right.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Companies should therefore conduct sanctions and export-control audits of critical contracts before a dispute arises.<\/p>\n\n\n\n<h2 id=\"h-32-the-lawyer-s-view\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"32_The_Lawyers_View\"><\/span>32. The Lawyer&#8217;s View<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The real significance of the Nayara\u2013SAP litigation is not that one country\u2019s law has defeated another country\u2019s law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The significance is that modern international contracts can be governed simultaneously by several legal realities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The contract may say:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Indian law.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The parent may be subject to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>EU law.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The technology may have:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>US export-control implications.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The payment may pass through:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an international bank.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The customer may be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>on a sanctions list.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">And the service may be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>delivered through servers in several jurisdictions.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The lawyer&#8217;s task is to identify which legal rule actually attaches to which entity, transaction and obligation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is why the central question should not be:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">\u201cWhich law wins?\u201d<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">It should be:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">\u201cWhat legal obligation applies to whom, in relation to what transaction, and what contractual consequence follows?\u201d<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">That is the more accurate way to approach Foreign Sanctions vs Indian Law.<\/p>\n\n\n\n<h2 id=\"h-conclusion-draft-the-clause-before-the-portal-goes-dark\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion_Draft_the_Clause_Before_the_Portal_Goes_Dark\"><\/span>Conclusion: Draft the Clause Before the Portal Goes Dark<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Nayara Energy\u2013SAP litigation represents an important development in Indian cross-border commercial law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It demonstrates how a foreign sanctions listing can collide directly with an Indian contractual relationship.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It also demonstrates that the existence of a foreign sanctions listing does not, without further analysis, establish that an Indian contractual obligation has disappeared.<\/p>\n\n\n\n<h3 id=\"h-the-six-step-sanctions-analysis\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Six-Step_Sanctions_Analysis\"><\/span>The Six-Step Sanctions Analysis<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The party relying upon foreign sanctions must establish:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>the regulation;<\/li>\n\n\n\n<li>its scope;<\/li>\n\n\n\n<li>the prohibited conduct;<\/li>\n\n\n\n<li>the relevant entity;<\/li>\n\n\n\n<li>the contractual connection;<\/li>\n\n\n\n<li>the applicable remedy.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, Indian businesses should not assume that an Indian governing-law clause makes them immune from the practical consequences of foreign sanctions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The foreign parent may have genuine regulatory obligations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The foreign vendor may face genuine compliance risks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The answer therefore lies neither in blindly privileging foreign sanctions nor in assuming that Indian contractual law makes them irrelevant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It lies in careful contractual drafting, proper proof of foreign law and precise conflict-of-laws analysis.<\/p>\n\n\n\n<h3 id=\"h-the-practical-lesson-for-indian-companies\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Practical_Lesson_for_Indian_Companies\"><\/span>The Practical Lesson for Indian Companies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The practical lesson for Indian companies is straightforward:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If your business depends upon foreign software, cloud infrastructure, technology, banking, intellectual property or technical support, examine the sanctions clause before the sanctions event occurs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once the portal is switched off, the legal dispute may already have become a business-continuity crisis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For an energy company, manufacturer, financial institution, technology company or other critical business, the difference between a contractual disagreement and an urgent injunction application can be measured in hours.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Draft the clause before the portal goes dark.<\/strong><\/p>\n\n\n\n<h2 id=\"h-frequently-asked-questions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-can-eu-sanctions-automatically-cancel-an-indian-law-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_EU_sanctions_automatically_cancel_an_Indian-law_contract\"><\/span>Can EU sanctions automatically cancel an Indian-law contract?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No. An EU sanctions listing does not automatically establish that an Indian-law contract has been discharged. The precise EU measure, its application to the relevant entity and transaction, the contract and Indian law must all be examined.<\/p>\n\n\n\n<h3 id=\"h-can-a-foreign-company-stop-providing-services-to-an-indian-company-because-of-sanctions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_foreign_company_stop_providing_services_to_an_Indian_company_because_of_sanctions\"><\/span>Can a foreign company stop providing services to an Indian company because of sanctions?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It may be entitled to suspend or terminate services where a binding sanctions law actually prohibits performance and the contract gives the necessary contractual right. But merely asserting sanctions exposure does not automatically establish such a right.<\/p>\n\n\n\n<h3 id=\"h-what-did-the-delhi-high-court-decide-in-nayara-energy-v-sap-india\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_did_the_Delhi_High_Court_decide_in_Nayara_Energy_v_SAP_India\"><\/span>What did the Delhi High Court decide in Nayara Energy v. SAP India?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">On 21 September 2026, the Delhi High Court granted interim relief and directed SAP India to restore the status quo ante as it existed prior to 24 July 2025, including resumption of enterprise and software support under the relevant agreements. The Court&#8217;s observations were prima facie and did not bind the trial.<\/p>\n\n\n\n<h3 id=\"h-is-the-nayara-sap-interim-judgment-a-final-decision\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_the_Nayara%E2%80%93SAP_interim_judgment_a_final_decision\"><\/span>Is the Nayara\u2013SAP interim judgment a final decision?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No. It is an interim judgment\/order on the interlocutory application. The underlying suit continued.<\/p>\n\n\n\n<h3 id=\"h-does-section-56-of-the-indian-contract-act-apply-to-foreign-sanctions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Does_Section_56_of_the_Indian_Contract_Act_apply_to_foreign_sanctions\"><\/span>Does Section 56 of the Indian Contract Act apply to foreign sanctions?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It potentially can, depending on the facts. The party relying on Section 56 must establish the necessary impossibility or unlawfulness. Commercial inconvenience or increased expense alone is generally insufficient.<\/p>\n\n\n\n<h3 id=\"h-can-an-indian-subsidiary-rely-upon-sanctions-affecting-its-foreign-parent\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_an_Indian_subsidiary_rely_upon_sanctions_affecting_its_foreign_parent\"><\/span>Can an Indian subsidiary rely upon sanctions affecting its foreign parent?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Possibly, but not automatically. The court would need to examine the corporate structure, foreign law, contractual obligations, the parent&#8217;s role in performance and the availability of lawful alternative performance.<\/p>\n\n\n\n<h3 id=\"h-does-a-foreign-parent-and-its-indian-subsidiary-constitute-the-same-legal-entity\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Does_a_foreign_parent_and_its_Indian_subsidiary_constitute_the_same_legal_entity\"><\/span>Does a foreign parent and its Indian subsidiary constitute the same legal entity?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Ordinarily no. Separate corporate personality remains fundamental. The particular contractual and statutory circumstances must nevertheless be examined.<\/p>\n\n\n\n<h3 id=\"h-what-should-an-indian-company-do-if-a-foreign-software-provider-suddenly-suspends-services\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_should_an_Indian_company_do_if_a_foreign_software_provider_suddenly_suspends_services\"><\/span>What should an Indian company do if a foreign software provider suddenly suspends services?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Immediately preserve the contracts and evidence, identify the exact sanctions provision relied upon, determine which entity is the contracting party, examine the sanctions and force-majeure clauses, investigate alternative performance and consider urgent contractual, arbitral or court remedies.<\/p>\n\n\n\n<h2 id=\"h-selected-legal-authorities-and-primary-sources\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Selected_Legal_Authorities_and_Primary_Sources\"><\/span>Selected Legal Authorities and Primary Sources<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-indian-authorities\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Indian_Authorities\"><\/span>Indian Authorities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Nayara Energy Limited v. SAP India Private Limited &amp; Anr., CS(COMM) 1006\/2025, I.A. 23754\/2025, judgment dated 21 September 2026 (Delhi High Court, Vikas Mahajan J.).<\/li>\n\n\n\n<li>Energy Watchdog v. Central Electricity Regulatory Commission, (2017) 14 SCC 80.<\/li>\n\n\n\n<li>Satyabrata Ghose v. Mugneeram Bangur &amp; Co., AIR 1954 SC 44.<\/li>\n\n\n\n<li>Alopi Parshad &amp; Sons Ltd. v. Union of India, AIR 1960 SC 588.<\/li>\n\n\n\n<li>Naihati Jute Mills Ltd. v. Khyaliram Jagannath, AIR 1968 SC 522.<\/li>\n\n\n\n<li>National Agricultural Cooperative Marketing Federation of India Ltd. v. Alimenta S.A., (2020) 19 SCC 83.<\/li>\n\n\n\n<li>Hari Shanker Jain v. Sonia Gandhi, (2001) 8 SCC 233.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-european-union\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"European_Union\"><\/span>European Union<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Council Regulation (EU) No. 269\/2014.<\/li>\n\n\n\n<li>Council Implementing Regulation (EU) 2025\/1476 dated 18 July 2025.<\/li>\n\n\n\n<li>Council Regulation (EU) No. 833\/2014, including its separate provisions concerning Russia-related sectoral measures.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-comparative-authority\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparative_Authority\"><\/span>Comparative Authority<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lamesa Investments Limited v. Cynergy Bank Limited [2020] EWCA Civ 821.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These comparative authorities are persuasive only and do not constitute binding Indian precedent.<\/p>\n\n\n\n<h2 id=\"h-need-legal-assistance-with-a-cross-border-sanctions-or-contract-dispute\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need_Legal_Assistance_With_a_Cross-Border_Sanctions_or_Contract_Dispute\"><\/span>Need Legal Assistance With a Cross-Border Sanctions or Contract Dispute?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">If your Indian company is facing suspension or termination of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>software services;<\/li>\n\n\n\n<li>cloud infrastructure;<\/li>\n\n\n\n<li>technology licences;<\/li>\n\n\n\n<li>technical support;<\/li>\n\n\n\n<li>banking services;<\/li>\n\n\n\n<li>supply contracts;<\/li>\n\n\n\n<li>intellectual-property licences;<\/li>\n\n\n\n<li>or other essential contractual services because of EU, US, UK or other foreign sanctions,<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">the matter may require simultaneous analysis of foreign sanctions law and Indian contract law.<\/p>\n\n\n\n<h3 id=\"h-adv-tarun-choudhury\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Adv_Tarun_Choudhury\"><\/span>Adv. Tarun Choudhury<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Advocate | 25+ Years of Legal Experience<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\ud83d\udcf1 WhatsApp: +91 98812 44487<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\ud83d\udce7 Email: admin@legalserviceindia.com<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>LegalServiceIndia.com<\/strong><\/p>\n\n\n\n<h3 id=\"h-legal-disclaimer\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_Disclaimer\"><\/span>Legal Disclaimer<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This article is for general legal information and does not constitute legal advice for any specific transaction or dispute. Foreign sanctions regimes are highly fact-specific and subject to change. Transaction-specific advice should be obtained after examining the relevant contracts, corporate structure and applicable Indian and foreign laws.<\/p>\n\n\n\n<ul class=\"wp-block-yoast-seo-related-links yoast-seo-related-links\">\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/retrospectivity-of-procedural-amendments-in-trademark-law\/\">Retrospectivity of Procedural Amendments in Trademark Law<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/the-essentials-of-european-union-law-supremacy-sources-and-integration\/\">The Essentials of European Union Law: Supremacy, Sources, and Integration<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/from-desolation-to-self-reliance-a-leadership-case-study-of-sap-11th-battalion-chharrah\/\">From Desolation to Self-Reliance: A Leadership Case Study of SAP 11th Battalion, Chharrah<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/government-contracts-and-criminal-liability-analysis-of-karnataka-high-courts-landmark-ruling-on-contractual-disputes\/\">Government Contracts and Criminal Liability: Analysis of Karnataka High Court&#8217;s Landmark Ruling on Contractual Disputes<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/economic-impact-un-sanctions-iraq-1990-2003\/\">The Economic Impact of United Nations Sanctions on Iraq (1990\u20132003): Humanitarian Crisis, Economic Collapse and Lessons for International Law<\/a><\/li>\n<\/ul>\n\n\n\n<h2 id=\"h-important-links\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Links\"><\/span>Important Links<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.legalserviceindia.com\/lawyers\/lawyers_home.htm\" target=\"_blank\" rel=\"noopener\">Lawyers in India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/copyright\/register.htm\" target=\"_blank\" rel=\"noopener\">Copyright Registration in India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/articles\/index.html\" target=\"_blank\" rel=\"noopener\">Caveat Filing in Supreme Court of India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/helpline\/mutual_consent_divorce.htm\" target=\"_blank\" rel=\"noopener\">Mutual Consent Divorce in Delhi\/NCR<\/a> : WhatsApp 9650499965<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Foreign Sanctions vs. Indian Law: Can EU or US Sanctions Override an Indian Contract? What the Nayara Energy\u2013SAP Interim Judgment Really Decides About Foreign Sanctions, Indian Contracts, Force Majeure, and Cross-Border Litigation By Adv. Tarun Choudhury &#8211; \ud83d\udcf1 WhatsApp: 91-9881244487 Supreme Court Advocate | 25+ Years of Legal Experience Introduction: When Foreign Sanctions Collide With<\/p>\n","protected":false},"author":50,"featured_media":33527,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"two_page_speed":[],"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[20],"tags":[7343,5160,28],"class_list":["post-33526","post","type-post","status-publish","format-standard","has-post-thumbnail","category-company-law","tag-company-law","tag-picks","tag-top-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.4 (Yoast SEO v28.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Foreign Sanctions vs. Indian Law: Can EU or US Sanctions Override an Indian Contract? - Legal Service India - Articles<\/title>\n<meta name=\"description\" content=\"Can EU or US sanctions override an Indian contract? 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