EU-sanctioned Indian refiner sues Microsoft over service suspension

Nayara Energy has filed legal proceedings against Microsoft in Delhi High Court after the US technology giant suspended services to the Indian refiner following sanctions imposed by the European Union over ties to Russian oil giant Rosneft. 

‘This decision, based solely on Microsoft’s unilateral interpretation of recent European Union (EU) sanctions, sets a dangerous precedent for corporate overreach and raises serious concerns regarding its implications on India’s energy ecosystem,’ the company said in a statement. It said Microsoft is restricting access to its own data, proprietary tools and products.

Nayara Energy, which operates India’s second-largest single-site refinery, was included in the EU’s 18th Russia sanctions package earlier this month primarily due to Rosneft’s 49.13% stake in the company.

‘While the sanctions originate exclusively from the EU, Microsoft—a US-headquartered corporation—has chosen to withdraw services from Nayara Energy without any legal requirement to do so under US or Indian law,’ the refiner said. 

It said it has filed a petition seeking an interim injunction and resumption of services to ‘safeguard its rights and ensure continued access to essential digital infrastructure’, warning of potential disruption to its ability to meet obligations to Indian consumers and stakeholders.

Nayara Energy said Microsoft’s action sets ‘a dangerous precedent for corporate overreach’ and represents ‘a worrying trend of global corporations extending foreign legal frameworks into jurisdictions where they have no applicability’.

The case highlights the extraterritorial impact of sanctions compliance as multinational technology companies choose caution when dealing with sanctioned entities.

Microsoft’s decision was taken ‘unilaterally, without prior notice, consultation or recourse, and under the guise of compliance’ according to the refiner, which accused the EU of undermining India’s sovereignty.

The company contributes approximately 8% of India’s total refining capacity and 7% of its retail petrol pump network while employing over 55,000 direct and indirect workers. It operates under the mission ‘In India, for India’ and primarily serves the domestic market.

Since the EU sanctions were announced on 18 July, Nayara Energy has faced growing avoidance by oil shippers and traders, resulting in logistical disruptions and cancelled cargo pickups at its Vadinar port in Gujarat, according to Indian media reports.

‘All of Nayara Energy’s operations are fully compliant with Indian laws and regulations, and the company remains in regular engagement with Indian authorities to ensure transparency and accountability,’ the company said.

Rosneft has called the EU sanctions ‘unjustified and illegal’, claiming it is ‘not a controlling shareholder of Nayara Energy’ and that the enterprise is managed by an independent board of directors.

Microsoft did not respond to an email for comment.

https://www.nayaraenergy.com/media/press-release

Breaking: As of 30 July, Microsoft has restored ‘all services’ to Nayara Energy, reports The Times of India, while LiveMint notes that Nayara has withdrawn its lawsuit.