Microsoft Restores Services to Nayara Energy Amid EU Sanctions: Here's What Happened and Why It Matters for India

In a significant development, Microsoft has reinstated all digital services, including email and Microsoft Teams, to Nayara Energy—an Indian energy company partly owned by Russia’s Rosneft—just ahead of a scheduled Delhi High Court hearing on the issue.

The move comes after Microsoft suspended services earlier this week, following Nayara's inclusion in the European Union’s latest sanctions list targeting Russian-linked entities in response to the ongoing war in Ukraine.

Microsoft Confirms Service Restoration

A Microsoft spokesperson confirmed the restoration and emphasized the company’s continued engagement with Indian clients.

“Microsoft is committed to supporting all its customers in India and worldwide, and has restored services for Nayara Energy,” the spokesperson said. “We are in ongoing discussions with the European Union regarding service continuity.”

Nayara Challenges Suspension in Court

In response to the abrupt suspension, Nayara Energy filed a petition with the Delhi High Court seeking an interim injunction. The company argued that Microsoft’s actions were unilateral and unjustified, especially since the sanctions were EU-specific and not applicable under Indian or U.S. law.

“Microsoft is currently restricting Nayara Energy’s access to its own data and licensed digital tools, despite these being acquired under fully paid-up agreements,” the company had said in a statement dated July 28.

Nayara further warned that such actions set a "dangerous precedent for corporate overreach" and could impact India’s energy ecosystem.

Rosneft and Ownership Details

Rosneft holds a 49.13% stake in Nayara Energy, formerly known as Essar Oil. The rest is controlled by Kesani Enterprises, a consortium including Russia’s United Capital Partners (UCP) and Mareterra Group Holding. Nayara operates a 20 million tonnes/year refinery in Vadinar, Gujarat, and manages over 6,750 petrol pumps across India.

Energy Impact and Legal Standpoint

Nayara accounts for nearly 8% of India’s total refining capacity and 7% of its retail fuel outlets. The company said its legal action aimed to prevent disruption of essential services, ensuring it can continue meeting commitments to Indian consumers and stakeholders.

“This action, based solely on Microsoft’s interpretation of EU sanctions, was taken without notice or consultation, highlighting a troubling trend of foreign laws being enforced where they do not apply,” Nayara said.