India's Nayara Energy Takes Microsoft to Court Over Service Block

Nayara Energy, India’s Rosneft-backed oil refiner, recently launched legal action against Microsoft after the company abruptly suspended access to its essential digital services. The disruption affected Outlook, Teams, and Microsoft’s cloud tools—even though Nayara had fully paid for licenses.

The suspension came in response to the European Union’s 18th sanctions package, announced on July 18, targeting Russian-linked entities. While Nayara is headquartered in India, its Russian ownership triggered Microsoft’s compliance protocols, resulting in an immediate block on services.

Nayara denounced the move as a form of “corporate overreach” and filed a petition with the Delhi High Court, demanding the restoration of services and protection of its digital infrastructure.

Before the case proceeded to a full hearing, Microsoft reinstated access on July 30, prompting the court to allow Nayara to withdraw the petition. However, the judges left the option open for further legal action if services are disrupted again in the future.

During the blackout, Nayara was forced to use Rediff.com for basic communication, though access to earlier Microsoft-stored data remained limited.

The episode underscores broader concerns about India’s digital sovereignty. Heavy dependence on global cloud providers leaves domestic companies vulnerable to geopolitical sanctions, even without local legal obligations.

Crucially, there is no evidence Microsoft used Azure for surveillance. The suspension was rooted in regulatory compliance with EU sanctions, not intelligence operations.