• Source:JND
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Nayara Energy in India, part-owned by Russian oil giant Rosneft, is grappling with maintaining operations after Microsoft suspended IT services due to EU sanctions. In response, they filed legal proceedings against Microsoft at Delhi High Court and turned to domestic provider Rediff.com for communication support, according to sources at Reuters.

What Happened?

In May, the European Union implemented new sanctions against Nayara Energy as part of a wider crackdown against entities linked to Russia's conflict in Ukraine. With 49% ownership by Rosneft of Russia, Nayara found itself caught up in this international outrage, prompting several international service providers to reconsider their engagements with it.

Microsoft recently disabled access to key services used by Nayara's workforce—Outlook email and Teams messaging platforms. This action disrupted internal communications as well as daily business operations, severely impairing daily business operations.

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Nayara responded swiftly by filing a suit against Microsoft in the Delhi High Court over their abrupt withdrawal of services. While publicly criticising these sanctions, Nayara is currently working through their fallout while trying to maintain refinery operations, which have already been reduced significantly.

Rediff.com Steps In, But With Limits

In an effort to restore internal communications, Nayara has now turned to Rediff.com - a Mumbai-based email provider which offers cloud email services for businesses. Rediff can facilitate basic email functions going forward but cannot retrieve historic documents or conversations stored on Microsoft's cloud; a serious constraint as Nayara manages ongoing operations and compliance obligations.

Three sources familiar with the situation confirmed the switch and noted that employees remain locked out of historical emails and files, posing challenges to coordination efforts. All sources requested anonymity due to its sensitivity and lack of authority to speak publicly about it.

Sanctions Disrupt Key Russian Ties

The latest round of European Union sanctions target companies seen as supporting or profiting from Russia's oil exports and military-industrial complex. For instance, Nayara Refineries of India have been purchasing discounted Russian oil since Ukraine conflict began.

Sanctions have now extended into tech and infrastructure domains, prompting global service providers to reassess risk exposure to flagged companies such as Nayara. For Nayara this means significant operational hardships ranging from curtailed refinery runs to potentially being denied access to critical IT services.

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Microsoft’s Role and Legal Ramifications

While Microsoft has yet to issue a public statement regarding the role and legal ramifications of their actions in Delhi, their actions appear consistent with EU compliance protocols. Whether the actions were preemptive or under formal instruction remains unknown—an issue likely to come up during court proceedings against them in the coming months.

Nayara's legal filing indicates it views Microsoft's withdrawal as sudden and unfair given the implications it poses for business continuity. If successful, this case could set an important precedent regarding how U.S. tech firms engage with sanctioned entities operating in countries like India that do not impose such sanctions themselves.

What’s Next?

While Nayara strives to stabilize its IT systems and sustain refinery production, its main challenge lies in navigating future compliance minefields. Operating both in India and Russia means their operations may face additional scrutiny -- potentially disrupted by geopolitical tensions – in both locations.