Volkswagen’s assets in Russia were frozen by a court on Monday.
Russian auto manufacturer GAZ, which was contracted to produce Volkswagen vehicles at its factory in Nizhny Novgorod, sought to halt any sale as part of a lawsuit against the German carmaker.
This is as GAZ says it is a breach of contract after Volkswagen terminated the production agreement in August.
In court filings, GAZ said Volkswagen's attempts to exit the Russian market put its own interests at risk and it is seeking $201.3 million in damages over the terminated contract.
A Russian court on Monday agreed to freeze all of Volkswagen's assets in Russia while the dispute with GAZ plays out.
Volkswagen, along with other foreign carmakers, suspended operations in Russia last year after sanctions were imposed on Russia over the war in Ukraine.
Volkswagen has been trying to sell its Russian assets, including its flagship plant in the city of Kaluga.
Earlier this week, Czech carmaker Skoda Auto, part of the Volkswagen Group, also said it was in the final stages of a deal to sell its Russian assets.