GAZ, which was contracted to produce Volkswagen vehicles at its factory in Nizhny Novgorod before the German firm suspended operations in Russia last year, in March convinced the court to freeze Volkswagen's assets while court proceedings play out.

But the Nizhny Novgorod Regional Arbitration Court had already on April 3 reversed that interim measure and ruled conclusively against such a step this week.

"At present there are no grounds to suggest that the defendants would avoid implementation of the court's decision (if passed in favour of the plaintiff) and that their property status would prevent them from fulfilling this decision," the court said on Thursday.

That comment was in reference to a lawsuit in which GAZ is seeking 15.6 billion roubles ($193.1 million) in damages after Volkswagen terminated its production agreement in August, saying VW's attempts to exit the Russian market had put GAZ's interests at risk.

GAZ subsequently filed a separate lawsuit, seeking 28.4 billion roubles ($351.5 million) in losses associated with Volkswagen terminating its engine deliveries.

Volkswagen referred to a statement from its Russian subsidiary, Volkswagen Group Rus, which said it considered new claims to be "unreasonable" and expressed surprise, saying the partnership with GAZ had ended on "mutually beneficial terms".

"We believe in the objectivity of the judicial system, which will take into account all the facts of the case and make a decision in our favour," the statement said.

In both cases GAZ had sought interim measures that would freeze Volkswagen's assets.

The court conclusively refused GAZ's freezing requests on the two claims on April 11 and April 12 respectively.

Volkswagen is preparing to sell its Russian assets, including its flagship plant in the city of Kaluga with annual production capacity of 225,000 vehicles, but no decision has yet been made and Russian government approval is pending.

($1 = 80.8000 roubles)

(Reporting by Gleb Stolyarov and Alexander Marrow; additional reporting by Victoria Waldersee; Editing by)

By Gleb Stolyarov and Alexander Marrow