Helo Sonia.
To deny VNet peering between two Azure Management Groups, you can use Azure Policy to create a policy definition that restricts the ability to peer VNets across management groups.
u can use the Azure Policy portal, Azure PowerShell, or Azure CLI to create the policy
ex:
{
"mode": "All",
"policyRule": {
"if": {
"allOf": [
{
"field": "Microsoft.Network/virtualNetworkPeerings",
"exists": "true"
},
{
"field": "Microsoft.Network/virtualNetworkPeerings/remoteVirtualNetwork.id",
"notLike": "/providers/Microsoft.Management/managementGroups/*"
}
]
},
"then": {
"effect": "deny"
}
},
"parameters": {}
}
Assign the policy to a management group. (you can choose to apply it to all child management groups and subscriptions)
I hope this is help u.
Regards