McLaren Racing and Arrow McLaren were awarded more than $12 million in damages on Friday after a court in London determined four-time IndyCar Series champion Alex Palou was in breach of contract.
The case stems from Palou’s decision against honoring a contract he signed with the McLaren racing teams in October 2022. Palou attempted to join McLaren and Arrow McLaren beginning in 2024, but his original team, Chip Ganassi Racing, held to a team option.
Palou opted to sign a deal with Chip Ganassi Racing in August 2023.
McLaren Racing initially sought approximately $31 million in damages before reducing that number to $20.7 million. Despite the final reduction, McLaren Racing was happy with the ruling by Justice Simon Picken.
“This is an entirely appropriate result for McLaren Racing. As the ruling shows, we clearly demonstrated that we fulfilled every single contractual obligation towards Alex and fully honored what had been agreed,” McLaren Racing boss Zak Brown said in a statement to the Indianapolis Star. “We thank the court for recognizing the very significant commercial impact and disruption our business suffered as a result of Alex’s breach of contract with the team.”
Palou, naturally, had a different point of view.
“The court has dismissed in their entirety McLaren’s Formula 1 claims against me which once stood at almost $15 million,” Palou said in a statement. “The court’s decision shows the claims against me were completely overblown. It’s disappointing that so much time and cost was spent fighting these claims, some of which the Court found had no value, simply because I chose not to drive for McLaren after I learned they wouldn’t be able to give me an F1 drive.
“I’m disappointed that any damages have been awarded to McLaren. They have not suffered any loss because of what they have gained from the driver who replaced me. I am considering my options with my advisors and have no further comments to make at this stage.”
Chip Ganassi is covering Palou’s legal fees in the case.
“Alex has our full support, now and always,” Ganassi said. “We know the character of our driver and the strength of our team, and nothing changes that. While we respect the legal process, our focus is exactly where it should be: On racing, on winning, and on doing what this organization has always done best, competing at the highest level. We’re locked in on chasing another NTT IndyCar series championship and defending our 2025 Indianapolis 500 victory. That’s where our energy is, and that’s where Alex’s focus is, on the track, doing what he does best: winning.”
–Field Level Media
