Alex Palou: Four-time IndyCar champion ordered to pay McLaren £9m after breach of contract trial at London High Court

Four-time IndyCar champion Alex Palou on Friday was ordered to pay McLaren more than £9m in the breach of contract suit the team filed when the Spaniard backed out of two different deals with the racing team.

The Friday ruling from London's High Court came after a five-week trial last year. McLaren initially sought almost $30m (£22m) in damages, but that number was reduced to $20.7m (£15.3m) as the racing juggernaut sought to reclaim money allegedly lost in sponsorship, driver salaries and performance earnings.

Palou signed a deal with McLaren in 2022 to drive for its IndyCar team in 2023 - with a view to a pathway to Formula 1, but he remained with Chip Ganassi Racing in 2023 amid a contract dispute. Palou felt after Oscar Piastri had joined the F1 team that he had been misled, and no longer wanted to make the move so reneged on the contract.

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"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 honoured what had been agreed," said McLaren Racing chief Zak Brown.

"We thank the court for recognising the very significant commercial impact and disruption our business suffered as a result of Alex's breach of contract with the team."

McLaren added that it is still seeking interest and reimbursement of its legal expenses.

Palou was not ordered to pay anything related to Formula 1 losses McLaren said it suffered when he decided to remain with Ganassi Racing rather than move to McLaren's IndyCar team in 2024. All the damages awarded to McLaren were tied to losses the IndyCar team suffered by Palou's change of mind.

"The court has dismissed in their entirety McLaren's Formula 1 claims against me which once stood at almost $15m [£11m]," 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."

Palou has won three consecutive IndyCar titles and the Indianapolis 500 since this saga began midway through the 2022 season. He has four IndyCar titles in the last five seasons. Palou and Brown are both at Daytona International Speedway for this weekend's Rolex 24 sports car endurance race: the Meyer Shank Racing team Palou is driving for will start from the pole on Saturday, while Brown is competing in a support race earlier in the day.

The bulk of the damages awarded to McLaren were tied to loss of sponsorship. Palou was ordered to pay $5.3m (£3.92m) to cover the losses in the team's agreement with NTT Data, $2.5m (£1.85m) in "other IndyCar sponsorship revenue" and $2m (£1.48m) in performance-based revenue.

IndyCar team owner Chip Ganassi said Palou has his backing.

"Alex has our full support, now and always. We know the character of our driver and the strength of our team, and nothing changes that," Ganassi said. "While we respect the legal process, our focus is exactly where it should be: on racing, on winning, and on doing what this organisation has always done best, competing at the highest level.

"We're locked in on chasing another 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."

McLaren have won the last two Constructors' Championships in F1 and Lando Norris last season won the Drivers' Championship.

Palou first signed with McLaren in 2022 to drive for its IndyCar team in 2023, but Ganassi pushed back and exercised an option on Palou for the 2023 season. The matter was decided through mediation, with McLaren covering Palou's legal costs. Palou could not join McLaren until 2024 but was permitted to be the reserve and test driver for the F1 team in 2023.

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When McLaren signed Piastri for their F1 team, and Palou's performance with Ganassi in IndyCar was so dominant, the driver decided he did not want to move to McLaren's IndyCar team and reneged on his contract.

Palou argued his contracts with McLaren were "based on lies", and he'd never have a chance to race in F1. His counsel also accused Brown of destroying evidence by deleting WhatsApp messages related to the case.

McLaren contended it lost revenue when Palou backed out ahead of the 2024 season and the team had to scramble to find another driver. McLaren wanted Indianapolis 500 winner Marcus Ericsson, who had already committed to Andretti Global, so it instead used four different drivers that season.

Because none were as accomplished as Palou, McLaren argued both NTT Data and General Motors reduced their pay-outs to the team because McLaren did not field a driver of the calibre it had promised.

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