Palou ordered to pay $12 million to McLaren in contract breach case

Ruling from London’s High Court on Friday has ordered Alex Palou to pay McLaren Racing more than $12 million for the breach of contract lawsuit.

The ruling comes after a five-week trial last year, following a lawsuit the team filed when Palou backed out of two different agreements.

McLaren was originally seeking $30 million in damages as part of reclaiming money allegedly lost in sponsorship, driver salaries and performance earnings. However, the financial number was reduced to $20.7 million.

Palou, a four-time IndyCar Series champion, has not been ordered to pay anything related to Formula 1 losses that were claimed by McLaren as a byproduct of him remaining with Chip Ganassi Racing instead of moving to Arrow McLaren, the IndyCar team for McLaren. 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 One claims against me which once stood at almost $15m,” Palou said. “I’d like to thank Otmar Szafnauer for his expert assistance.

“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.

“I look forward to the upcoming season with Chip Ganassi Racing.”

The majority of the damages McLaren has been awarded were related to sponsorship, with Palou.

Team owner Chip Ganassi expressed his thoughts on the judge’s decision impacting his driver.

“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 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.”