IndyCar: McLaren sues Palou for at least $23 million (Update)

McLaren Racing is suing IndyCar champion Alex Palou for at least $23 million to recoup costs the team says it lost when the driver reneged on the contract he signed to join the team,

Palou, a 26-year-old Spaniard, guaranteed that he had “no outstanding obligation under any contract or agreement” that would keep him from joining McLaren after the IndyCar season ended, according to the Sept. 29 filing in the High Court of Justice Business and Property Courts of England and Wales Commercial Court. The Associated Press viewed the 17-page filing Tuesday.

The lawsuit is the latest twist in an ugly spat involving the talented young driver and two teams: McLaren, which in July 2022 said it had signed Palou and had him earmarked for an IndyCar seat and a reserve driver role with its Formula One team, and Chip Ganassi Racing, which said it had the contractual rights for Palou for the 2023 season.

Among the damages McLaren is seeking is nearly $15.5 million in lost revenue under official partner agreements with sponsors that anticipated Palou would be the driver. The team said it also lost some $3.5 million expected from third parties surrounding Palou´s participation in its testing program.

McLaren also wants to recoup all money spent on Palou when he was the test driver, both on track and in the simulator, and money it is spending seeking a replacement for Palou.

Last year it was Ganassi Racing suing Alex Palou and this year the Arrow McLaren IndyCar team is suing him.

Ganassi sued him last year for signing a contract to drive for McLaren in 2023, and now McLaren is suing him for supposedly signing a contract to drive for Ganassi in 2024.

You just can’t make these things up.

McLaren Racing Limited and McLaren Indy, LLC (better known as the Arrow McLaren IndyCar team) have jointly sued Alex Palou and Chip Ganassi Racing driver’s racing entity, ALPA Racing USA, LLC, in separate lawsuits in the U.K. Commercial Court, according to records reviewed by Indy Star.

Both lawsuits were filed as Part 7 Claims, meaning they were made for the process of claiming money from the defendants. According to the court records, McLaren Racing Limited and McLaren Indy, LLC, have hired Morgan Lewis & Bockius (UK) to represent them.

According to the Indy Star, the case against Palou was filed Wednesday, with the McLaren parties filing suit against ALPA Racing last Friday — the day McLaren Racing CEO Zak Brown sent a letter to his team members informing them that the likely 2023 IndyCar champion had made clear to Brown and the IndyCar team’s officials that he “does not intend to honor his contractual obligations” that would’ve involved Palou racing alongside Pato O’Ward and Alexander Rossi at Arrow McLaren in 2024.

In that letter — first obtained and reported by the Associated Press — Brown publicly revealed that the 26-year-old Spaniard had signed a separate contract with McLaren Racing, outside his deal to serve as the McLaren Formula 1 team’s reserve driver, to drive for McLaren for the 2024 IndyCar campaign. Additionally, Brown stated in the letter that the team had already “paid (Palou) a significant first payment toward his 2024 season, in addition to the millions of dollars toward developing him in our Formula 1 testing program and in his reserve driver role with a potential drive in F1 in the future.”

“Unfortunately, it now appears our belief, commitment, investment and trust in Alex was misplaced, as it is not being reciprocated,” Brown continued in the letter.

“This is incredibly disappointing, considering the commitment (Alex) has made to us both directly and publicly and our significant investment in him based on that commitment. We dedicated a lot of time, money and resources preparing to welcome Alex into our team because we believed in him and were looking forward to IndyCar wins with him.

“Coming out of his team dispute last fall, we were assured by Alex of his commitment to Arrow McLaren, reflected in the contract he entered into with us.”

When reached by phone Friday afternoon by the Indy Star, Roger Yasukawa, Palou’s current manager declined to comment on the lawsuits, but said the driver “is solely focused on winning the championship and finishing the season on a super high note, and once that’s done, we hope to provide more information once everything is clear.” Palou himself has long told reporters he would not reveal his 2024 plans until at or after the Sept. 10 season-finale at Laguna Seca, and Aug. 10, said he did not currently have an offer to race in F1 in 2024, clarifying that he “would be back in Indianapolis” next year.