McLaren land $12 million legal win in star driver contract battle

Three-time IndyCar champion Alex Palou — Photo: © IMAGO

McLaren

McLaren land $12 million legal win in star driver contract battle

McLaren and Alex Palou have been battling in the courts

By Chris Deeley.

Friday 23 January 2026 21:00

IndyCar champion Alex Palou has been ordered to pay McLaren a multi-million-dollar settlement after a High Court ruling went against him this week.

The legal dispute stemmed from Palou backing out of a contract that would have seen him join McLaren’s IndyCar operation for the 2024 season, instead choosing to remain with Chip Ganassi Racing after signing a new deal.

Palou had also served as McLaren’s F1 test driver in 2023 following the controversial agreement, but informed the team later that summer that he had “no intention” of honoring the contract he had signed, ultimately triggering the court case.

Article continues under video

The 28-year-old later cited his belief that the team could not provide him with a pathway into a full-time F1 drive as his reason for breaching the contract.

Palou: McLaren claims completely overblown

In a statement after the judgement, Palou said: “The court has dismissed in their entirety McLaren's Formula 1 claims against me which once stood at almost $15m. 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.”

F1 McLaren IndyCar Alex Palou