UK Court Awards McLaren $12M from Palou in Contract Breach

London's High Court ruled on Friday that four-time IndyCar champion Alex Palou must pay McLaren Racing more than 12 million U.S. dollars in damages for breaching a multiyear contract to drive for the team's IndyCar program starting in 2024. The 28-year-old Spanish driver, who opted to remain with Chip Ganassi Racing, admitted to the breach but contested the extent of the financial losses claimed by McLaren, which operates both IndyCar and Formula One teams.

The dispute stemmed from an agreement Palou signed in October 2022 to join McLaren's Arrow McLaren IndyCar team for the 2024, 2025, and 2026 seasons, with an option for 2027. This deal followed mediation in 2023, when Ganassi exercised an option to retain Palou for that year. In exchange, Palou served as McLaren's Formula One reserve and test driver during the 2023 season, including participation in a practice session at the United States Grand Prix. However, in August 2023, Palou announced he would not honor the contract, citing a lack of a clear path to a Formula One seat after McLaren signed Oscar Piastri to its F1 lineup.

McLaren initially sought nearly 30 million dollars in damages, later refining the claim to about 20.7...