McLaren sues Alex Palou in U.K. Commercial Court
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 IndyStar.
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.
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.”
Representatives for McLaren Racing and Arrow McLaren could not be immediately reached for comment Friday afternoon regarding the lawsuits.
When reached by phone Friday afternoon, 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.
This comes a year after Chip Ganassi Racing sued Alex Palou for, among other charges, breach of contract for the driver’s dealings with McLaren while CGR asserted it still had Palou under a valid contract. Across a wild couple hours July 12, 2022, CGR announced it had picked up an option on Palou’s contract for 2023. That evening, Palou disputed the claim then McLaren tweeted a release announcing it had signed Palou to race in some capacity for the global team starting in 2023, along with taking on F1 testing duties.
Two weeks later, IndyStar broke the news of CGR’s lawsuit against Palou. Though still largely maintaining top-10 results, Palou underwent a relatively rough patch with just one top-5 finish (3rd-place in Nashville) in a seven-race span leading up to the Sept. 11 season-finale at Laguna Seca, all while Palou maintained publicly that he intended to race for McLaren in 2023.
There, Palou walloped the field by more than 30 seconds for his only win of the season, leaving him 5th in the standings. Three days later, it was revealed that Palou and CGR’s lawyers had reached a deal in mediation that would see Palou stay in his No. 10 Honda ride in IndyCar while continuing a testing program with McLaren that would later include at least three separate testing outings over the last 11 months, as well as an appearance in Free Practice 1 at the U.S. Grand Prix at Circuit of the Americas.
Later that fall, IndyStar obtained the final filings of the suit, which included redacted copies of Palou’s contract with CGR that included a clause stating the driver was not allowed to begin negotiations for a ride outside his current home for 2024 and beyond until Sept. 1, 2023.
That clause brought into question several in the paddock’s assertions in recent months that Palou was not only almost certainly headed to Arrow McLaren for 2024, but had already signed, seemingly again violating the terms of his contract with CGR. Regardless of that fact, or whether that clause may have been waived by Ganassi during the final stages of the mediation process to reach a new amended deal with Palou for 2024, McLaren is likely to assert that it was not privy to any details of Palou’s contract with CGR and that, according to Brown’s letter last week to the team’s employees, McLaren Racing and Arrow McLaren had entered into a legally-binding deal with Palou and had already begun paying him.
Palou’s now former management team, Monaco Increase Management, which led the charge to land the driver with McLaren, released a statement last Saturday decrying the driver’s decisions after an MIM representative said Palou had been unresponsive since Wednesday of that week. Yasukawa, the former IndyCar driver who had previously been managing Palou’s career and helped the Spaniard make his IndyCar debut with Dale Coyne Racing in 2020, confirmed to IndyStar last Friday that he had reassumed his duties as Palou’s manager.
“(MIM) is bitterly disappointed to learn about Alex Palou’s decision to break an existing agreement with McLaren for 2024 and beyond,” the company said in a statement. “Together, we had built a relationship that we thought went beyond any contractual obligation and culminated in winning the 2021 IndyCar crown and tracing a path to F1 opportunities.
“Life goes on, and we wish Alex all the best for his future achievements.”
In defense of his driver, Ganassi released his own scathing statement ahead of Saturday’s Gallagher Grand Prix on the IMS road course, where Palou added 17 points to his lead on Scott Dixon (101 points back) and Josef Newgarden (105 points back) now with three races remaining in the 2023 season.
McLaren ‘playing the victim’:Chip Ganassi comments on Alex Palou’s contract status
“I grew up respecting the McLaren Team and their success. The new management does not get my same respect,” Ganassi said in the statement. “Alex Palou has been part of our team and under contract since the 2021 season. It is the interference of that contract from McLaren that began this process, and ironically, they are not playing the victim.
“Simply stated, the position of McLaren IndyCar regarding our driver is inaccurate and wrong; he remains under contract with CGR.”
When reached Friday afternoon, a CGR representative declined to comment on McLaren’s lawsuits filed against Palou.
Unlike last year’s lawsuit by CGR, it does not appear McLaren Racing and Arrow McLaren will make an attempt to force Palou to drive for McLaren, though the financial investment the team made in his development (along with his salary paid ahead of the start of that 2024 contract) that the plaintiffs in Palou’s latest lawsuits appear to be seeking repayment of are likely to eclipse eight figures.
“Everybody working at Arrow McLaren realizes what we’re putting together as a team,” the team’s racing director Gavin Ward told IndyStar on Aug. 13, when asked about how Arrow McLaren will move on from what he called a sizable disappointment. “And we want people who want to be part of that and can see that.”