McLaren Racing has secured a partial victory in its legal dispute with four-time IndyCar champion Alex Palou. A London court ruled the team is entitled to damages of around $12 million.
The ruling came from the High Court, which examined Palou’s decision to abandon a planned move to McLaren three years ago. McLaren had argued that the reversal caused significant commercial and competitive harm.
McLaren launched the lawsuit after Palou signed an agreement in late 2022 to join its U.S.-based IndyCar operation, Arrow McLaren. The move collapsed when Palou chose to remain with Chip Ganassi Racing. He then went on to dominate the series.
Since staying with Ganassi, Palou has won three consecutive IndyCar titles from 2023 to 2025 and claimed victory at the Indianapolis 500. His success strengthened his legal team’s argument that McLaren suffered no real sporting loss.
A ruling has been made in the McLaren Racing versus Palou case . McLaren was awarded over $12 million in damages.
Statement from Palou: pic.twitter.com/kl90FqqWE5
— Jenna Fryer (@JennaFryer) January 23, 2026McLaren’s lawyers, however, told the court the team lost performance-related income, sponsor revenue, and competitive momentum. They originally sought $19.7 million in damages, citing missed on-track success and commercial opportunities.
Judge Simon Picken ruled in McLaren’s favour on several claims. He found the team incurred extra costs after Palou’s exit, including higher payments to Mexican driver Pato O’Ward, who gained stronger negotiating leverage. That element alone amounted to just over $1.3 million.
The court also accepted McLaren’s arguments regarding lost prize money and sponsor income linked to Palou’s absence. The final award totals at least $10.2 million, with an additional $2 million to $2.5 million pending expert assessment.
McLaren Racing chief executive Zak Brown welcomed the decision, saying the ruling recognised the commercial disruption caused by Palou’s contract breach.
Palou responded by saying the judgment showed McLaren’s claims were excessive. He expressed disappointment that damages were awarded. He argued the team did not suffer losses because of the driver who ultimately replaced him.
Ganassi team owner Chip Ganassi issued a brief statement backing Palou, saying the driver has the team’s full support.
The case unfolded against the backdrop of McLaren’s resurgence in Formula One. The team won the constructors’ title last season, and Lando Norris secured the drivers’ championship.
