Court documents: McLaren Racing claims Alex Palou signed 3-year IndyCar deal last October

In 2022, three weeks after his lawyers brokered an arbitration settlement with Chip Ganassi Racing for a federal breach of contract court case, Alex Palou signed a three-year IndyCar deal with McLaren Racing and Arrow McLaren that was set to begin this week, according to court documents obtained and reviewed by IndyStar.

According to the complaints of the U.K. Commercial Court cases jointly filed by McLaren Racing and Arrow McLaren against Palou and his racing entity ALPA Racing USA LLC, McLaren claims Palou signed a deal with the team Oct. 1, 2022, separate from the IndyCar contract Palou signed with McLaren earlier that summer that caused the breach of contract claims.

In the complaint filed against ALPA Racing, McLaren’s lawyers wrote: “The Claimants and Defendant are party to a Driving Agreement dated 1 October 2022 pursuant to which (ALPA Racing) is obliged, inter alia, to procure that Mr. Palou is available to undertake for (Arrow McLaren) driving and promotional activities in connection with IndyCar racing from the end of the 2023 IndyCar series (i.e. from 11 September 2023) and throughout the 2024, 2025 and 2026 IndyCar series (seasons).”

The complaint goes on to say that Palou and ALPA Racing also finalized a deal with McLaren’s F1 team to serve as its reserve driver for the 2023 F1 season – starting with this weekend’s Singapore Grand Prix. Though McLaren Racing CEO Zak Brown told a small group of reporters Saturday at IndyCar’s season-finale at WeatherTech Raceway Laguna Seca that he does not expect Palou to show up half a world away from his IndyCar Champion’s Tour in Southern California and private IndyCar hybrid test day Thursday, Brown said the team will hold a room for him as legally required.

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And when Palou doesn’t show, they believe they’ll have additional grounds for breach of contract claims. The suit currently says that on Aug. 8, Palou's lawyers informed Arrow McLaren that he did not intend to fulfill the contract the complaint claims he signed in October 2022. Minutes after Palou snagged his fifth race win of the year two weeks ago, clinching the 2023 IndyCar title, Ganassi confirmed Palou would return for 2024 and beyond.

The suit states: “Mr. Palou’s continued commitment to CGR is wholly incompatible with (ALPA Racing’s) obligations to the Claimants under the Driving Agreement. Entry into the New CGR Agreement places (ALPA Racing) in actual breach of Clause 15 of the Driving Agreement (a repudiatory breach)."

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Though the complaint goes on to say that McLaren Racing and Arrow McLaren “expect to recover in excess of 200,000 pounds (roughly $250,000),” a source close to the case has told IndyStar that that figure is only a formality in the British courts used to separate cases into divisions depending on the amount of money at stake.

IndyStar previously reported that McLaren Racing and Arrow McLaren believe the damages they’ve suffered range from $20 million to $30 million, according to a source. That could include Palou’s advance on his 2024 IndyCar salary Brown says the two-time IndyCar champ requested; legal fees McLaren is believed to have helped Palou pay during his 2022 legal saga with CGR, and the costs McLaren incurred in Palou’s F1 testing program. Palou’s decision also could have put McLaren at odds with sponsors that had joined the team with the expectation of being linked to a series champion.

Palou has said very little regarding the case, only telling IndyStar last month he was “sad the way things worked out” and that he would’ve “liked to have done things differently.”

“But I cannot really change everything and color it and make it a lot more ‘nice,’” he continued. “It’s not that way.”

Palou has still not spoken with Brown directly since the Music City Grand Prix in Nashville on Aug. 6. Ganassi surprisingly released a statement in support of his champion driver, claiming that “the position of McLaren’s IndyCar team regarding (Palou) is inaccurate and wrong. He remains under contract with CGR.”

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Ganassi and Palou’s original deal − which included a team option for the 2023 IndyCar season that Ganassi attempted to trigger to keep hold of Palou for at least one more season − also included a clause that prevented Palou from negotiating with other teams for 2024 and beyond before the start of this September.

Though presently unconfirmed by either side, it’s believed that during the arbitration process between Palou and Ganassi a year ago, that clause was waived in the process of putting together a new one-year deal that Palou drove under this season. Even if it did still exist, though, it theoretically wouldn’t make his contract signed with McLaren last October any less valid. It would’ve only opened the door for Ganassi to file suit for yet another round of breach of contract – which doesn’t appear to be taking place.

“I’m not going to get into a running commentary,” Brown told reporters last weekend when asked for more details regarding his ongoing legal battle with Palou. “I’ll let the (U.K. Commercial Court) and the facts when they surface allow people to come to their own conclusions as to Alex’s character.”

This article originally appeared on Indianapolis Star: Alex Palou: Court docs say McLaren signed him to a 3-year IndyCar deal