McLaren to hold mediation with Alex Palou in London involving $30 million breach of contract: Reports

IndyCar driver Alex Palou will fly to London following his participation in the Rolex 24 at Daytona for mediation with McLaren involving a lawsuit filed by the team over a breach of contract (via AP News). The Spaniard was informed about the same as he prepared for the 2025 Rolex 24 at Daytona. The race will end on January 26 at 1:40 PM local time and Palou is likely to travel with his attorneys after the completion of the race as the mediation is scheduled for Tuesday.

Mediation is where the two parties contesting a lawsuit sit to come to a settlement and if the same isn't reached, the lawsuit moves forward to trial. In McLaren's lawsuit against Alex Palou, the Woking-based outfit is reportedly looking for $30 million in compensation following the Spaniard's breach of contract.

AUTO: MAY 11 NTT IndyCar Series Sonsio Grand Prix - Source: Getty

Alex Palou signed a contract with Arrow McLaren in 2022 to join the team in 2023. However, Chip Ganassi Racing stopped the move following Palou's contract with them, and as a result, it was decided that the Spaniard would join McLaren for the 2024 season.

Palou tested for McLaren's F1 team and was involved in FP1 at the United States Grand Prix 2022 but by August 2023 he changed his mind about making the move. With Lando Norris and Oscar Piastri locked in at McLaren, the CGR driver didn't see any way of making it to the F1 team for a full-time role and decided to stay with Chip Ganassi Racing.

Following Alex Palou's breach, Arrow McLaren responded with a lawsuit in October 2023. The basis of the lawsuit was McLaren wanting to recoup the advances to Palou in the form of the salary, the resources poured into his development, and the financial implications that occurred due to Palou's denial.

Following Alex Palou’s breach of contract, Pato O'Ward was given the role curated for the Spaniard.

Alex Palou's reaction after Chip Ganassi Racing denied the Arrow McLaren move for 2023

Alex Palou's move to Arrow McLaren for 2023 was denied by CGR as he had a then ongoing contract with CGR. Palou spoke with journalists in July 2022 about the mediation between CGR and McLaren and whether it changed the dynamic within the team. He said,

“It didn't really change much from Toronto. Yeah, now there's a lawsuit involved, but to be honest, I think that was already, like, written since that day or that weekend. I wish it was obviously better and I didn't have 15 cameras pointing at me now. But, yeah, I cannot change it now,” Palou was quoted as saying by FOX59 News (0:05 onwards)

“It's all the same as how we work and stuff. At least it's been like that the past two weekends. And the preparation as well. I think I was yesterday at the simulator. We did the prep as normal, obviously, we didn't talk too much about what we were doing, but I was doing stuff and just trying to get the car as better as possible for this weekend, for not only me, but for everybody,” added Palou when asked about the internal dynamics at CGR.

Palou ended up staying at CGR for 2023 and went on to become the 2023 IndyCar champion.