McLaren prepare for mediation against IndyCar champion in multi-million dollar lawsuit

McLaren is readying itself to fight Alex Palou in mediation over its $30 million breach of contract lawsuit against the IndyCar champion.

According to AP News, the Spanish driver, currently racing in the 24 Hours of Daytona, will have to fly to London for the hearing, which is scheduled for Tuesday, upon conclusion of the race in Florida.

Mediation differs from arbitration, which requires a settlement between parties to be reached. With this route, neither side has to accept any proposals that might settle the lawsuit.

If unsuccessful, it is expected a trial will follow later this year, as reported by RACER in September.

This is not the first time Palou has been through this process. Having signed a contract with McLaren in 2022 for the 2023 IndyCar season, the 27-year-old was found to be in breach of his Chip Ganassi Racing deal, which had - and exercised - an option on him for that campaign.

The issue was settled via mediation and his McLaren agreement was amended so he would join the team in 2024, with Chip Ganassi allowing him to serve as the Woking-based squad's F1 reserve driver the season prior.

The now three-time IndyCar champion tested for McLaren's F1 team and took part in FP1 at the United States Grand Prix in 2022, but by August the following year he no longer wanted to leave Chip Ganassi.

Implications for McLaren

When McLaren was informed of this, it responded with a lawsuit in October 2023 to recoup advances on salary, resources directed towards F1 development and the financial impact of lost sponsorship from the Spaniard not joining the team.

Palou, already an IndyCar champion from the 2021 season, went on to clinch the back-to-back titles with Chip Ganassi in 2023 and 2024.

His u-turn was likely influenced by the lack of obvious route to F1 with McLaren, after the papaya outfit secured Oscar Piastri and Lando Norris to long-term deals.

Without that avenue, Chip Ganassi - the stronger IndyCar operation - was a more attractive prospect to him.

The change of heart also had downstream implications for McLaren. After signing David Malukas in place of Palou, it had poached one of IndyCar's most promising young talents.

However, when he broke his wrist early last year, it opted to let the 23-year-old go after he missed four races, something that triggered an exit clause in his contract.

2023 F2 champion Theo Pourchaire was brought in to replace Malukas after deputising well for him, but was subsequently dropped before the next race as 24 Hours of Le Mans winner Nolan Siegel was preferred to the Frenchman.