Court awards McLaren over $12 million. Alex Palou calls claims “completely excessive” and points to his successor Piastri
The legal dispute between McLaren and Alex Palou has reached a new climax. A British court awarded the team damages of over $12 million. This is intended to compensate for the commercial loss caused by Palou’s breach of contract.
The Spaniard had failed to honor an agreement for a racing cockpit with McLaren at the time and instead remained with his team Chip Ganassi Racing. At first glance, the ruling looks like a clear victory for McLaren. However, the reaction of the opposing side reveals the full complexity of the case. McLaren CEO Zak Brown described the outcome as “entirely appropriate.” He emphasized that they had demonstrated to the court that they had fulfilled every contractual obligation. “We thank the court for recognizing the significant commercial impact,” Brown said.
Palou fires back
Alex Palou paints a completely different picture in his statement. According to him, the court completely dismissed McLaren’s original Formula 1 claims of nearly $15 million. The decision shows that the claims were “completely exaggerated,” he said.
He said he was disappointed that any compensation was to be paid at all. “They didn’t suffer any loss because of what they gained with the driver who replaced me,” was his harshest criticism. A clear reference to Australian Oscar Piastri.
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, 2026
Piastri, who took over the cockpit, almost became Formula 1 champion last year. Palou’s argument: in sporting and commercial terms, McLaren has actually benefited from the switch. Incidentally, after the deal fell through, he went on to become a multiple IndyCar champion, which also explains why McLaren was so interested in him at the time.
A particular irony: the Piastri case
The Piastri case lends a particular irony to the situation. Piastri was himself involved in a similar legal dispute.
As an Alpine junior, he had signed behind the scenes with McLaren, even though Alpine believed it had a valid contract with him. The case also ended up before the FIA’s Contract Recognition Board (CRB). The arbitration tribunal ruled in McLaren’s favor. The racing team thus benefited from a driver breaking an agreement with one team in order to switch to them. A highly controversial situation.
McLaren has now successfully sued Palou for exactly this reason, seeking tens of millions in damages. The matter is made even more interesting by a name that Palou explicitly mentions. He thanked Otmar Szafnauer for his “expert support.”
The shark tank that is Formula 1
Szafnauer was team principal at Alpine at the time and lost his star driver Piastri to McLaren. The fact that he is now advising Palou in his battle against McLaren closes a circle of sporting political hostilities. Palou himself announced that he would be exploring his legal options.
The case highlights the tough contractual practices in modern Formula 1. Teams are becoming increasingly aggressive in protecting their investments in young drivers. However, the decision also shows that not every astronomical claim is automatically upheld in a court of law.