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Palou, the 2021 IndyCar title winner and current clear points leader, appeared poised to join the Arrow McLaren outfit for 2024 but has now seemingly gone back on the deal.
He plans to instead remain with Chip Ganassi Racing - the team having previously filed a lawsuit against Palou, who signed a McLaren contract during 2022.
Plausibly, Palou - who qualifies for an FIA superlicence to race in F1 - might have seen any potential grand prix path with McLaren blocked by the strong rookie performance of Oscar Piastri.
Following the dispute earlier this month, Zak Brown confirmed at the 2023 Dutch Grand Prix that McLaren has begun formal legal proceedings against Palou and his business.
The American said: “Alex informed us that he has no intention of honouring his contract with us in IndyCar or Formula 1. We have a contract so [this is] now in a legal process.
“We filed in the London courts last week against him - both as a person and his business entity. We’ll just let the legal proceedings carry the situation forward.”
Brown cited Daniel Ricciardo breaking a bone in his hand during a Friday practice shunt at Zandvoort, meaning he will now miss the race, as to why Palou might have been better offer waiting “around the hoop” for a true McLaren berth.
He said: “I have no idea what’s going through his mind because I haven’t spoken with him.
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“But things move fast in Formula 1. Drivers can break their wrists in an instant.
“If you want to do Formula 1, you need to hang around the hoop and see what opportunities are provided.”
He added his disappointment at the way the saga has played out, given Brown felt a close working relationship with Palou.
“Very disappointing,” was his reaction. “We had a very good relationship.
“He hasn’t personally communicated with me about it, which is rather disappointing given all that we’ve done for him and the opportunities that we’ve provided.
“I don’t think his decision has anything to do with McLaren per se. Our relationship was very strong so very disappointed with how it’s been handled.
“On a personal level, I think our relationships with our drivers is something McLaren takes very seriously, and I think we do a good job of creating a family environment, so to be let down in that manner is pretty disappointing.”
McLaren plans to run its IndyCar driver Patricio O’Ward in the 2021 Italian GP-winning MCL35M later this year under the Testing of Previous Cars rule.
Brown also reckons it is “business as usual” in terms of how McLaren will satisfy the need to run a rookie driver in an FP1 session between now and the end of the season.