The ruler of Mysore, Tipu Sultan, had in December 1789 again declared war on the British East India Company and their allies in Southern India, after five years of diplomatic wrangling about the terms of the Treaty of Mangalore that had ended the Second Anglo-Mysore War.

For the past two years the war has continued as British forces and their allies drive the Mysore armies back towards the capital of Seringapatam.

Both sides are reliant on supply by sea to maintain their campaigns inland: the British forces are supported from their major ports at Bombay and Madras, later stationing additional forces at the small port of Tellicherry inside Mysore territory.

The Mysorean forces are supplied through Mangalore by French ships.

France had been an ally of the Tipu Sultan's father Hyder Ali during the Second Anglo-Mysore War and although the political instability caused by the French Revolution in Europe has prevented active involvement, they have ensured that their ships have kept up a supply of equipment to Mysore throughout the war.

In an effort to eliminate French support, Commodore William Cornwallis, the British naval commander in the region, stations a squadron of frigates at Tellicherry, where they were ideally situated to blockade Mangalore and prevent the passage of shipping into Mysorean territory. The squadron consisted of Cornwallis in HMS Minerva, Captain Sir Richard Strachan in HMS Phoenix and HMS Perseverance under Captain Isaac Smith.

The French operate a squadron of their own on the coast, led by Commodore Saint-Félix and consisting of two frigates based at Mahé, a small French port seven miles (eleven kilometers) south of Tellicherry.

The French have communicated to the British at Tellicherry that they will not submit to any attempts to search their vessels, but Strachan and Cornwallis had replied that they will enforce the blockade of Mangalore whatever the consequences.