During the 1760's Hyder Ali became the ruler of the Indian state of Mysore. A vigorous and aggresive ruler, his conquests of Kanara and Calicut increased his influence and proved a threat to the other powers in India; namely Hyderabad, the Marathas and of course the British.
To counter this threat, in 1766 the British entered into a treaty with Nizam Ali of Hyderabad; with the British agreeing to support Nizam Ali against any threat by Hyder Ali in return for the territory of Northern Circas. The following year Nizam Ali, the Marathas and the British established a triple alliance against the threat of Hyder Ali.
The conduct of the war
These however proved to be unreliable allies, as Hyder Ali paid off the Marathas and concluded his own deal with Nazir Ali where the two of them agreed to combine against the British and attack Arcot. Despite these moves and an overwheming superiority of numbers Hyder Ali found himself on the defensive and was defeated, first in the battle of Chengam and then again at the battle of Tiruvannamalai, by the British forces led by Colonel Smith. Hyder Ali's attempts to establish a navy also came to nothing faced with British naval power.
With his peace overtures to the British firmly rejected, Hyder Ali gathered together his forces and was able to force the British to abandon the siege of Bangalore. He then marched his army to within five miles Madras threatening one of the core territorial holdings of the East India Company. The British were sufficiently fearful to sue for peace.
The resulting treaty of April 1769 essentially restored the pre-war status quo with both sides agreeing to hand back their respective conquests. It additionally provided a mutual defence pact, with each side promising to aid the other in the event of an attack by a third party.
It did nothing however, to remove the mutual antagonisms between Hyder Ali and the British which were to surface again before long.
Sourced from the 1911 Encyclopedia Britannica together with the History of Mysore at
http://prabhu.50g.com/princely/mysore/hyder_history.html and the http://www.itihaas.com website.