The action of 16 October 1799 was a minor naval engagement during the War of the Second Coalition between a squadron of Royal Navy frigates and two frigates of the Spanish Navy close to the naval port of Vigo in Galicia. Both Spanish ships were a treasure convoy, carrying silver specie and luxury trade goods across the Atlantic Ocean from Spanish America to Spain. Sighted by British frigate HMS Naiad enforcing the blockade of Vigo late on the 15 October, the Spanish ships were in the last stages of their journey. Turning to flee from Naiad, the Spanish soon found themselves surrounded as more British frigates closed in.

Although they separated their ships in an effort to split their opponents, the Spanish captains were unable to escape: Thetis was captured after a short engagement with HMS Ethalion on the morning of 16 October, while Santa Brigida almost reached safety, only being caught on the morning of 17 October in the approaches to the safe harbour at Muros. After a short engagement amid the rocks she was also captured by an overwhelming British force. Both captured ships were taken to Britain, where their combined cargoes were transported with great fanfare to the Bank of England. The eventual value of their cargo was assessed as at least £618,040, resulting in one of the largest hauls of prize money ever awarded.

In 1796, following the secret terms of the Treaty of San Ildefonso, the Kingdom of Spain suddenly reversed its position in the French Revolutionary Wars turning from an enemy of the French Republic into an ally. The Spanish declaration of war on Great Britain forced the British Mediterranean Fleet to abandon the Mediterranean Sea entirely, retreating to ports at Gibraltar and Lisbon. This force now concentrated against the Spanish Navy, most of which was stationed at the main fleet base of Cádiz in Southern Spain. A British blockade fleet won a significant victory over the Spanish at the Battle of Cape St Vincent in February 1797, dissuading the Spanish fleet from playing a significant role in the ongoing war.

Other Spanish ports were also blockaded with the intention of limiting Spanish trade and movement and intercepting treasure convoys from the colonies of New Spain and South America. Vast quantities of gold, silver and valuable trade goods crossed the Atlantic in regular armed frigate convoys. To intercept and seize these shipments the Royal Navy dispatched their own frigates to patrol the Spanish coast. To encourage their sailors, the Royal Navy distributed prize money to the value of the ships and material captured and the seizure of a Spanish treasure fleet could yield spectacular amounts of money: particularly large sums had been captured during previous wars in 1656, 1744 and 1762, but during the first three years of conflict between Great Britain and Spain only one treasure convoy had been intercepted, near Cádiz at the action of 26 April 1797, and on that occasion the treasure was smuggled ashore before the convoy was seized.

On 21 August 1799, a convoy of two 34-gun frigates, Thetis under Captain Don Juan de Mendoza and Santa Brigida under Captain Don Antonio Pillon, sailed from Veracruz in New Spain with a cargo that included cochineal, indigo dye, cocoa and sugar but which principally consisted of more than two million silver Spanish dollars. The passage across the Atlantic was uneventful and by the afternoon of 15 October the convoy, under orders to make any Spanish port, was nearing its destination at Vigo, a fortified port city in Galicia just south of Cape Finisterre at the most northwestern point of Spain. The ports of Northern Spain were blockaded by British frigates sailing independently, crossing the approaches in search of enemy shipping and it was one such ship, the 38-gun HMS Naiad under Captain William Pierrepont, that sighted the Spanish convoy in position 41°01′N 12°35′W / 41.017°N 12.583°W / 41.017; -12.583 at 20:00 on 15 October. Turning away to the southeast, the Spanish ships then made all sail northeast in search of a safe harbour, with Pierrepont in pursuit.

At 03:30 on 16 October, another sail was spotted to the southwest, rapidly revealed to be a second British frigate, the 38-gun HMS Ethalion under Captain James Young. Ethalion joined the chase and at dawn two more sails were sighted, the 32-gun HMS Alcmene under Captain Henry Digby to the west and 32-gun HMS Triton under Captain John Gore to the north. With four British frigates now in full pursuit, the Spanish captains sought to split their enemy and divided, at which Pierrepont directed Ethalion, the closest British ship, to pursue the faster Thetis. Young complied, firing long-range shot in Santa Brigida's direction at 09:00, driving Pillon's ship further from his companion.

As Naiad, Triton and Alcmene streamed past in pursuit of Santa Brigida, Young focused his attention on Thetis, coming within range at 11:30. Mendoza, seeing that battle was inevitable, bore up across Ethalion's bows in an effort to rake Young's ship. Young turned in order to thwart the manoeuvre and fired two rapid broadsides into Thetis, which responded in kind. For an hour the frigates exchanged running fire until Mendoza, realising escape was impossible, surrendered. Thetis had lost one man killed and nine wounded in the exchange while Ethalion had suffered no casualties.

As Ethalion subdued Thetis the remainder of the British squadron continued southwards in pursuit of Santa Brigida. Pillon was an experienced officer with a good knowledge of the Northern Spanish coast and he intended to lose his pursuers in the rocky channels of Cape Finisterre. Early on 17 October he reached Spanish coastal waters, rounding Finisterre just beyond the Monte Lora rocks. Captain Gore on Triton, which was in full flow at seven knots, was unaware of the obstacle and at 05:00 crashed into them, coming to a juddering halt and inflicting severe damage to his ship's hull. Gore was able however to bring Triton off soon afterwards and continued pursuit, assisted by Digby on Alcmene who was able to block Pillon's route into Porte de Vidre.