During the days of December, the British defeated a force led by Hyder Ali near Amboor.
In February 1768, the British and Hyder Ali signed a treaty restoring the prior conditions of the Northern Circars. The area of Balagaut passed from Ali to the Company, subject to an annual payment to the Nizam of Hyderabad. On 4th October, Hyder Ali captured Malbagal from the British.
During the passing months of December 1768 to January 1769, Hyder Ali re-conquered his lost provinces and invaded the Northern Circars. On 4th April 1769, a treaty was signed providing for the mutual restitution of conquests and for the mutual aid and alliance in defensive wars.
In May, the news of Hyder Ali's successes had reached London, causing a huge drop in the value of the Company's stocks.
The Mysore-Maratha war from 1769 to 1772 succeeded the First Mysore War. The ensuing war witnessed Mysore relinquishing selected territories to the Marathas. The British did not however back Mysore in this war. And Hyder Ali of Mysore reckoned this as a violation of the understanding between himself and the British. He put the blame of Mysore's losses on the British, as his grievances played significant role to pave the way for the Second Mysore War.
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