In late 1940, Italian ships had been transporting men, equipment and supplies from Brindisi to the Albanian ports of Valona and Durazzo for another offensive against Greece, during the Italo-Greek War (28 October 1940 – 23 April 1941).

The British conducted several operations by the Mediterranean Fleet from Alexandria and Force H from Gibraltar, several convoys to Greece and Malta, the return of ships from Malta, ship reinforcements to the Mediterranean Fleet by Force H, attacks by carrier aircraft on Sardinian airfields, the Battle of Taranto (11/12 November) and a raid into the southern Adriatic to attack convoys on the Brindisi–Valona route.

Force X, three British light cruisers and two destroyers from the Mediterranean Fleet, sailed north to the Strait of Otranto in the Adriatic on 11 November, catching a convoy of four merchant ships, with two Regia Marina escorts, returning from Valona that night.

[1] The Operation Coat ships were discovered by the Regia Aeronautica and attacked on 9 November but only obtained near misses on Ark Royal, Barham and Duncan.

The Italian submarines Alagi, Axum, Aradam, Medusa and Diaspro took position south-west of Sardinia on 9 November but encountered no British ships.

Hyperion and Ilex turned towards Taranto and Force X (Vice Admiral Henry Pridham-Wippell) the Leander-class light cruisers Orion, Sydney and Ajax, with the Tribal-class destroyers Mohawk and Nubian turned north to raid Italian convoys carrying troops and supplies to Albania across the Strait of Otranto at the entrance to the Adriatic Sea.

On 21 October, Supermarina, the Italian Admiralty, established Comando Superiore per il Traffico con l'Albania (Maritrafalba [it], Capitano de Vascello Pollacchini) to convoy merchant ships sailing between Brindisi and Valona and Durazzo during the build up.

[7] On 12 November, an Italian convoy of four empty merchant ships, Antonio Locatelli, Premuda, Capo Vado and Catalani, were on their way back from Valona, to Brindisi, escorted by the First World War-era torpedo boat Nicola Fabrizi (Tenente di vascello Giovanni Barbini) and the auxiliary cruiser Ramb III (Capitano di fregata Francesco De Angelis).

[10][d] Force X advanced on the western side of the convoy, firing star shell from their secondary guns and Orion engaged Fabrizi with its 4-inch armament while firing 32 salvoes, most from its forward 6-inch main armament and two torpedoes at Capo Vado, the third merchant ship in line at 6,400 yd (3.2 nmi; 3.6 mi; 5.9 km) which received a torpedo hit and began to sink.

At 1:28 a.m. Fabrizi turned to starboard when 4,500 yd (2.2 nmi; 2.6 mi; 4.1 km) east-south-east of Orion opened fire and began to make smoke to cover the convoy.

[17] Vincent O'Hara wrote in 2009 that the action was the first night attack by surface ships on an Italian convoy, which "foreshadowed how deadly British strike forces would be".

[7] Having rejoined the Mediterranean Fleet the ships made course for Alexandria and were not found by air reconnaissance of the Regia Aeronautica until 13 November, having lost three CANT Z.501 flying boats to the fighters from Illustrious the day before.