It occurred when United States Navy brig USS Hornet under the command of James Biddle encountered the British Royal Navy brig-sloop HMS Penguin off Tristan da Cunha, and was one of several naval engagements which occurred after the conflict ended due to the signing of the Treaty of Ghent in 1815.

Late in 1814, the United States Navy had been preparing a small squadron at New York City, to attack British shipping in the Indian Ocean.

On 15 January, Decatur took advantage of a north-westerly gale to break out alone in President, but the frigate went aground on the bar at the harbour mouth and received damage which delayed it for two hours and slowed it.

Decatur was unable to turn back as the gale was still blowing, and President was captured after being pursued by the four frigates of the blockading British squadron.

Some time earlier, Penguin had been sent from Cape Town to hunt an American privateer (Young Wasp) which had been attacking homeward-bound East Indiamen.

Biddle believed that the British had surrendered at this point and prepared to step aboard Penguin but was wounded by musket balls.

[7] Tom Bowline was sent to a neutral port (Rio de Janeiro, then part of the Portuguese Empire) with Penguin's crew, where they were escorted ashore by U.S. Marines.

Hornet escaped only after a chase lasting two and a half days, during which Biddle had been forced to jettison his stores, ballast, anchors, cables, guns, small arms, capstan, the armourer's anvil, ship's bell and even substantial parts of the forecastle to lighten the sloop enough to outrun Cornwallis.

He reached the Cape of Good Hope on 9 May, where he learned that the Senate had ratified the Treaty of Ghent on 18 February, ending the war more than a month before the engagement with Penguin.