At Madras Admiral Rainier had become increasingly concerned during September by Linois's depredations, and had decided to strengthen his convoy escorts. He replaced Wilhelmina with the 50-gun HMS Centurion. Centurion was under the nominal command of Captain John Sprat Rainier, who was seriously ill at Madras, so Captain James Lind assumed temporary command. Lind sailed from Madras to Vizagapatam earlier in the month with the Indiamen Barnaby and Princess Charlotte and anchored in the roads, while the Indiamen loaded cargo ready for the return journey to Madras. The ships were still anchored in the roads at 06:00 on 15 September when Linois's squadron appeared on the horizon to the south-west, approximately 12 nautical miles (22 km) away. The only flag visible on the strange ships was on board one of the frigates, which displayed the St George's Cross. Lieutenant James Robert Phillips, in command of Centurion while Lind was ashore, was not convinced by this ensign: he was aware that a French squadron was in the region, and positioned his ship so that his broadside faced the approaching vessels. At 09:45 the French came within range and Phillips opened fire, cautiously at first until he could be sure of the identity of the strangers.
The ship of the line exchanged signals with the frigates as Centurion began to fire, and as the signals were different from those used by the Royal Navy, Phillips was certain he was facing an overwhelming enemy squadron. Centurion made urgent signals to the Indiamen, warning them of the approaching threat. The crew of Barnaby panicked and cut her anchor cables, causing her to drift on shore where she was wrecked. Captain John Logan on Princess Charlotte was calmer and remained at anchor, although he ignored requests from Phillips for assistance from his ship's gun battery. Linois's ships spread out, Atalante closing to within 0.5 nautical miles (900 m) of Centurion, with Sémillante close behind. Marengo remained out of range, as Linois was unwilling to risk his flagship in shallow coastal waters for which he did not have accurate charts: the approaches to Vizagapatam were protected by a series of sandbars and if Marengo grounded during the engagement then his flagship could have been wrecked. When the French frigates came within 200 yards (180 m), Phillips opened fire on Atalante as Sémillante attempted to reach the other side of the British ship to batter from the other side. The French frigates also came under long range fire from the three-gun battery at Vizagapatam, under the command of Lieutenant Colonel Alexander Campbell, on detached service from the 74th Regiment of Foot. Campbell despatched 50 sepoys in small boats to assist the crew of Princess Charlotte, whose armament of 24 guns continued to remain silent.
By 10:00, all three French ships were within range of Centurion and a heavy exchange of fire began. Within 15 minutes, both Centurion and Marengo had their colours shot away and at 10:45 the ship of the line turned away for open water, followed by the frigates, her rigging in disarray. Damage had rendered Centurion unable to manoeuvre rapidly and she began slowly limping inshore to shelter from Marengo among the coastal shoals. Captain Lind rejoined his ship by boat, hailing the Princess Charlotte, which had still not participated in the battle, to cut her anchor cables and go ashore to avoid being captured. Logan refused and at 11:15 surrendered without a fight as the whole French squadron moved back towards the harbour. Marengo again remained beyond the sandbars that marked the entrance. The boatloads of sepoys, who were still en route to Princess Charlotte, turned about and rowed back to shore to avoid capture. Sémillante took possession of the merchant ship while Marengo and Atalante engaged Centurion, which had moved out of range of support from the shore batteries.
Despite her 50 guns, Centurion's armament left her vulnerable as most were carronades, short-range heavy cannon that were useless in the face of the long range gunnery from Marengo. Centurion consequently suffered severe damage and by 13:15 had been holed, with her rigging wrecked and her anchor cable shot through, which caused her to slowly drift away from the shore, out of control. Seeing that his opponent was disabled, Linois decided not to press the attack and issued orders for his squadron, accompanied by their prize, to sail away. Lind gradually regained control of his ship and even managed to raise some sail in pursuit, but the French were too far ahead. After some final parting shots, Centurion anchored as her crew set about repairing the damage. Linois remained within sight for the rest of the day, but showed no sign of renewing the action; he disappeared on the north-east horizon at dusk.

Despite the destruction of Barnaby and the capture of Princess Charlotte, British losses were mild, Centurion having one man killed and nine wounded. The ship was very badly damaged, however, with a number of holes shot in her hull and badly torn rigging and masts. There were no recorded casualties among the troops onshore. The French suffered slightly heavier losses, Marengo having two men killed and an officer wounded and Atalante with three killed and five wounded. Sémillante, which had not been closely engaged in the battle, suffered no casualties. Damage to the French ships was severe, and Linois was forced to abandon further operations and slowly make his way back to Île de France, arriving in November. There Marengo underwent a full refit, lasting six months.
Both nations claimed the encounter as a victory, the French for the capture of Princess Charlotte and the British for the survival of Centurion in the face of overwhelming French numerical superiority. Linois justified his withdrawal in a letter, explaining that risking irreparable damage his squadron in a close engagement with Centurion would have curtailed his raiding operations. Privately however, Napoleon was angered by the survival of Centurion and wrote in response that "France cared for honour, not for a few pieces of wood." British historians have echoed Napoleon's criticism, judging that Centurion was at Linois's mercy and that he had failed to destroy her, in words of William Laird Clowes, because of his "half-hearted and timid action . . . [that] cannot but provoke censure.