During the time when Albuquerque was employed before Ormuz, the Soldan of Egypt fitted out a fleet of twelve sail with 1500 Mamelukes, which he sent under the command of Mir Husseyn to oppose the Portuguese in India. While on his voyage up the Red Sea, Husseyn attacked the towns of Yembo and Jiddah, putting the sheikhs of both places to death, and making great plunder. He then sailed for Diu, where Malek Azz commanded for the king of Cambaya, with whom he was ordered to join his forces to oppose the Portuguese. The timber of which these ships were built was cut in the mountains of Dalmatia, by procurement as it was said of the Venetians, as the Soldan and the Turks were then at variance. It was conveyed from Dalmatia to Egypt in twenty-five vessels, commanded by a nephew of the Soldan, who had a force of 800 Mamelukes on board, besides mariners. At this time the gallies of Malta were commanded by a Portuguese knight, Andrea de Amarall; who, learning that the timber was designed to be employed against his countrymen in India, attacked the Egyptian fleet with six ships and four gallies, in which he had 600 soldiers. After a sharp engagement of three hours, he took seven ships and sunk five; but the rest escaped to Alexandria, whence the timber was carried up the Nile to Cairo, and thence on camels to Suez.

At this time the viceroy Almeyda was on the coast of Malabar, and had sent his son Don Lorenzo with eight ships to scour the coast as far as Chaul, a town of considerable size and importance seated on the banks of a river about two leagues from the sea, and subject to the Nizam-al-Mulk103, by whose orders Don Lorenzo was well received. They had some intelligence of the fleet of the Soldan, but believed it an unfounded rumour, till it appeared in sight while Don Lorenzo was on shore with most of his officers. They hastened immediately on board, giving such orders as the time permitted, and were hardly on board when the enemy entered the harbour, making great demonstrations of joy at having so opportunely found the enemy of whom they were in search. Husseyn thought himself secure of victory, as he had surprised the Portuguese ships, and determined himself to board the ship commanded by Don Lorenzo. For this purpose he ran her on board, pouring in balls, arrows, hand-grenades, and other fireworks; but was answered with such determined bravery, that he gave over his intention of boarding, though the Portuguese vessel was much smaller than his. The other Egyptian vessels had no better success; and as night approached, both parties gave over the engagement to prepare for its renewal next morning.

As soon as day appeared Don Lorenzo gave the signal to renew the fight; and in his turn endeavoured to board the Egyptian admiral, in which he was imitated by the other captains: Only two of them succeeded in capturing two gallies belonging to the enemy, all the men on board which were put to the sword. The battle was carried on with much bravery on both sides, and the Portuguese seemed fast gaining the superiority; when Malek Azz, lord of Diu, made his appearance with a great number of small vessels well manned, coming to the assistance of Husseyn. Don Lorenzo immediately dispatched two gallies and three caravels to hinder the approach of this reinforcement to his enemies, which executed their orders so effectually that Azz was obliged to flee for shelter to another place. The battle still continued between Lorenzo and Husseyn till night again parted them, both endeavouring to conceal their loss from the other. In the evening after the cessation of the battle, the Portuguese captains met in council on board the admiral to deliberate on what was best to be done; and were unanimously of opinion that it was rash to continue to defend themselves in the river of Chaul, especially as Malek Azz was so near with such a powerful reinforcement, and strongly recommended that they should go out to the open sea, where they might fight with less disadvantage, and would have it in their power to escape if circumstances rendered it necessary. But, remembering the displeasure of his father for not having attacked the fleet of Calicut in the river of Dabul, and fearing his retreat into the open sea might be construed as flight, Lorenzo determined resolutely to await the events of the next morning, only making some change in the disposition of his force, in order to protect some ships belonging to Cochin which were much exposed to the enemy.

Next morning, on observing the change of posture in the Portuguese ships, Malek Azz conceived that they meant to retreat; he immediately came out therefore from the place where he had taken shelter, and boldly charged them, undismayed at the havock which was made among his small vessels by the Portuguese cannon. Most unfortunately at this time the ship of Don Lorenzo ran foul of some stakes in the bed of the river, and let in so much water that she was in danger of sinking. The brave Lorenzo exerted himself to the utmost in this perilous situation, till a ball broke his thigh; then ordering himself to be set up leaning against the main-mast, he continued to encourage his men till another ball broke his back and killed him. His body was thrown below deck, where it was followed by his page Gato, who lamented the fate of his master with tears mixed with blood, having been shot through the eye by an arrow. After a vigorous resistance, the Moors boarded the ship, and found Gato beside his masters body. He immediately rose and slew as many of the Moors as covered the body of Lorenzo, and then fell dead among them. At length the ship sunk, and of above an hundred men who belonged to her only nineteen escaped. In all the Portuguese ships an hundred and forty men were slain, while the enemy lost upwards of six hundred. The other captains got to Cochin, where the viceroy then was, and who received the intelligence of his sons glorious death with wonderful resolution.

Soon after the defeat of the Portuguese fleet at Chaul, Almeyda received a letter from Malek Azz. This man was born in slavery, being descended of heretic Christian parents of Russia, and had risen by degrees to the rank he now held. The origin of his advancement was owing to the following trivial incident. One day a kite flying over the king of Cambaya, muted on his head, on which the king was so enraged that he declared he would give all he was worth to have the kite killed. Malek Azz who heard this, was an excellent bowman, and immediately let fly an arrow which brought down the kite. The king of Cambaya rewarded this lucky shot so bountifully, that the archer soon rose to be lord of Diu, a famous sea-port in Guzerat, seated on a triangular peninsula, which is joined to the continent by so small an isthmus that it is generally reputed an island. In this letter to the viceroy, Malek Azz craftily endeavoured to secure himself at the same time both in the favour of the king of Cambaya, and to conciliate the Portuguese, though he mortally hated them for the injury they had done to the trade of Diu. While he pretended to condole with the viceroy on the death of his son, whose bravery he extolled in exalted terms, he sent him the nineteen men saved from his sons ship, who had been made prisoners in the late battle; endeavouring by this conciliatory conduct to appease his wrath for having aided Mir Husseyn and occasioned the defeat of the Portuguese.

In this same year 1508, seventeen vessels sailed for India from Lisbon about the beginning of April, which were all separated by bad weather, but all rejoined at Mozambique, except one which was lost on the Islands of Tristan de Cunna. These ships, with those of the former year, coming all together to India about the close of the year 1508, greatly raised the courage of the Portuguese, which had been much depressed by their defeat at Chaul. By this fleet an order came from the king for Don Francisco de Almeyda to resign the government of India to Don Alfonso de Albuquerque, and to return to Portugal in one of the trading ships. But Almeyda took upon him to suspend the execution of this order, under pretence that he had already made preparations for taking revenge upon Mir Husseyn, and the Rums or Turks104 who had slain his son. Owing to this a controversy arose between Albuquerque and Almeyda, the former demanding possession of the government, which the latter refused to demit; which became a precedent for succeeding governors to protract the time of their command. Albuquerque, much offended by this conduct of Almeyda, retired to Cochin, where he appears to have lived in private till the departure of Almeyda from India.