In the First Anglo-Burmese War (1824–26), Htaw Lay was one of the commanding officers responsible for the defense of Yangon (across the river from Dala) against the British invaders. After an eight-month battle, the Burmese were ousted from Yangon in December 1824. He returned to a war ravaged Dala as governor after the war's end in 1826. His kingdom had been defeated and left crippled in debt. (The British had returned Lower Burma in exchange for an agreement to pay an indemnity of one million pounds sterling as well as to cede Arakan, Assam, Manipur and the Tenasserim coast south of the Sawleen. The war reparations, which were to be made in four installments, were to impose a huge burden on the populace in the following years.)