The Portuguese had realized the strategic location of Karainagar. They built this fort using coral rocks and named it Fortaleza do Caes. It was built to supplement the coastal defence of the Mannar Fort (which is mostly in ruins today).
Both these smaller forts once augmented the security of the approach to the massive Jaffna Fort which was a trading hub and a military symbol of dominance. By March 1658, the Portuguese were in for a surprise when the aggressive Dutch forces laid siege to the fort. The Dutch executed a decisive battle tactic – they first fired their cannons on the wooden water storage tank of the fort.
History records that the tank was broken to pieces. Taking advantage, the troops led by the Dutch trio – Captains Cornelies Reb, Piester Waset and Van de Reede – attacked the fort with relentless rifle fire. Thereafter the thirsty Portuguese troops, weary from the counter attack surrendered their fort on April 28, 1658.