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Too many ships (over 50, I think) lead to bad positioning, weakening them in battle. Apparently to the point where this can happen.... (wasn't this patched someday?)
ok, i got it, too many ships in a small strait, and stupid sailors too, but still... one transport ship? no, no... no. i have rebels everywhere, i cant be everywhere to take care of the drunken sailors. f.....
You seem to have lots of individual navies in that battle. Retreat most of them and the rest should win the fight easily. Sometimes, less is indeed more.