I belive the town is called Junon. The harbor...with the girl and her dolphin, when some sort of sea creature attacks. I guess it is a Mako factory.

Anyway, the sea monster casts a spell that creates a light blue sphere around a party member. That party member can no longer attack and looses health continuously. How do I get rid of that?

EDIT: Also, how much of the game have I completed by now? It's been almost 10 hours and Disk 1 is still far from over it seems.