Sorry I didn't see the morale stat, but I outnumbered and outpowered the enemy, I was thougherly beating his empire, and my soverign had no penalties or bonus to morale. I attacked, closed range firing off a fire spell, he fired the ice spell on one of my peasent squads, second round movement everyone but that peasent squad closed to one square from him, then no one could move or act the next round in any way. Enemy carved me up for one round then hitting the auto resolve button I won.
Hasn't happened again since though.