Time limit for this battle is five rounds, then Malady will teleport the entire ship to a different location, which ends the fight.
As the enemies are quite bulky, it can be very difficult to wear them down within just a few rounds. So it is advised to RESPEC some builds with the mirror on the lowest level on the ship before starting the fight in order to save your precious turns during battle.

After this fight you automatically get the unmissable Heaven's Gate achievement.

In addition you either get the Seascape Achievement (not killing every enemy; survived the siege) or the Swashbuckler Achievement (killed every enemy within the time limit).

Read the following guide to make the fight on the Lady Vengeance very easy.
There are just a few steps you need to keep in mind in order get these achievements without any big effort.
This guide is written after our experience in Tactician Mode at first try (and a couple of modified playthroughs). Yeee-ha!

In any case it is recommended to make a savefile before ending the fight, to ensure that you get both the Seascape and the Swashbuckler Achievement.

You have access to a mirror to respec right before and after the fight. So feel free to make use of it. :)

Fane´s special skill Timewarp will make the fight a lot easier.

Same goes for the 8 AP modification from the gift bag (the 8AP setting can be disabled at any point in your playthrough; with the use of the norbyte script extender you can even work around the penalty of getting any achievements while using the gift bag).

It is also possible to use the ballista for some chip damage during battle, but shooting costs way too much AP - so it´s not worth bothering.

You should have purple weapons and probably even purple gear, which tremendously helps with the battle - make sure to buy any skill books and/or gear you might need for the incoming siege.

You could attack your ranger to about 50% health before battle and cast Deathwish during the first round in battle on him to further increase his damage output.

The mentioned steps are not mandatory as the battle gets pretty easy with efficient builds anyways.
Everything mentioned below can be adjusted to your own preference, just make sure to fulfill the main objectives.
You should have at least two characters that deal the majority of the damage needed. It is recommended to have:

1 Ranger
with Glass Cannon & Executioner (Req: Warfare 1)

and Fin25+ & Ini15~ (Get rid of all other attributes such as memory or constitution since you won´t need them for the battle)
• Glass Cannon grants max AP every turn!
  
• Make sure that you invest in Huntsman and Ranged (as you will have to use High Ground to get a sufficient damage boost) at least +5-6 points each
  
• In terms of skills, I´d recommend at least the following skills: Elemental Arrowheads, Tactical Retreat, Ricochet, Barrage, Sky Shot

1 Warrior
with Glass Cannon & Opportunist

and Str35+ & Ini12~ (Again: Get rid of all other attributes such as memory or constitution since you won´t need them for the battle)
• Opportunist is very helpful as you will stand in the center of the enemies, dealing 150-200 damage everytime they pass you!
  
• Make sure that you invest in Warfare (+7) and Polymorph (+3-5) (as you will mainly use warfare spells in combination with poly spells)
  
• In terms of skills, I´d recommend at least the following skills: Battering Ram, Whirlwind, Thick of the Fight, Bull Horns, Crippling Blow, Blitz Attack

For the rest of the party:

• Having one Scoundrel with Backlash, Cloak and Dagger, Earthquake (Req: Geo 2), Medusa Head (Req: Poly 2) & Adrenaline will be crucial for using a little bug that will allow you to have two turns per round without any penalty.
  
  
• Be sure that your other party member has some AOEs since you shouldn´t bother with attacking single enemies; or simply play as Lone Wolf [in that case skip the guideline for the remaining party member]

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Important key skills for this guide are:
Earthquake (make sure that the Gheist-Enemies have a fire surface underneath them in order to prevent them from staying invisible due to the applied fire damage when they move) - this may take a couple of tries

also

Medusa Head for passively petrifying enemies without magic armour.

Thick of the Fight for physical extra damage

Elemental Arrowheads for additional fire damage

Get as many characters into dialogues and buff them respectively (the characters will be locked into the conversation, leaving their applied buffs fully fresh until they leave the dialogue).
If you play Multiplayer it will be a lot easier to get your characters fully buffed, playing alone forces you to quickly exit all other dialogues by yourself before being able to trigger Malady´s cutscene.

The most important buffs on your characters are:

Scoundrel → make sure Medusa Head is applied as it is extremely helpful with passively petrifying all enemies without any magical armor

Ranger → Elven Stew/or any dinner with Fin+2, Peace of Mind, Rest, Bless (use the source point from your 4th party member) (will avoid "Curse" from the mysterious man) and Evading

Warrior → make sure Bull Horns and Thick of the fight are active (you will have to use Bull Rush at the start of your turn and you get +50% extra Damage through Thick of the fight), Dinner with Str+2, Peace of Mind, Rest and Evading

PS: Evading is fully optional, but it might help your Glass Cannon Characters to evade incoming hits and thus prevent status effects.

Round 1 - Scoundrel: Use Backlash on the gheist closest to the other ship → use Adrenaline to get extra 2AP (don´t worry about the -2AP penalty in the next round) → after that use Earthquake (pay attention to the fire surface - your goal is to set as much space surrounding your enemies on fire as possible) → Teleport with Cloak and Dagger or any similar self-teleport spell towards the stairs behind Malady and interact with the staircase.

This makes your Scoundrel exit the battle temporarily so that you can wait for the cool downs to run out. Then rest, buff Medusa Head again and reenter the battle through interacting with the stairs again. You could also apply buffs to yourself and/or eat something to boost your Fin etc.
Reentering the battle will grant your Scoundrel an extra turn at the end of the current round.

Note: This little glitch can be performed with any character, most preferably your scoundrel. It allows your character to leave the deck when interacting with the stairs behind Malady:
Make sure to preserve enough AP to reach the stairs and interact with them. Doing so will make your character exit the battle and reentering will grant an extra turn at the end of the current round.
Make sure to reapply the buffs you need before reentering the battle. Be careful not to switch to any other character of your party, as switching back to your character downstairs might crash your game (since all of your characters are supposed to be in battle).
Using this glitch 2-3 times with your scoundrel should make the fight very easy.
If you have Fane in your party you could even double your max turns with his Time Warp spell once or multiple times - especially if you enabled the gift bag setting for regaining your source points when resting.

Round 1 - Ranger: Use Elemental Arrowheads and select a fire surface (this will add a decent amount of extra fire damage to all of your attacks) → Use Tactical Retreat to get on top of the platform next to your for High Ground Damage Boost → Then use Ricochet on the group of enemies → Use any other huntsman attack

Round 1 - Warrior: Use Bull Rush to get closer to the group of enemies → then use 1AP to run towards the center of the enemies → use Whirlwind → optionally you could the use Skin Graft for 1AP to completely reset all of your spells you have just used

Round 1 - Remaining party members: Use AOEs to hit as many enemies as possible.

For all other rounds: Use your spells as you like, just make sure to focus on the enemies on the center first. The Empty Shell will almost always teleport on the plattform for High Ground Damage, you can just ignore her for the first two rounds. If you like, you can kill her with your ranger once you have dealt with the other enemies first, or you can just teleport her down to your other characters.
If you used Skin Graft with your warrior, you can repeat the Warrior Round 1 strategy once more.
You could also use Raise Bloated Corpse on a dead enemy once the first enemy has faded.
Do not worry about Malady. In all of my attempts not a single enemy came close enough to her to hit her. If an enemy gets past your party members, make sure to petrify him with the Medusa Head or use Petrifying Visage on him.
Optionally you can readjust the enemy´s location by teleporting him to your warrior.

Final Note:
→ If you have extra AP remaining towards the end of the siege, you can try to loot the dead bodies; preferably the NPCs killed by the meteor storm, as they will have the most valuable loot.
All corpses will disappear after the battle.