The estimation of forces and responses due to the nonlinearities in ocean waves is vital in the design of offshore structures, as these forces and responses would result in the extreme loads. Simulation of such events in a laboratory is quite laborious. Even for the preparation of the driving signals for the wave boards, one needs to resort to numerical models. In order to achieve this task, the two-dimensional time domain nonlinear problem has received considerable attention in recent years, in which a mixed Eulerian and Lagrangian method (MEL) is being used. Most of the conventional methods need the free surface to be smoothed or regridded at a particular/every time step of the simulation due to Lagrangian characteristics of motion even for a short time. This would cause numerical diffusion of energy in the system after a long time. In order to minimize this effect, the present study aims at fitting the free surface using a cubic spline approximation with a finite element approach for discretizing the domain. By doing so, the requirement of smoothing/regridding becomes a minimum. The efficiency of the present simulation procedure is shown for the standing wave problem. The application of this method to the problem of sloshing and wave interaction with a submerged obstacle has been carried out. © 2006 Elsevier Ltd. All rights reserved.