Ocean model biases such as the North West corner cold bias connected to the location of the Gulf Stream path, the warm bias in upwelling zones, the warm bias in the Southern Ocean, and model drift like the deep ocean warm bias which tends to peak in around 800 to 1000 m depth in the Atlantic Ocean are issues common among state-of-the-art ocean models. These issues are often amplified when the ocean model is coupled to an atmosphere model to perform climate simulations. Furthermore, unrealistic freezing of the Labrador Sea is an issue in various climate models. With the unstructured mesh approach in our Finite Element Sea ice Ocean Model (FESOM) we are able to systematically investigate the benefits of local refinement of the ocean model grid both in an uncoupled set-up (sea-ice ocean only) as well as in a fully coupled climate model (atmosphere- land-sea ice-ocean). While the horizontal ocean model resolution is 25 km on average in the finer grids, we refine the grids in some key areas to up to 5 km. Therefore we can explicitly resolve ocean eddies and simulate eddy-mean flow interactions in these key areas. The atmosphere-land component of our AWI-CM (Alfred Wegener Institute Climate Model) is ECHAM6-JSBACH developed at the Max-Planck-Institute for Meteorology in Hamburg, Germany. Here we present results of century-long uncoupled and coupled simulations on ocean model grids with different local refinements while keeping the atmosphere resolution constant in the coupled simulations. Results indicate that high horizontal resolutions in key regions such as the Gulf Stream / North Atlantic Current area or the Agulhas Stream can reduce biases such as the North West corner cold bias and the deep ocean model drift.