[Arquendil Lorigollo]

That weapon is not some relic from bg1 or anything else interesting for that matter. Have any of you ever used the mage spell "Enchanted Weapon" or something like that?
Well, once the spell expires it leaves a broken magical weapon identical to the one sometimes found in Irenicus' dungeon.
We can only assume that the Duergar mage in that room made it for his friend and then the spell ran out, leaving the broken weapon on his dead body.