CONTAINS SPOILERS
You can kill Arkanis Gath but only one 'version' of him I'm pretty sure.
One version pops up if you try to pick pocket people in Mae Var's guild house or Aran Linvail's lair (and you've not joined Bodhi's side).
The other version helps out when you go to attack Bodhi the second time.
The second one can be killed but doesn't have the +50 sword on him, it's a plus two short sword I think.
The first one appears behind your thief character, backstabs (and kills him sutomatically) then does the same to all your other party members. I doubt any tactic you can come up with will allow you to kill him because you'll have five dead characters in the same number of seconds. If you do find a way however I'd be intrigued to know it...
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