After receiving the quest to kill Arthu, he admitted stealing some source stones from her forest and says that there is an alternative solution (making Cassandra vulnerable). If you decide to kill him, there is a dialog option "So it has come to this old friend. (Attack)" or similar.
Iirc Arthu has no other chests/ rewards for you, so you don't miss out on anything if you kill him. If you want to max your XP just kill both of them.
