The arena was specifically designed for player vs. player combat. It is situated on Giedi Prime, w,w,n of the ap. It is a very special place, being that both violent and friendly people can fight there to test their power against one another. Combat here is known as factions.
The arena being the special place that it is, you cannot die there. It was created so that players who do not wish to be PK can fight other players for fun, without suffering the “hardship” of death. Although it is not possible to die, it is possible to lose a limb.