Arben's Sword is given after completion of the main plot quest «To Lay a Ghost to Rest» in the tomb of the Broken Valley Village Chapel.

Immediately after leaving the Chapel there will be a dialog scene with Rhode where she takes the sword informing you it will be used to destroy the last Dragon Knight.

The sword is returned to you the first time you approach Maxos' Temple.

Please note: There seems to be a difference in the stats and requirements of this sword depending on whether you are playing Eco Draconis or The Dragon Knights Saga. The stats and requirements in this article are for The Dragon Knights Saga.