Canderous' Honor Side Quest - Tatooine (Kotor 1)
Start Location: Any 'Event Location' in Docking Bays
Cut Off Point: When you travel to the Unknown World
Reward: 1800xp if you convince Jagi not to fight
In Kotor 1 almost all of your Companions get their own "Companion Quest" which involves a story line unique to them. To trigger these quests you will need to talk with your party members and listen to their stories for new Journal entries. Sometimes you can just talk to them on the Ebon Hawk or if you have them with you in the world to advance their personal plot, other times you'll need specific events.
You can trigger events with your Companions on most planets in the port of the city - the Dantooine Jedi Enclave or Korriban Dreshdae are good places to trigger events. This quest can trigger any time after you finish the Leviathan and learn the main character's true identity. Canderous will tell you all about the Mandalorian Wars and what it was like to fight Revan after which you'll have a chance of triggering this quest with Canderous in your party at any space port aside from Tatooine.
Jagi will approach you and Canderous and challenge Canderous to a duel in the Dune Sea of Tatooine. You'll find Jagi in the southwestern portion of the Dune Sea just a tad west of the large sandcrawler in the middle of the whole area. When you approach this area Jagi will come walking out with two Rodian thugs accompanying him.
Before the fight starts you will be able to engage in dialogue with both Canderous and Jagi. If you have a high [Persuade] skill then you'll even be able to talk Jagi out of fighting Canderous and end things peacefully - this route will get you the most xp overall.
To de-escalate the situation you'll want to start with "I think you both need to calm down." there will be some other dialogue where you can choose either the 1st or 2nd options. Usually the 3rd option is always a violent one so don't pick that. Eventually the dialogue will reach a conclusion where you're given two [Persuade] and one [Force Persuade] option.
Do not choose [Force Persuade] otherwise Canderous will get pissed at you and you'll fight Jagi anyway. Your only hope of changing Jagi's mind is with either one of the two [Persuade] options available for you. Either of these options can work - you just need really high [Persuade]. If you fail the persuade check you won't even see a [Failure] mention, however if you successfully persuade him you'll get a few more dialogue options and Jagi will admit that he was wrong.
Successfully convincing Jagi that he was wrong will cause him to take his own life and you'll be left to fight the two Rodians. Failing to convince Jagi will result in a fight and you'll get no xp for finishing the quest if it comes to that. You'll only receive the large xp reward if you convince Jagi and Canderous not to fight.
Convince Jagi not to fight: 1800xp