The duel between Merlin and Nimueh occurred after Nimueh used the power over life and death to sacrifice Hunith and Gaius.
Events
After Nimueh tricked Merlin into sacrificing his mother to save Arthur, Merlin returned to the Isle of the Blessed to trade his life for Hunith's. When he arrived, however, he found that Gaius had already traded his life to save Merlin.
Furious, Merlin confronted Nimueh and she tried to sway him to her side. He refused her offer and attacked her with a blast of magical energy, but Nimueh easily absorbed the spell. She retaliated by throwing fireballs at him and eventually struck him in the chest, sending him flying.
Assuming that he was dead, Nimueh began walking away, but Merlin recovered from the blow while her back was turned and struck her down with a bolt of lightning. In doing so, he not only killed Nimueh, but mastered the power over life and death to trade her life for Gaius' (Le Morte d'Arthur).