First time I fought him, he ran off then begged for mercy and I didn't give it.

Second time I was ghosting, so I listened to him telling the Assasins off for Corvo being the better at stealth, stole his key and everything in his pockets, then snuck off again. Regretful I didn't hang around to see if he noticed things missing.
It does irk me he probably returned to his homeland and lived happily (>:[). Didn't see anything in the ending to suggest otherwise.