Just like Gothic's Old Camp, this camp has an arena. Instead of fighting people, though, you fight creatures. The creatures are as follows:
You can fight them in any order. To fight one simply agree to the battle and enter the arena. The doors should now lock and another should open, releasing your chosen prey. If it doesn't come out you might have to go in after it. Anyway, once you have defeated at least one talk to the arena master for a permanent +3 strength. The more creatures you kill here the better the rewards will be.