If someone is leader of a bounty hunting faction, and they get permission to arrest in a certain governments space, and that government leader is in his/her own space, can the leader arrest them?
Okay, you used "leader" a couple of time too many. I think one (or both) of these statements answers your question:
A bounty hunter (leader or not) with authorisation can arrest a government leader in that government's own space.
A government leader can arrest a bounty hunter (leader or not) in that government's own space.
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"May the Grace of Ara go with you, and His Vengeance be wrought upon your enemies."