[@Dnafein] 1) I don't see how "Coming up with a machiavellian scheme to conquer the universe and ultimately letting his opponent live in order to feed his omnipotent arrogance" is somehow "Out of character" for Sinestro. I mean, i thought that was pretty much his main character motivation. "I want to rule the universe because everyone else has proven that they are incapable. Only i am strong enough, wise enough and have the will to bring the entire universe under a single banner" And anyone that says "Sinestro can't feel fear" clearly doesn't understand the character. Sinestro feels fear because he is the Champion of Fear. To become the champion of a colour, you have to be able to feel your emotion, allow it to flow through you, but for you to be in ultimate control of it and be able to instill it in others with the greatest of ease. That's why Hal is the Champion of Green, Attrocitus is the Champion of Red, etc. What does he fear the most? Anything he can't control. Death, for example. Arin died and he was powerless to stop it.
2) Again, because Sinestro had abandoned his Yellow ring in favour of White. The Red ring had its user, the Yellow didn't. Sinestro isn't cold and unfeeling. He cares about people. Hell, the reason that he's the villain that he is is because he loved Arin far too much that her death completely broke him. Again, he had to act caring towards Martin in order to foster that trust and, as proven with Hal, all the best lies have the truth sprinkled in there somewhere. Despite being a crazed despot, Sinestro has proven that he still does care for Halas a partner, as he cared for Arin and Abin. His only real regret is that Hal won't join him. And again, the reason he didn't kill Martin is because of Sinestro's single greatest weakness that defeats him on every single occasion.

Sinesto is the single most arrogant being in the universe. If he killed Martin as he stood there powerless then he'd have to admit that he feared him even a little. That isn't something he was willing to do.