http://www.uesp.net/wiki/Daggerfall:Skakmat

Is that an NPC or what?

It's possible it was intended content for the game but didn't make it into the final, they simply left it in and instead dummied it out.

Skakmat means Checkmate in danish.. could there be a connection?

Dragons were originally intended to be a big part of Daggerfall. They never made it in, unfortunately.. except for that portrait and some other artwork I believe.