Skyserpent General Rughadjeen must be in the Commoner's Ward/Al Zahbi (G-7) for this quest to be accessible or completable. If he is being held prisoner talking to Fari-Wari will not lead to a cutscene.
Talk to Fari-Wari at the teahouse for another cutscene.
Afterwards, you will obtain Biyaada's Letter. This will unlock the two subquests that must be completed to proceed: