I had something similar happen in the open. The enemy sovereign wasn't moving, and I had conquered all of his cities. I couldn't win the game until I'd killed him, so I sent my soverign to the surrounding areas in case he was simply drawn in the wrong place. I got my sovereign to fight him by sending him three tiles down and left of the enemy sovereign.
What he said.
I noticed the same thing. If you select the "phantom" sovereign, a box will mark the terrain that he's actually standing on. If you move your sovereign to that square, a fight will ensue.
