The maximum voltage that a relay can reliably switch at is determined by:
The gap (spacing) between the contacts
The dielectric of the gas inside the relay.
An arc will develop if the gap is too small between the two contacts. Arcing is common when switching high voltage, but if the relay has the proper gap, arcing is reduced.
In addition, the environment affects the degree of arcing. A humid, or highly oxygenated, environment promotes arching and a dry climate reduces arcing. Open relays allow ambient air into the switching area while sealed relays contain a controlled internal environment from the relay manufacturer. Mechanical type relays are made as open or sealed units. Reed relays, by virtue of their construction, are always sealed.
When the voltage across the relay contacts exceeds the maximum switching voltage specified for the relay, arcing is usually present. An arc due to an AC signal is usually reduced as soon as the voltage level drops to zero.