You know, there was a time, way back when I actually did debates and stuff seriously here, where I was decently knowledgable about both Shang Tsung and Nightmare.
Now, I can't remember shit about either of them, besides Shang Tsung being a shape-shifter wizard and Nightmare being part of Soul Edge and Sigfried. lol
Shang Tsung does not have the durability to take a hit from Nightmare, who can destroy a castle by clashing blades with Siegfried. At his weakest.
He is fast enough to fight and tag characters like Ivy or Taki, who have supersonic reaction-time (Former kicked away a bullet from Cervantes at point-blank range, Taki outran an explosion with a dash). Oh, and Mitsurugi, who can block a bullet with his blade. Shang Tsung by contrast doesn't really have much going for him speed-wise. Most MK characters do not.
He also has AOE attacks, releasing his power destroyed a good amount of the surrounding area in the intro to Soul Calibur 3.
Nightmare solidly.