Go to the Lin Kuei area and talk to the guy in the red robe. Not the one by the door, but the one a few feet from him. He'll tell you to prove your loyalty to the Lin Kuei by ridding the area of the Shirai-ryu warriors. There's a small village with 3 huts close to the White Lotus tower. That's where the Shirai-ryu are. Shujinko needs the note to recognize them. Talk to the woman at the middle hut, and you should then fight Scorpion.