I don't think he "lost", there're always story circumstances
This is how I think it went down:
Loki takes the blame, and Shanks/Gyaban lie about what occurred, because if the truth is revealed, Elbaph will declare war on the WG. To keep the WG and Elbaph from engaging in war, Loki lies about the WG/Harald, and takes all the blame himself.
Loki leaves to go after the WG. 6 year ago, Loki is about to climb the Red Line to fight the CDs. Shanks, stops Loki because:
-Shanks was friends with Harald
-Shanks knows Loki is important in the future/destiny
-Loki would have died challenging Marijoa by himself.
So, Shanks beats Loki to keep Loki from dying/getting captured in Marijoa.
Loki calls Shanks a "coward", because rather than help him fight the WG, Shanks chose the same "peace" people like Sengoku have fought to protect, by preventing Loki from attacking the CDs.
Shanks being a secret Celestial Dragon is going to startle a lot of Elbaph.