It takes place in Marineford as Shanks was talking as he was about to stop this war going on in Marineford with his entire crew. You are his right hand man who is very loyal to him.

Shanks: If you want to fight more.. Then you have to fight me. He takes his saber out as you walk up to his side in front of the countless Marines and the admirals including Akainu and Sengoku. As Sengoku is considering to call off this war and help the injured.