Quan Chi was the secret priest from the Netherrealm. He made Scorpion immortal and then used him as his personal enforcer.
Quan Chi appeared in the 10th Mortal Kombat tournament as a watcher. He never revealed his true purpose though. He was there to make Raiden see illusions of possible things that might happen. He also wanted to make sure that the Earthrealm should win the 10th tournament and lose the grand one. So that they would be busy for centuries.
Quan Chi was in fact a servant of a fallen elder god Shinnok. But his true past and motives are mystery.
Quan Chi failed in stopping the Earthrealm defenders from winning the grand tournament. So he returned to the Netherrealm once more. But he was successful in manupilating Raiden.