nginx keeps redirecting to welcome page

I am using the following config:

server {
listen 80;
server_name 192.168.1.10;
location /shutter {
proxy_pass http://192.168.1.10:8989;
proxy_set_header Host $host;
proxy_set_header X-Real-IP $remote_addr;
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
}
}

The application I am using is called shutter lite: http://www.den4b.com/?x=products&product=shutter

When I enter

http://192.168.1.10:8989

it takes me to 'login' screen and then the web interface of the application, so that works.

But, When I enter

http://192.168.1.10/shutter

I get to the 'login' screen for the application. As soon as I login, it takes me to the nginx welcome screen instead of the web interface of the application.

The above config works for other applications, it is only the shutter application that gives me this problem.

I am not sure where I am going wrong..

Any suggestions?