The site was used as a camping ground by soldiers of Cheliax during the Everwar. A surprise attack by Nidalese forces drove the soldiers into the cave, and dark magic forced them deeper and deeper until they eventually found themselves in Nar-Voth, the upper region of the Darklands. Eventually the last of their torches gave out, and the soldiers were attacked and massacred by the Shadow Cavern's caligni inhabitants.2
A few months later, Nidal fell to Cheliax, and a Chelish expedition was sent into the caves to find out the fate of the lost garrison. They found the massacre site, but could find no trace of either the missing men or their foes, and gave up the search.2
Since then, Nidal's Umbral Court made repeated efforts to contact the inhabitants of the caverns. They were eventually able to obtain a trade agreement with the caligni, and Nidal now uses the Shadow Caverns as its gateway to the Darklands.2
Trade with the Darklands
The main trade good is slaves—sold to Nidal by the pirates of the Shackles, and then traded by Nidal to the denizens of Nar-Voth. The business is overseen by Visceroth, an umbral dragon who reveres Zon-Kuthon, and his xulgath minions.2
For additional as-yet unincorporated sources about this subject, see the Meta page.