on *:text:.eat*:#: { 
  if (%turn == 1) { 
    if (%p1hp == 99) {
      notice $nick You already have 99 hitpoints, please choose another command.
      halt
    }
    else ($nick == %player1) { 
      set %turn 2 
      inc %p1hp 20 
      msg $chan %player1 eats a shark and gains 20 hp 
      msg $chan %player1 has %p1hp hp left 
    } 
  } 

I think you forgot to say \' elseif \' instead of else ($nick == %player1) {

on *:text:.eat*:#: { 
  if (%turn == 1) { 
    if (%p1hp == 99) {
      notice $nick You already have 99 hitpoints, please choose another command.
      halt
    }
    elseif ($nick == %player1) { 
      set %turn 2 
      inc %p1hp 20 
      msg $chan %player1 eats a shark and gains 20 hp 
      msg $chan %player1 has %p1hp hp left 
    } 
  }