Well, I was going to save this for Kain vs. Raziel, but apparently it needs to be incorporated here as well.

"Immortal" characters, or characters that can't technically die lose the match as soon as they are no longer capable of continuing. Auron is most certainly able to be knocked unconscious (as is evidenced by the fact that he can lose all of his HP in a battle) and so, in that instance he loses the battle. Simply casting a Sleep spell does not count. A combatant loses once his HP have been drained.