Yes battle was over and mercs won it for you.... You were unconscious down to the floor. So you can't tell what happen..
You go back to tavern and report to the quest giver guy:
"I kill the guy here is his head.."
"And how exactly happen? was it hard?"
"Well, i don't remember i was too tiered i haven't any coffee with me... the battle was too long and i said, since my mercs can win this i will take a nap for a while... When i wake up my mercs were waiting me with the guy's head."
"Whaaaat?
You didn't killed him? Go back and find another one just like him, i don't care what you will do (perhaps clone him for his head's DNA or resurrect your enemy) but i want
YOU to kill
THIS guy (pointing to the head you are holding)."
Well seriously now, the game doesn't count that you win the multistage if you have 0 hp. It's not a bug it's a game's mechanic, I don't know why to be so, but this rule have make me to go throw some multistage dungeons several times to finish them...
