I was fighhting an oponant in the last few seconds who had a slightly higher hp thatn me. I managed to do a pecial attack on him and whilst this went on the round finished with his hp falling lower than mine, the sound, "U WIN" was played yet he won the round.
Instead i think i should have won and the hp be worked out AFTER the last move rather than exactly when the clock runs out.

No, that's not what happens. The winner is decided by the person who has the most health when the time runs out, not by the last attack made. So the attack you made that hit AFTER Time Out didn't count, which is why you lost. It's not a bug, it's how its been in every SF game since SF2.