Users get 3 minutes to submit their team for a battle. Timeout means the user has not submitted the team within 3 minutes.

In case your opponent times out, you get +20 Rating Points as a bonus. More importantly, this battle does not count for Rating reset logic.
 
So in your next battle, if you:
  1. WIN - Battle Rating Points continue basis the Rating points you got for the battle prior to the timeout battle, i.e. (+)10, (+)20 or (+)40

  2. LOSE - you get (-)10 Battle Rating Points and your Rating Points get reset.