The London-based firm was the only British practice shortlisted ( with the scheme pictured) to draw up plans for a new auditorium in the grounds of Grafenegg Castle, Austria.
It is the second time in less than a year that Pawson has been pipped to the post in a major European cultural competition. In February the practice was named as runner-up in the contest to design a performing-arts centre in Kristiansand, Norway (AJ 17.02.05).
On this occasion Dortmund's Schröder/Schulte-Ladbeck Generalplaner walked away with the prize of masterminding the new 1,500m 2concert hall for the Niederösterreich regional authority.
The other finalists were Austrian practice Friedrich Göbl Ziviltechniker, and Vienna-based firms Fasch & Fuchs and Ernst Maurer/Kirkegaard Associates.
Pawson had proposed a 'simple yet distinct' concrete building which was to 'complement rather than upstage' the nearby castle.
The practice had intended to sink the building into the ground and cover the exterior with copper and bronze strips.
The winning scheme is expected to open its doors to the public next summer.