Concrete blocks were tied around a man's neck and legs before his body was dumped in Newry Canal, the High Court in Belfast heard yesterday.
It was over a week before RUC divers found the body of Mr Robert McStravick (60), a native of Belfast, who had been living in Newry.
Mr Damien McShane (34) and Mr Noel McClorey (25), both from Newry but living at Park Avenue, Dundalk, who are accused of murdering Mr McStravick, applied for bail.
A prosecution lawyer said the two men gave themselves up to police in Armagh after fleeing to London.
He said they told police they had been on a drink and drugs binge when they became involved in a row with Mr McStravick in a house at Drumalane Park, Newry.
"They kicked and punched him and when they realised he was dead they decided the best thing to do was dump the body in the canal," said the lawyer.
"They tied blocks to his neck and legs and then threw the body in."
A barrister for both men said they handed themselves over to police before it was known Mr McStravick was dead.
"They panicked and went South and then to London before deciding to return and face the music," he said.
Refusing bail, Lord Justice Nicholson said it was commendable they gave themselves up, but the manner in which they disposed of the body was appalling.