A man was attacked by a gang and a car was hijacked at gunpoint in what police believe is a turf war involving illegal oil smugglers along the border.
The PSNI and gardai are investigating the incident, which took place on Friday night near Crossmaglen in south Armagh.
It is understood that three men, believed to be dissident republicans from the north Louth area, ambushed their victim who is said to owe money to a notorious oil and alcohol smuggler.
The man was set upon by his attackers and badly beaten, but was saved when his friends arrived at the scene.
A high-speed chase took place between the border and Crossmaglen, during which the gang's car was rammed.
Police were investigating reports last night that the gang fired a number of shots from a handgun after they abandoned their car.
They then stopped a motorist from the Republic and hijacked his car before speeding off towards Dundalk.
The gang tried to burn the vehicle which was later found abandoned by gardai near Dundalk.