The defence said on Monday that the case was "a mess".
Baroness Mallalieu QC said the two brothers on trial for the killing were arrested when police couldn't find out what happened to Damilola.
'Could have been an accident'
The prosecution said Damilola was deliberately stabbed with a broken bottle but the defence said the wound could have been caused by accident.
Lady Mallalieu said nothing had been found to link the boys with Damilola or where he was found.
The boys, aged 16, have denied murdering the 10-year-old.
They also deny charges of manslaughter and assault with intent to rob.
The case continues.