PPI loan company deducting debt that is stayed in court

I’ve recently made a successful claim for a refund of PPI with Welcome Finance. They’ve said they’ll buy back a debt that was on another loan account and deduct this from the refund. The other loan account debt was made up of charges applied to my account that I believed were unnecessary and at the time was taken to court by a debt company but after submitting my defence they failed to respond and the case was stayed.

I’ve tried putting in a complaint for the charges again but told that I had to have raised it in 2011 but was not told about this by the debt company and submitted a defence in court that they didn’t respond to.

Can this amount definitely be deducted from my refund even though the case was stayed and I am now unable to submit a complaint as am now told I had to do this on the Welcome website in 2011?