The claimant obtained a judgment against the defendant for breach of a guarantee. The defendant entered into an IVA with his creditors, which included his liability to the claimant. The defendant paid the judgment sum to the claimant, but not the interest awarded on it. The claimant contended that the award of interest was a post-IVA claim, and threatened to bankrupt the defendant which would lead to a termination of the IVA. The defendant applied for a stay of execution of the interest part of the judgment, on the ground that it was within the IVA.

The court found that, although the claim for interest occurred outside the IVA, the claimant had to be taken to have agreed to be bound by the IVA regime as a whole in respect of any provable debt. This included both the principal amount of its debt and interest thereon. If the IVA ran its course and was completed, the creditors, including the claimant, had to be taken to have agreed that they would have no further claim against the defendant in respect of the debts that were provable. The existence of the IVA was a special circumstance rendering it unjust for the order for interest to be enforced while the IVA subsisted (or was successfully concluded).

El Ajou v Stern