Must I repay the debt to my friend, or to his friend who is demanding a sum that he refuses to pay?

It is obligatory to return a debt to its owner. It is not permissible to pay it to a creditor of the debtor unless the debtor transfers his debt to that creditor, due to the condition of the transferor's consent. You are neither his guardian nor a guarantor of his debt. However, you can advise him to fulfill people's rights, for the procrastination of a rich person is oppression, and whoever takes people's money intending to repay it, Allah will repay on his behalf.