I completely understand what you are saying and I understand if you are disappointed by how things turned out. I believe that you would like to have had this end up with you paying $1000 and your app being accepted into app stores without any additional effort or cost. Please correct me if I am wrong about that.
I believe I can can save you some time and confusion by pointing out some facts and some possible steps forward. But before I point out some facts about how Upwork works generally and about your situation specifically, let me emphasize that I do not work for Upwork and these are just my opinions. And even thought I might point out some things that seem like "unwelcome news", I am just trying to help you by arming you with additional information and perspective. You are the one who posted a question in the Forum. For that reason, I am on your site. I am not on the "freelancer's side."
- It is not Upwork's intention that you hire a freelancer and then pay that freelancer, and then get all of the money back. That simply is not how the site is designed to work. Also, if you don't pay a freelancer (or if you get all of your money back) then Upwork does not earn money. Because Upwork earns its money on the percentage fees that it takes out of the money you pay to freelancers.
- The freelancer does not want to give the money back to you.
- It is Upwork's intention that a client review the work that he receives, and then if any changes are necessary to complete the agreed-upon task, the client ask for those changes beore releasing payment.
- Once a client releases payment to a freelancer, it is Upwork's intention that the matter is over.
- You asked if it is possible to go to arbitration after a contract is closed? Yes. It is possible. But the first step would be mediation/dispute. After that stage, it is possible to go to arbitration. That would cost you $291, which would unrefundable.
- Most of the times when a matter goes to arbitration, the client loses. The client ends up only spending money to pay the arbitration fee, and doesn't get any money back.
- If we look at the actual written text in the milestone task in the contract, does it clearly state that the app will not have a login screen as the first screen? If that is not stated, then I see now way that you would "win" at arbitration.
- It is a violation of Upwork ToS for a client to ask a freelancer to work for free. An objective outsider might look at your situation - in which a freelancer is offering to make requested a modification to the app for $400 - and think that this is a reasonable fee. If you want the freelancer to do that work for free, it is a violation of Upwork ToS. It also seems to be unproductive. Because by NOT offering to pay the freelancer to do this work, you appear to be getting nothing done.
- It is not necessary for the original freelancer to make the modifications that you require. You could hire other people to make those modifications. Or if you have the required ability, you could make those modifications yourself.
- If you want to make modifications to the current app, who would be the most reasonable person to make those modifications? Probably the original freelancer. Because he is the person most familiar with the app. Also, he seems to be asking for very little pay to do this work. It seems doubtful that you could find somebody else to do this successfully for less money.
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What are your options moving forward?
a) You already said that you could say "the hell with hit" and be out $1000. That is a legitimate option. If you wanted to just call it quits, you CAN do that and nobody would think the less of you. You will have paid $1000 for an app that basically does what you want it to do. But it hasn't been accepted to an app store yet.
b) You could pay the freelancer $400 and then he will re-work the logic so that the login screen isn't the first screen. This will solve one of the three reasons why the app was rejected from the app store. After that, if there are additional changes that need to be made, you could continue working with this freelancer to make those changes.
c) You could try to get all of your money back. If you asked Upwork to do "mediation", they could ask the freelancer to refund your money. I don't think he will, but I have no way of knowing for sure. If mediation doesn't work, then maybe Upwork would allow you to go to arbitration. Maybe you could get money back. Maybe not. It seems doubtful. There are a lot of maybes.
I can't make any decisions for you. Hopefully this post at least provides you with more information as you try to decide what to do next.
