Help secure my location block

Server NGINX
1

I have files that are served by the backend web app at
|/xxx/File?file=yyy.png|. These files are stored at |/storage/files| on
the server. So, I wrote a location block to serve these files from
storage directly from the web server.

Here is my first take:

|location /xxx/File {
if ($request_method = POST ) {
proxy_pass http://backend;
}

 alias /storage/files/;
 try_files $arg_file =404;

}
|

The issue is I can do something like |/xxx/File?file=…/…/etc/foo.bar|
and nginx will serve the foo.bar file for me. So, I switched to this
following:

|location /xxx/File {
if ($request_method = POST ) {
proxy_pass http://backend;
}
if ($arg_file ~ ..) { return 403; }
alias /storage/files/$arg_file;

}
|

Can someone point me to any corner cases that can be exploited and what
is the best practice for situations like these?