A federal appeals court has overturned a previous ruling that awarded over $367 million to the Municipality of Anchorage in its lawsuit against the federal government for faulty construction work at the Don Young Port of Alaska.

On Monday, the U.S. Court of Appeals for the Federal Circuit reduced the damages to just $11.3 million. The city had filed the lawsuit after discovering that subcontracted work on the port was defective.

“We are continuing to consider appropriate next steps,” Mayor Suzanne LaFrance said following the ruling.

The court found that the federal Maritime Administration (MARAD) was not required to deliver a defect-free port under the 2003 memorandum of agreement, placing the responsibility on Anchorage officials instead.

The appeals court ruling means the city will likely face further delays in the case. “It means more litigation. It means that we’re not done after 10 years,” said Municipal Manager Becky Windt Pearson.

The case stems from a failed overhaul agreement with MARAD, which had poorly managed and overseen the port’s expansion. The city’s effort to modernize the port is critical to Alaska’s supply chain, with 75% of the state’s cargo passing through the Port of Alaska.

Despite the setbacks, the city is continuing its port modernization efforts, with an estimated cost of up to $2.2 billion.