A Modular Multi-level Converter (MMC) is an attractive topology for HVDC Transmission applications due to its modular structure. Since MMCs are essentially Voltage Sourced Converters, their performance under ac side faults is of particular interest. The possible unbalanced over-currents and capacitor voltage fluctuations are of particular concern as they may cause the converter to trip. In this paper, we present a simulation study to evaluate the dynamic performance of a MMC based HVDC terminal for various implementations of controllers. The effect of each strategy is highlighted and the behavior of arm currents and module capacitor voltages is investigated. The results show that both negative sequence controller and arm circulating current controller are necessary to prevent large variation in arm currents, module voltages and ac line currents due to ac side unbalances.