A capacitor in series with a transmission line is protected from overvoltage due to a large fault current by a nonlinear metal-oxide varistor (MOV) connected in parallel. Fault analysis, as well as the evaluation of performance of the transmission protection system, in the presence of MOV action becomes complex because (1) v-i characteristics of the MOV are nonlinear; (2) un- symmetrical MOV action for unsymmetrical faults will introduce coupling in sequence networks; and (3) MOV action will influence voltage or current inversion phenomenon. This paper presents a computationally efficient and simple methodology for fault analysis wherein the linear part of the network is modeled by an equivalent multiport Thevenin network. The proposed approach handles nonlinearity in fault analysis efficiently. It also provides an elegant approach to model unbalance in a network due to MOV action. The proposed approach can be used to determine relays prone to voltage or current inversion. Results on a real-life 716-bus Indian system illustrate the efficiency of the proposed approach.