HRC fuses are used by the DNO because fuses present the cheapest method of providing PSCC protection to an installation...
From what you describe, as in the ''Blips'', This can easily be protected against by provision of Surge Protection.
I don't know of any manufacturer of MCCBs that have a setting range on a 400A breaker of 160A to 400A!! I think that your 400A is a frame size, and that the actual size of this breaker is in the region of around 280A to 300A, depending on manufacturer.
Are you saying that this breaker (MCCB) is single phase, or just that the final loads are single phase?? If it is the latter, the UPS isolation transformer along with many other components in the UPS will be 3 phase and will not like at all, a situation where it's supply is single phasing!!!
If you can give a little more information, after you have been back and assessed the situation on this installation it would be helpful, and a pic or two even more so....