Isn’t this statement wrong?
Protection leg: Payments by CDS seller
Payment leg: Payments by CDS buyer
So when protection > payment, the CDS buyer should pay right?
Yes, from the looks of it, it must be incorrect.
If the premium leg is greater than the protection leg, then the buyer is paying more in premium than the protection is worth, so the seller would have to make an upfront payment to make them equal.
On the other hand, if the premium leg is less than the protection leg, then the buyer is paying less in premium than the protection is worth, so the buyer would have to make an upfront payment to make it equal.