Muhammad al-Uraiybi, a Shia who had served as deputy presiding judge, took over as new chief judge after his predecessor Abdullah al-Amiri was sacked by the Iraqi government on Tuesday.
Al-Uraiybi ordered Saddam removed from the high-security Baghdad court on Wednesday morning when the former leader complained about his appointment.
Guards escorted Saddam out, and all defence lawyers also walked out.
Defence lawyer Wadud Fawzi, reading a statement on behalf of the defence team to the court, said: "We don't expect from this court established under the occupation authorities to be fair, so we decided to withdraw from this trial.
"The decision to sack the judge at the orders of the government shows that this trial lacks the standards of a fair trial."
"The decision to sack the judge at the orders of the government shows that this trial lacks the standards of a fair trial"
Wadud Fawzi, Saddam's lawyer
Al-Uraiybi responded, saying replacing the chief judge was an "administrative matter."
When the lawyers protested, the judge said the court would appoint a new counsel.
Saddam said he wanted his lawyers to stay and protested against a court-appointed counsel.
"This is our personal right," Saddam shouted about the defence choosing its counsel as he pointed his finger at the judge and pounded his fist on the podium.
"You must deal with us as the law dictates."
Al-Uraiybi asked him to stop talking, but Saddam refused, prompting the judge to order him out of the courtroom.
The deposed leader told the judge: "Your father was in the security and he went on working as a sergeant in the security [forces] until the fall of Baghdad (a reference to the 2003 US-led war that toppled Saddam )."
Al-Uraiybi shouted in response: "I challenge you in front of the public if this is the case."
Black from burns
The judge then resumed the session, calling in an elderly Kurdish witness to take the stand.
Saddam said he wanted his
lawyers to stay
Ismat Abd al-Qadir, 74, recalled the March 1987 attack on her northern village, Sowsinan, which she said was "completely burned down" by Iraqi jet fighters that allegedly used chemical weapons against residents.
She said: "We knew it was a chemical attack because after the warplanes bombarded the village, something smelled like rotten apples. I still have traces of the chemical weapon [attack] on my hands."
Ismat said she had had eye surgery and suffered from a chronic cough because of the effect of the chemicals.
She said: "Saddam burnt everything I had. I want to complain against Saddam and Ali al-Majid who bombarded our area with chemical weapons. I demand compensation. I lost both of my houses and all my possessions."
Another witness, shepherd Ahmad Qadir, 39, also testified that his village, Goushti, was hit with chemicals in March 1988.
Recalling that he was near the village when the chemicals struck, he said: "I saw heavy smoke coming."
On returning to the village he said he also detected a rotten apple smell.
He recalled losing 12 family members, including two sisters, their husbands and children, in the attack that he said turned their bodies and faces "black from burns."