"The trial... was marred by so many procedural and substantive flaws that the verdict is unsound," the rights watchdog said in a statement released with its 97-page report on the trial.
"The proceedings in the Dujail trial were fundamentally unfair," said Nehal Bhuta, who wrote the report.
"The tribunal squandered an important opportunity to deliver credible justice to the people of Iraq. And its imposition of the death penalty after an unfair trial is indefensible," he added.
The report is based on 10 months of observation and dozens of interviews with judges, prosecutors and defence lawyers.
It says the court that tried Saddam and seven co-defendants "was undermined from the outset by Iraqi government actions that threatened the independence and perceived impartiality of the court."
"Unless the Iraqi government allows experienced international judges and lawyers to participate directly, it's unlikely the court can fairly conduct other trials," the report said.
Saddam was sentenced earlier this month after a trial lasting more than a year for his role in ordering the deaths of 148 Shia civilians from the town of Dujail, north of Baghdad, after an assassination attempt in 1982.
The verdict and sentences in the first trial are currently under appeal.
The former Iraqi president, who was sentenced to death by hanging along with two other defendants, is now on trial for genocide.
European governments have led calls for the death sentence against Saddam to be commuted while US President George W. Bush described the conviction and sentence as "a major achievement" for Iraq.

Copyright AFP (Agence France-Presse), 2006