James was sent off in first half stoppage time when his block on the line came up off his leg and onto his arm.
Initially referee Anthony Taylor did not give anything, but after consulting the pitchside monitor he swiftly pointed to the spot and gave James his marching orders.
Mohamed Salah converted the penalty to level things up for Liverpool after Kai Havertz’s opener, with the visitors then frustrating the home side in the second half to earn themselves a point.
But Azpilicueta was still a little frustrated by the decision to send James off as he explained his view in the post-match interview.
Speaking on Sky Sports, he said: “We had to fight when you are one man down for the whole of the second half. It was a challenge.
“We had the three best chances in the second half I think, even though they had all the possession.
“The action naturally he does that with the arm. The referee goes to the VAR and he only sees one image and gives the penalty and the red card. And then we get two yellow cards.
“We were just talking (to the referee). I think it’s good that we can talk to the referees. But yeah, I feel sorry for Reece because it’s very harsh.”
The draw means Chelsea and Liverpool both sit on seven points after three games as many of their players prepare to go away on international duty.
Thomas Tuchel’s side return to Premier League action against Aston Villa at Stamford Bridge on Saturday 11 September, while Jurgen Klopp’s team travel to Leeds on the same day.
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