I don't have the minute count for the film but the rules require:
An animated feature is defined by the academy as a film with a running time of more than 40 minutes in which characters' performances are created using a frame-by-frame technique, a significant number of the major characters are animated, and animation figures in no less than 75 percent of the running time.
It's possible that the live-action sections added up up to over 25% of the film's content, and caused it to be out of the running.
That being said, I have a difficult time believing, from my memory, that the live-action portion was 25% of the film.
Edit:
As noted by Ankit Sharma in the comments, my memory is correct. The film was 100 minutes and the live action section was only 10 minutes long, making it only 10% of the running time.
This means that this technical reason is not a possible explanation for why the film wasn't nominated.