Yes. See the following lines from instructions.
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A README.txt file. You must create a single text file (plain ASCII format;
word processor formats are unacceptable) called README.txt that describes to the examiner the following information in exactly the order listed:
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Design choices document location is supposed to be listed in readme.txt. It doesnt say which format it is supposed to be. Advised to provide full documentation including UML diagrams as well cas use-case documents etc.
However, JavaDocs and other documentation can be in HTML. Infact JavaDocs will be in HTML only, for all classes, new, modified or supplied.