Actually it doesn't. The rule is that the judges machines will have Java 1.5 on them and that it must be able to run on 1.5. Having 1.4+ will allow it to run on a machine with 1.5.
But it will attempt to run and then crash on a machine with only 1.4. This isn't about the rules of the contest, this is about the proper way to use JNLP. If your application requires 1.5 to run, then the JNLP file must specify 1.5 (or 1.5+).