If I attack with a single character and my opponent uses LIV2 to kill it, can I then naval in another character, or is the challenge immediately concluded because I have no participants?

Please could you help show me where to find the ruling on this? It came up in a game and my opponent said that the challenge would conclude.

(3.35) No Characters in a Challenge

If, at any time after a challenge begins and attackers are declared, there are no participating characters in that challenge, the challenge ends immediately without resolution.

Note that there must be no defenders as well as no attackers for the challenge to stop. As long as there is at least 1 participating character, on whichever side, the challenge continues.

Thanks a lot pal!