LittleFinger's ability says:"does not kneel to attack", but if he is already be knelt by opponent's effect, could he still participate in challange?

doombalance said:

No. The rules say that characters that are already knelt cannot be declared as attacker or defender in a challenge. Not kneeling to attack only stops you from kneeling the character once it is declared; it does not remove the "must be standing to declare i the first place" requirement.