The petition, filed by former Democrat Party MP Sathit Pitutecha and two other former MPs, alleged the resolution was illegal, unfair and discriminatory.
It alleged the compensation was made to people without checking to prove whether they had taken part in the political violence while some of those who were really affected were not paid.
Moreover, the resolution did not cover people who were affected by earlier political violence.
The Administrative Court earlier dismissed the petition. The petitioners then took their case to the Supreme Administrative Court.
The Supreme Administrative Court agreed with the lower court, which ruled that the compensation was not based on any law but on a policy to compensate people affected by the political violence from Sept 19, 2006 as recommended by the independent Truth for Reconciliation Commission.
The court said the action taken was not an admininstrative matter but a political affair outside its jurisdiction.
The Supreme Administrative Court upheld the lower court's decision.