Marinate the chicken in the sugar and lime juice for at least 2 hours.
In a food processor or blender mix the Chilies, garlic, onion, lemon grass, galangal, and paprika until they form a smooth paste.
In a large saucepan fry the chicken in a tablespoon of oil slowly on a medium heat and pour in the sugar and lime marinade, the sugar will cause the chicken to brown quickly so be careful not to let it burn, cook the chicken on all sides to seal it. When the chicken is done put it in a large casserole dish and using the same frying pan fry the spice mix for 3 or 4 minutes with a teaspoon of oil.
Mix the desiccated coconut into 2 cups of boiling water and stir it until the water turns cloudy, add this and the coconut milk to the spices and bay leaves then bring to the boil.
Pour the liquid over the chicken and cover then bake for 1 hour. When its done remove the chicken and pour the sauce into a frying pan and boil for 5-10 minutes until it has reduced and become very thick, If its to spicy add a little milk and then pour over the chicken, Serve with rice or boiled potatoes.