Heat olive oil in a skillet over medium heat. Saute the onion until lightly browned.
Stir in garlic, curry powder, cinnamon, paprika, bay leaf, ginger, sugar, and salt. Continue cooking for 2 minutes.
Add the chicken pieces, tomato paste, yogurt and coconut milk.
Bring to a boil, reduce heat and simmer for 20-25 minutes.
If desired, you may thicken the sauce with a slurry of cornstarch and water.
Remove bay leaf, and stir in lemon juice and cayenne pepper. Simmer 5 more minutes.
Serve with rice or roti and a green salad.Notes: We've found the brand of curry makes a difference. Chief curry powder and the roti (a flat bread) can be found in Caribbean grocery stories.