Trim excess fat from chicken pieces. Heat a large sauté pan or deep, lidded skillet with enough oil to lightly coat the bottom over medium-high flame. Brown the chicken on both sides, working in batches, if needed. Transfer browned chicken to plate.
Reduce heat to medium. Add soy sauce, vinegar, coconut milk, pepper, bay leaves, garlic, sugar and dried chili to pan, stirring to combine. Return chicken to pan, skin side up. Liquid should come partway up the sides of the chicken pieces, not submerge it. Add a little water if you need more liquid—we did not.
Bring to a boil, then reduce heat to low and simmer, covered, for 50 minutes, turning the chicken a time or two.
Remove lid, raise heat to medium or medium high and cook for another 10 minutes or so, until sauce is slightly thickened. Do NOT cook it too aggressively—you could cause the coconut milk to separate.
Serve chicken over rice with plenty of sauce.