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Combine the flour and paprika in a large bowl. Season with salt and pepper. Add the chicken and gently toss to evenly coat in flour mixture.
Melt the butter in a large flameproof casserole dish over medium heat until foaming. Add the chicken and cook, turning occasionally, for 5-10 minutes or until brown all over. Use a slotted spoon to transfer chicken to a heatproof bowl.
Heat the oil in the casserole dish over medium heat. Add the onion and garlic and cook, stirring, for 5 minutes or until onion softens. Add the sugar and cook, stirring, for 1 minute or until well combined. Add the chicken, tomato, water and bay leaf, and bring to the boil. Reduce heat to low and simmer, covered, for 1 hour or until chicken is cooked through. Add the sour cream and stir to combine. Cook, covered, for a further 15 minutes or until chicken is tender. Remove from heat.
Divide chicken among serving plates and serve immediately.