Cut chicken into 1 inch pieces. Toss with salt and pepper.
In a large skillet, heat oil. Add chicken and cook over medium-high to high heat about 5 minutes, or until chicken is opaque on all sides and very slightly golden, tossing chicken frequently. Remove chicken juices; set aside.
In same skillet, heat oil. Add onion, celery, green pepper and garlic and saute until vegetables are tender.
Stir in tomatoes and their liquid. Break up with a spoon. Stir in 1/2 cup water, paprika, salt, cayenne pepper and bay leaf.
Bring to a boil. Cover and simmer over low to medium heat for about 10 minutes. Stir in chicken and juices.
Blend together cornstarch and 1 Tbsp water. Stir into chicken mixture.
Uncover and simmer over low heat 10 to 15 minutes, or until chicken is done and tender.