Preheat the oven to 375°F (190°C/Gas 5). Coat the chicken pieces in the paprika, making sure they are evenly covered, then season with salt. Heat the olive oil in a frying pan and fry the chicken until brown.
Transfer to an ovenproof dish. Add the onions to the pan and fry quickly. Add the garlic and sliced chorizo and fry for 2 minutes.
Add the tomatoes, two of the bay leaves and sherry and bring to the boil. Pour over the chicken and cover with a lid. Bake for 45 minutes. Remove the lid and season to taste. Cook for a further 20 minutes until the chicken is tender and golden. Serve with rice or boiled potatoes, garnished with bay leaves.