Put the cashew nuts in a heatproof bowl and just cover with boiled water. Leave for 20 minutes and then blitz in a blender or wet grinder.
Heat the oil in a heavy bottomed pan or Karahi. When hot add the shallot or onion and fry gently until just turning golden.
Add the garlic and ginger and cook for 20 - 30 seconds.
Add the curry masala and cook on a low heat, stirring for 30 - 40 seconds.
Add the cashew nut paste and stir in.
Add the coconut milk and bring to a simmer.
Add the chicken, bring back to a simmer and cook for around 15 minutes.
Add the fresh chillies, peppers, salt, sugar, and coriander. Cook for a further 10 minutes or until the chicken is cooked through.
Serve with some steamed rice