Heat oil in a large Dutch oven over medium-high heat. Add chicken thighs skin-side down and cook until browned, about 5 minutes per side. Work in batches if needed. Transfer to a plate.
Discard all but 1 tablespoon of fat from the pot. Add garlic and cook until fragrant, about 30 seconds.
Return chicken to the pot along with vinegar, soy sauce, bay leaves, peppercorns, sugar, and water. Bring to a simmer over medium-high heat.
Reduce heat to low, cover, and simmer for 20 minutes. Uncover and continue simmering until sauce thickens slightly and chicken is fully cooked, about 20 minutes more.
Discard bay leaves and serve hot over rice if desired.