Heat the oil in a wok over high heat until just smoking. Add one-third of the chicken and stir-fry for 2 minutes or until browned. Use a slotted spoon to transfer the chicken to a large plate. Repeat, in 2 more batches, with the remaining chicken, reheating the wok between batches.
Add the chili and lemon grass to the wok and stir-fry for 1 minute or until aromatic.
Add the chicken, fish sauce, sugar and half the shallot to the wok and stir-fry for 1 minute or until the chicken is heated through. Divide the chicken mixture among serving plates. Scatter the peanuts and remaining shallot over the chicken. Serve with steamed rice.
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