I suspect the pan was too hot and you used oil. Try frying the spice mix in butter (or ghee if you can get it) than add chicken, cook on a low heat and then add the yoghurt gradually.
Yep. Cook dairy on too high a heat and it will split (same goes for cream). Fry the chicken with the spices, then lower the heat (you may even want to chuck a little water in the pan to cool it) then add the other ingredients.