UPDATE 1-Kuwait's ABK sues Saad for $125 mln in U.S.

* More litigation against Saad Group

* Breach of contract and fraud allegations (Adds quotes from court papers in New York; Previous KUWAIT)

NEW YORK, Sept 23 (Reuters) - Al Ahli Bank of Kuwait (ABKK.KW) (ABK) sued Saudi Arabian conglomerate Saad [SAADG.UL] and its billionaire owner Maan al-Sanea for $125 million, alleging breach of contract and fraud over a credit agreement, according to court papers.

The lawsuit by Kuwait's fourth-largest listed bank by market value in New York State Supreme Court accused Saad of breaking a $60 million credit facilities' agreement in 2007.

The lawsuit filed on Sept. 15 and seen on Wednesday is the latest among several cases against Saad in the same court and courts in Britain and the Cayman Islands that seek to recover more than $10 billion in damages from the family-run business.

A spokesman for Saad declined comment. ABK officials in Kuwait declined comment.

The ABK lawsuit said that a loan to Saad Trading, Contracting & Financial Services under the contract was made with the understanding there were no circumstances that would adversely affect the bank.

"Unknown to ABK at the time, defendants -- who are at the center of a multibillion dollar financial scandal in the Middle East - concealed numerous facts and circumstances concerning their financial situation," the complaint said.

It said this included "their simultaneous borrowing of hundreds of millions, if not billions, of dollars from numerous other banks."

Saad presented four false letters of credit to purchase building materials "when in truth the money from Al Ahli Bank was being routed to defendants for unauthorized purposes having nothing to do with building materials" according to the complaint.

The complaint said the bank seeks $25 million in compensation for breach of contract and $100 million in damages for fraud.

The case is Al Ahli Bank of Kuwait v Maan Abdulwahed A. Al Sanea and Saad Trading, Contracting & Financial Services Co 602847/2009 in New York State Supreme Court (Manhattan) (Reporting by Grant McCool; additional reporting by Rania El Gamal in Kuwait, Dave Zimmerman in New York)